Revenue Management: Introduction and The case studies Revenue management is a central part of organizational management; especially in hotel management. According to the Decision Craft Incorporated (2010), “Revenue Management is a process for capacity-constrained industries to maximize profitability by allocating the right inventory to the right customers at the right price.” It paves way for planning into the future and building general strategy for running one’s hotel (Twumasi, 2009)…
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To this effect, a quick PEST analysis has been done below. PEST Analysis According to Competitive Intelligence (2011), “Political factors include parts such as employment laws, environmental regulations, tax policy, trade restrictions and tariffs and political constancy.” This means that political factors have to do with factors that are influenced by government. In this case study, tax charged on rooms, trade restrictions and travel policies would be factored in the political analysis whereby a relatively low tax system and free flow of people would enhance the patronage of hotels. Economic factors for the revenue management are exceptionally important for international trade and patronage. This is because according to Marketing Teacher Limited (2000), economic factors cover issues such as “Interest rates, the level of inflation Employment level per capita and long-term prospects for the economy Gross Domestic Product (GDP) per capita”, which are all very important in determining internal revenue management models. ...
This point is buttressed further by the Quick MBA Network that mentions issues under social factors to include “health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety.” Technological factors will eventually play a central part of the revenue management in the sense that it is going to be the single most important interactive medium by which potential customers are going to be contacted. Customers are also expected to be abreast with innovations and programs of the hotel by accessing data and information on the hotel through the use of the internet. Most commonly, it is expected that online reservations and group bookings will be made via the internet. The Net MBA (2011) mentions other forms of technological issues such as “Recent technological developments, Technology's impact on product offering, Impact on cost structure, Impact on value chain structure, Rate of technological diffusion.” Revenue Management Model In today’s competitive economic era, revenue management has been identified as an extremely important means for hotels to make up for their apportioned resources and income. Revenue xls (2007) has it that “revenue management models are intended to optimize the pricing of hotel rooms, airline seats, and other “perishable” commodities for a given duration by taking into account demand variability over time and capacity constraints.” The major model to be adopted would be the stochastic model, which was first used on the airline industry by De Boer et al. (2002) for the airline industry. A qualitative rather than a quantitative form of the model shall however be used. Under the model, the following areas will be considered. The
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This research aims to answer such questions: What is the impact of implementing quality management systems in hospitality industry? How do these systems impact the revenues? What are the efforts involved in implementing these systems and are the resources required to implement quality systems justified by the value of the revenues generated?
In essence hotels ought to set their rates according to demand factors. Pricing remains an elemental factor that influences revenue streams in the hotel industry. Studies carried out in the recent past was concerned with competitive pricing as concerned with changes in prices between hotels and their direct competition.
The paper tells that successful hotels with good customer care services and reasonable profitability are basically dependent on how well the human resource department manages its labor force. The hotel industry, being a labor-intensive industry, incurs huge labor costs that significantly affect profitability of the organization.
In this paper, the four variables considered that in relationship between revenue management and pricing strategies in airline industries includes the uncertain nature of the pricing process based on the fact that prices developed under revenue management processes use models and demand forecasts. The motives that drive the revenue management efforts do not always come with the need to make profit.
The hotel provides accommodation and other amenities to travelers and prioritizes customer satisfaction. The hotel check-in and check-out system has proven inefficient and does not provide the satisfaction required. The identity verification process has to be done manually by the hotel attendant and guests can spend several minutes when the first room is unavailable.
All too frequently, employees are seen as expenses that prevent profitability. Nothing can be further from the truth. Let us do a little thought experiment: Visualize walking through your business late in the evening after everybody has gone house. As you survey the enablers, you will realize that all you can notice are desks, telephones, computers, fittings, file cabinets and other facilities.
t exits within the specific hotel organization, including customer values and employee values so that a common concept of service can be adopted that satisfies customers and hotel ownership as well. Hotel management responsibilities include being aware of changing customer
The author states that hotels revenue management implies selling the appropriate room to the best client at the most competitive price on the right supply channel. Hotel rooms are considered as perishable products owing to their limited number. Revenue management will strive to achieve equilibrium of demand.
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