Revenue management also known as yield management is allocating the right product to the right customer at the right price at the right time to maximize revenue/yield ((Kimes, 1989) and according to Hayes and Miller, (2011) a revenue manager is the individual or team that is responsible for the compatibility of the company's price to the customer's willingness to pay or a product or service. As a revenue manager of a hotel, the two main goals should be, to maximize the price of a room sold, meaning to sell a room at the best price and to minimize costs from inventory not sold. When focusing on the data of the Angliss hotel which is an 8-year-old, three to four-star hotel with 250 guest rooms of which 50 are premium and 200 are standard, with
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Ivanov (2014), says that segmentation is not an easy task it is a crucial part in revenue management and it is vital that the market segment for the hotel is identified correctly because many decisions follow this identification. Further, segmentation is based on criteria like geography, demography organizational characteristics that involve travel motives and techniques can provide with a good target market for the business (Ivanov,2014). The William Angliss hotel services leisure, tour, business, contract, small and large group segments. The location of the hotel being in the city centre and with newly renovated conferences and event spaces target the business market, having a waterfront site and facilities such as a pool and outdoor recreation attracts the leisure segment to the hotel. When looking at segment categories, one of the factors that attract the leisure tourists and the tour groups are the price of the hotel compared to business customers indicate the facilities and services as the most valued categories for the segment. Price fencing is a method of controlling the prices for different segments, Zhanga and Bell, (2012) put forward price fencing as a method of reducing the loss of revenue. The William Angliss hotel can sell rooms for a lower price in advance targeting the leisure segment because …show more content…
A few factors that can determine price is the revenue, costs (fixed and variable), customers, level of service, competition and organization's objectives and goals. Two main types of pricing are strategic pricing and dynamic pricing, dynamic pricing is associated with price and demand this has to do with looking and forecasted demand and increasing or decreasing prices to obtain the targeted demand or revenue. On the other hand, strategic pricing is the application of the data and insight to charge a price according to the buyer's perception value (Hayes & Miller 2011, p.62). According to (Cross, Higbie, and Cross, 2009), a "customer-centric" approach is more suitable as opposed to an "inventory-centric" approach to revenue management system in a hotel. Customer-centric revenue management means that during peak periods, inventory will be set aside to accommodate certain loyal customer segments (Tse & Tung Poon, 2012). The author also pointed out that in performing revenue management tools, rooms are not sold at a fixed rate and kept to house customers who will pay a much higher rate at a future
Ivanov (2014), says that segmentation is not an easy task it is a crucial part in revenue management and it is vital that the market segment for the hotel is identified correctly because many decisions follow this identification. Further, segmentation is based on criteria like geography, demography organizational characteristics that involve travel motives and techniques can provide with a good target market for the business (Ivanov,2014). The William Angliss hotel services leisure, tour, business, contract, small and large group segments. The location of the hotel being in the city centre and with newly renovated conferences and event spaces target the business market, having a waterfront site and facilities such as a pool and outdoor recreation attracts the leisure segment to the hotel. When looking at segment categories, one of the factors that attract the leisure tourists and the tour groups are the price of the hotel compared to business customers indicate the facilities and services as the most valued categories for the segment. Price fencing is a method of controlling the prices for different segments, Zhanga and Bell, (2012) put forward price fencing as a method of reducing the loss of revenue. The William Angliss hotel can sell rooms for a lower price in advance targeting the leisure segment because …show more content…
A few factors that can determine price is the revenue, costs (fixed and variable), customers, level of service, competition and organization's objectives and goals. Two main types of pricing are strategic pricing and dynamic pricing, dynamic pricing is associated with price and demand this has to do with looking and forecasted demand and increasing or decreasing prices to obtain the targeted demand or revenue. On the other hand, strategic pricing is the application of the data and insight to charge a price according to the buyer's perception value (Hayes & Miller 2011, p.62). According to (Cross, Higbie, and Cross, 2009), a "customer-centric" approach is more suitable as opposed to an "inventory-centric" approach to revenue management system in a hotel. Customer-centric revenue management means that during peak periods, inventory will be set aside to accommodate certain loyal customer segments (Tse & Tung Poon, 2012). The author also pointed out that in performing revenue management tools, rooms are not sold at a fixed rate and kept to house customers who will pay a much higher rate at a future