Hotel Revenue Management Case Study

871 Words 4 Pages
Revenue management is selling the right product to the right price to the right people to the right place through the right channel . It helps to predict the demand of a consumer to optimize inventory and the availability of price for increasing the revenue growth . Revenue management is not mean to sell a room today at lower price to sell it tomorrow at higher rate . It means to sell a room at lower price today if it doesn’t meet higher demand Revenue management helps to gather information about the market condition . It’s a long term strategy which takes all revenue , consider with their profitability and sell low price even in high demand period .

Revenue Management first introduced in Airline Industry . The airlines name was “
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There are some key performance indicators which helps to use revenue management in hotels efficiently . These are REVPAR , TREVPAR, TREVPAC,
GOPPAR , REVPAM , REVPASH, Flow Through , REVPOR etc
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The market Segmentation also helps hotel to know about length of stay , day of weeks stays , total revenue per room , total revenue per client , booking lead time , cancellation % , No show ratio etc .

Hotel use revenue management for yieldable and non yieldable facts as well as calculating displacement . Non yieldable segments which hotel cant be rejected even if hotel could sell at a higher rate on a particular day such as Last room availability , Corporate contracts , Tour operators allotment etc . A displacement calculation should be performed regularly on main accounts to evaluate revenue gain . Revenue management helps hotel to extract top accounts ( Tour Operators , Corporate) and evaluate possible displacements day by day .

Revenue Management helps hotel to find out the demand . It also helps to take pricing decisions which is based on solid data . Demand is a yearly roadmap which helps to build revenue management strategy . It helps to find out historical demand patterns and match them with future events . Demand calendar helps to know how much revenue can get from a event

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