You are on page 1of 18

Student Name: Jumana Saifuddin MISIS: M00429561 Module Title: International Tourism Management Module Code: TOU2001 Module Tutor: Dr John Sutton Coursework Title: Individual Essay Word Count: 3750 Words .

in light of ongoing displaying and gauging of interest conduct.’ By this definition RM is seen as a stock management device that uses market division and dispersion and value setting. The paper is the presentation of the writing audit regarding the key theories of revenue management (RM) in the hotel industry and the recent development in the research area. This evaluation will be offered from two essential points of view. Revenue management is seen as the heavenly body of apparatuses . scholarly articles from two key scientists in the range and many other.Assignment Part 1 Introduction This paper is going to evaluate Revenue Management (RM) in the hotel industry. p. In the course of recent years RM has progressed from this essential interest based evaluating way to deal with very complex computerized frameworks and methodologies. The article also underlines on the different bearings of hotel revenue management process and is organized around the components of the revenue management system. numerical projections. and it covers different parts of the use of RM in a focused circumstance and its effect on clients. Income Management The essential thinking behind income administration is about amplifying revenue in focused conditions. lodging rooms. RM has been generally grasped by hotel industry and airline companies as it applies a situational way to deal with break down in the supply and request to offer perishable stock better. 1994. Cutting edge innovation has empowered programming projects to join client information. judgment and operational examination to accomplish better deals. It has now extended to its present state as a typical business rehearse in an extensive variety of commercial enterprises. it will also discusses the advantages and disadvantages of the implementation of this system to the industry and the customers.14) 'offering the right stock unit to one side client at the opportune time at the right cost' and Optism (2002:1) characterized it as ‘a monetary procedure to figure the best evaluating arrangement for enhancing benefits produced by the offer of an item or service. Moreover.g. e. Kimes (1989) argues regarding the essentials of yield administration and portrayed the idea as (Kimes.

2012. for example. Hoogenboom. income directors can concentrate on the incomes of the hotel all in all. The operational results from the RM methodology are the particular booking components of the specific booking request – e. S. 2010. (Barth. K. & Anderson. sorts and class of rooms. span of stay. and high limit changes costs. Kimes and Sheryl (1989). the RM framework obliges data about hotel's future bookings on a daily basis. Kimes. perishable stock. gross working benefit every accessible room occupancy. spa focuses (Kimes & Singh.. advance offer of the item or administration. Kuyumcu. 2003). 2004). profit every accessible room. Kimes & Tompson. The last comprises of four auxiliary components (information and data. Ivanov and Zhechev. and so forth. Orkin. —generally honing some manifestation of value separation as expressed by Kimes. Harris and Peacock (1995) contend that the selection of yield administration in an association requires the vicinity of specific conditions. sectioned interest. 2003. thusly. 2004. This legitimizes the emerging enthusiasm for the utilization of income administration standards and instruments in related accommodation businesses and hotel income focuses – restaurants(Bertsimas & Shioda. booking status (affirmed/rejected). 2003. 1997). 2002.2011). The use of RM obliges a great deal of information in regards to distinctive RM measurements – normal day by day rate. crossing out and revision terms and conditions. request variance. Other than the rooms the hotel can have extra income focuses muddles the RM process. yield. the RM process and the RM group. capacity rooms (Kimes &McGuire. (2011). RM frameworks utilization existing reservations available (ROH) to create gauges for future landings days. revenue from every accessible room. It is enrolled by the hotel’s RM framework.and activities devoted toward the accomplishment of an ideal level of the hotel's net incomes and gross profit. 2005. and so on. Yet others. Darrow (1992) characterized RM as the utilization of data frameworks and evaluating methodologies to designate the right ability to one side client at the opportune spot at the perfect time. 2002. 2001. hotel revenue centres. capacity management and control and overbookings are the two most influential techniques and. most controversial problems discussed in RM. number of rooms. 2009). Lieberman. Expansion associate. low minor deals expenses and creation expenses. Rasekh & Li. further clarify the procedure by clarifying what happens when a client puts an online booking. as Matos . Norman &Mayer. clubhouse (Hendler & Hendler. RM programming and RM devices). 2012). value. fairways( (Licata & Tiger. C. Karaesmen & van Ryzin (2004) argue that.g. at the same time.

