文档介绍：Revenue Management
Today’s lecture:
Purpose of Revenue Management
Importance of Revenue Management
Nature of Revenue Management
Measuring the need for Revenue Management
Characteristics conducive to Revenue Management
Revenue Management system requirements
Using rate categories and demand forecasts
Length of stay controls
Managing group bookings
Revenue Management implementation issues
1
The purpose of revenue management is to maximise total revenue by using demand forecasts to determine what price to charge for a class of rooms on a particular day.
1. Purpose of Revenue Management
If demand for a particular night is low, a revenue management system would indicate that prices for that night should be dropped in order to minimise unsold room inventory.
If demand for a particular night is high, a revenue management system would indicate that rooms should not be released at discounted rates to group bookings.
2
Revenue management has now become an operating procedure widely used in the hotel, event management and professional sports team sectors. A well developed revenue management system can greatly increase revenue and reduce the guesswork involved in sales management decision making.
2. Importance of Revenue Management
It has been claimed that:
“A 5% reduction in sales expenses increases profits by 3%;
a 5% increase in sales volume increases profit by 20%;
and a 5% increase in selling price increases profit by 50%”. (Cross, 1997, p. 43).
3
3. Nature of Revenue Management
A hotel GM would like to sell all room nights at the rack rate all year long. If they attempted to do this, there would be many times in the year when many rooms would not be sold and revenue would thus be lost. On the other hand, if a hotel were to sell all its rooms at low rates, the revenue that could have been earned from charging higher rates would be lost.
Revenue management seeks to find a middle area between these two extremes to minimise:
Lost revenue