Preferences and inconveniences of yield administration . 2000. 2002.(2001:890) would contend that an effective appropriation of yield administration framework requires the capacity to section the business sector. RM has started to develop from strategic introduction to a more key part inside lodging associations that includes promoting. revenue mix controls. internal assessment. Cross et al (2009) give a keen outline of the development of RM in the hotel business. 2009). great information of valuing. Rising regions of RM application incorporate capacity space RM. channel analysis and selection. Emeksiz. (2006) model is the inclusion of qualitative evaluation and constant monitoring of the chosen revenue management strategy. The main advantage of the Emeksiz et al. Kimes. Noone et al. Stuart-Hill & Parker (2008) identify eight steps in the RM process – customer knowledge. Nevertheless. market segmentation and selection. demand forecasting. Kimes and McGuire. overbooking controls. and implementation of revenue management strategies. Vinod (2004: 181) takes a more pragmatic approach to identifying the steps in revenue management application and distinguishes the following steps in the RM process: market segmentation. restaurants RM. Tranter. spa RM and golf RM (Kimes et al. performance measurement and management reporting. supply and demand analysis. competitive analysis. from the stock cantered part it played in the late 1980s and 1990s. demand and supply forecasting. namely: preparation. evaluation of revenue management activities and monitoring and amendment of the revenue management strategy. instead of overseeing income from inventory alone. 2001. Kimes and Schruben. Gursoy & Icoz (2006) propose a more comprehensive hotel revenue management model that includes five stages. Sarel (2003) contend that the accomplishment of yield administration relies on upon the nature of data and the rate with which the data can be interpreted into fitting offers for particular clients. sales and channel method. and channel and inventory management. however. to the post-9/11 moved toward a more broad part inside the association. Increasing the extension and part of RM includes the administration of the whole income stream. Nonetheless. and a decent data framework. 1998. inventory pooling. a very much created overbooking approach. the accessibility of data on interest and booking examples. dynamic value-based pricing.

There have been seen quite a few advantages of yield management comprising of the elements of the decision making process concerning the ease in the distribution of homogenous components of capacity on the basis of demand availability in a manner that helps in the increase of revenue and complete usage of available capacity within the period. Furthermore. 1988. increment in clients value mindfulness and affectability. client information are utilized to yield experiences into the association's most important clients. Williams. and Patterson (2001) layout two potential manifestations of contentions that may emerge from the reception of yield administration in administration firms. furthermore. clients see that organizations act unjustifiably. 1988. This. alongside information from the association's . which manage those clients who saw the firm contrarily when honing stock and the second is evaluating controls. coupled with information on customers' shopping examples and propensities. One is client clashes. regarding the benefit and lifetime esteem. it likewise has various potential impediments. Moreover it also raises advantageous competition through capacity consumption and development of income (Larsen. Despite the fact that yield administration has a few preferences. repetitively use of price promotion can lead to a negative image of the organization and the quality of the services . and representatives' contentions which manage clashed request on workers On the as opposed to. Williams. Wirtz. and Sarel. Rossomme. Despite the fact that client created substance with respect to individual clients' necessities and inclinations is utilized to create bundles/item offerings that bolster fleeting destinations (that is. advancements. (Larsen. 1987). special treatment) focused at particular clients as a method for developing offer of wallet and building up the client base. the client particular information is gathered over the long run to give a wealthier comprehension of an association's client base. accordingly. for example. (Marmorstein. late advancement in the RM enclosure has moved far from the conventional stock driven way to deal with RM to a client driven introduction. Pheng. Under the vision of client driven RM. can then be utilized to create methodologies (for instance. A long-standing feedback of RM has been its emphasis on transient income boost. This data. it enhancing the sale process by price discrimination and improves efficiency by alluring higher demand. not willing to buy at typical costs. filling rooms amid off-top periods). 2003). 1987).

Conclusion To conclude. those clients (Noone. (2012). the best journal article for the evaluation is of Ivanov. McGuire and Niemeier (eds. S. Hotel Revenue Management – A Critical Literature Review as it has critical evaluation that is well-explained using graphs and tables and has good use of other secondary resources. and/or give particular treatment to. 2011). V. The evaluation has been done using two key journals and other articles that support the theory. and Zhechev. . Also it identifies how it has developed over the years and the effect of it on the customers.). Concentrating on the advancement of long haul associations with clients. utilizing the different information sources to tailor messages to.dependability program and/or client relationship administration (CRM) framework. this paper evaluates the revenue management in hotels industries and the functioning of it using different RM approaches. However. encourage a client driven way to deal with RM.

However.Assignment Part 2 Nowadays ‘Revenue Management’ in many industries have been seen as an important tool for meeting the supply and demand by separating the customer into various segments on the bases of their buying intentions and accordingly distributing the capacity to various segments that helps in the maximization of the company’s profit and income. When the writer reached the hotel. Roper & Jones. In order to guard themselves from loss that they could incur due the no shows. (Ivanov. The booking was then downgraded from the ‘Executive Suite MAP’ in the hotel to the ‘Standard Double bed room MAP’ for 2 days out of the 5 days in the hotel.g. the writer was told due to the late arrival of just a day the booking was not available even though it was done two months in advance and confirmed several times. This procedure at-times causes a great deal to the customers. due to some reason the flight was delayed to the destination and arrived to Darjeeling after a day. The trip was booked through an intermediate as it saves time. (El Haddad. tour operators. and they are experts in their task as Stewart. which is the holiday season for most of the countries. late annulments and alterations the hotel gives away more rooms than the actual availability of the room capacity with the belief that the overbooked rooms will help them achieve the loss they might incur. it gives value for money and is also convenient and everything is pre-planned and booked in advance. S. 2008) One of the procedure that hotel industries apply in order to achieve revenue management is through over-contracting and overbooking. agents) for more than the rooms that are actually available in the hotel and overbooking is the confirmation given to the distributors and direct customers for their bookings for more than the number of rooms and the capacity availability in the hotel. 2006. According to Noone & Lee (2011) ‘monetary-based overcompensation outcomes have . Cedar Inn. Over-contracting is done by signing a contract with the supplier (e. 2005 states that “Human expertise is an important convenience factor that is missing in online booking” as they have great knowledge about it. especially during the holiday season and mass tourism destinations. 2007). so there is not much of a hassle. in the month of July. During one of the trip to Darjeeling in India. the writer booked a tour through a tour company to Darjeeling which is located in India.

guest loyalty and rate of rooms booked. 2012. 11. value segregation implies that the hotel charges its clients distinctive costs for the same rooms. booking terms. and so forth. Shy. 2009. revenue managers may introduce more criteria’s for value separation until these criteria legitimize the use of diverse costs. depending if they guest is going to stay for short period or longer. Moreover. Cross & Noland. 2009a. conveyance channel. Nagle & Hogan.000 per night and according to the terms and conditions 50% had been paid in advance and the room that was allocated after degrading was a non-view claustrophobic room. Kotler. Ng. 2008). it could be concluded that due to arrival of their loyal customer and the principle of the first come-first serve system of the hotel industry. food board. 1999. Higbie & Cross.expressively greater gratification than the usual non-monetary compensation or voucher based compensation. however. 2006 state that no matter how well a hotel plans out for the management of overbooking. 2002. visitors' attributes. Shy. Fundamentally. Ng. time of stay. the compensation for the loss was just done with a complimentary fruit basket in the room and few chocolates. Desiraju & Shugan. price is also seen as a vital component of a hotel's advertising blend – it is the one that is straightforwardly joined with Hotel's incomes. Makens. play an equal important part as if a guest has booked a room with low rate will be transferred. In addition. Mauri. therefore. Ivanov. Bradley & Huyton. (Cross. Ivanov. Price segregation is at the heart of valuing RM instruments (Hanks. 2008. room standard. StuartHill & Parker. Moreover. state that hotels usually prefer accommodating direct guests at the cost of those that have been booked through tour operators and travel agents. Baker. 2003. gathering size. Kimes & Wirtz. It also depends on the lengthy of the stay. room view. Indeed. b. it needs to decide on who to walk in and usually the on a ‘first come-first served’ basis and transferring the late arrivals to another hotel. Room costs may fluctuate depending kind of room. The monetary . Tranter. Searchers have recognized the significance of pricing and its methodology as a premise for making sustainable competitive benefit. their devotion. 2006. Therefore. 1994. length-of-stay. 2008). time of booking. the writer offered the inferior room than the originally booked and were requested to adjust for two days. it was quite disappointing as the room that was booked initially was for Rs. 2006. Moreover. However. it can never assure when there could be arrival of more guests causing problems. 2009b. Bowen. 2013. if it is a loyal customer than transferring them out would cause a bad reputation of the hotel.

However. .g. this a reason for concerns in light of the fact that it is victimization a few clients for others on the premise of their passport type and nationality.method of reasoning for this is the distinction in price-elasticity of hotels business sector sections – e. during one of the trip. Guests from foreign countries were charged higher rates than the tourist from the local area. it was noticed that the hotels charged different prices to different customers on the basis of their nationalities. business explorers are less money sensitive contrasted with recreation voyagers and may stand to pay higher cost. Notwithstanding.

Journal of Marketing. J. Cross. M. (2002). Cross.csic. (2006). 50(1). and Shioda. Discounting in the hotel industry.. Principles of hotel front office operations. 94103. Travel Agents vs. Yield management: opportunities for private club managers. & Noland. 1st ed. & Cross. (1999). Cross.. R. [ebook] Available at: http://www. New York: Cassell. Gursoy. Simoff.. Hold My Place. (2003). Operations Research.60.4083. & Shugan. R.pdf [Accessed 23 Apr.. & Icoz. Restaurant Revenue Management. P. S. D. pp. Online Booking: Tackling the Shortcomings of Nowadays Online Tourism Higbie. J. Revenue management’s renaissance: a rebirth of the art and science of profitable revenue generation. Bogdanovych. 63(1). . F. and Peacock. Higbie. 56-81. Revenue management’s renaissance: a rebirth of the art and science of profitable revenue generation. 51(3). Y.. Emeksiz. & Cross. Harris.1. 14(3).1. 56-81. 2015].). M. D. D. 136-141. A new approach. G. Marketing Management. International Journal of Hospitality Management. S. O. (n. Barth. A yield management model for five-star hotels: Computerized and non-computerized implementation. R. R. (2009).d. H. 50(1). International Journal of Contemporary Hospitality Management. R.. C. P. & Huyton. Cornell Hospitality Quarterly. Strategic service pricing and yield management.References Baker. 44-56.. S. 536-551. R. (2009). D. Bradley. 43(4). Cornell Hospitality Quarterly. Cornell Hotel and Restaurant Administration Quarterly. A.iiia. P. Berger.472-486. 4:34-44. J. R. D. Bertsimas. Desiraju. and Sierra. Hanks. (1995). Please. 25(4).H.. (2002). (1994).

(2001).175 -197. 23(6). Decision Sciences. Kimes. ‘The GOPPAR Model’ . pp. S. Vol. & Hendler. The Netherlands. (2004). (2012). S. Hotel Revenue Management – A Critical Literature Review. G. A. 371-392. V. and Zhechev. S. 73-79. 82-95. R. (1994). Golf course revenue management. Kimes. I. An evaluation of heuristic methods for determining the best table mix in full-service restaurants. 19-32. A study of tee time intervals. Overbooking with Substitutable Inventory Classes.pdf (Accessed on 18th April 2012). Journal of Operations Management. pp. 52(1). Spa revenue management. E. Kimes. & McGuire. Revenue management in fabulous Las Vegas: Combining customer relationship management and revenue management to maximise profitability. E. W.hospitalitynet. M. S. Motus. (2004). 42(6). K. Operations Research. E.a generous container of KPIs for hospitality. (2002). Ivanov. (2012). 3(1). 599-617. pp. Perceived fairness of yield management. . The powerful tool for performance management. 60(No. L. S. S. Restaurant revenue management at Chevys: determining the best table mix. & Thompson. Cornell Hospitality Quarterly. M. (2009). (2004). (2006). & Thompson. 35(3). & Singh. Management of overbookings in the hotel industry – basic concepts and practical challenges. 50(1). The Cornell Hotel and Restaurant Administration Quarterly.83-104. Available online at: http://www. & Schruben. E. SSRN Journal. Hoogenboom. S. 33-46. G. 2). Function-space revenue management: a case study from Singapore. Kimes. Kimes. Kamperland. Karaesmen. Kimes. E. Ivanov.Hendler. S. 6. Tourism Today. F. and van Ryzin. G. Journal of Revenue and Pricing Management. Cornell Hotel and Restaurant Administration Quarterly. 35(1).14. (2005). E.

S. H. (1989). S. 8(4). 6(2). H. Cornell Hotel and Restaurant Administration Quarterly. (2003). S. Revenue management in the golf industry: Focus on throughput and consumer benefits. 348–363. A. (1989). . & Tiger. (2003). W. and Sarel. Kimes. Kimes. 62-72. W. 103-115. (2010). S.. T. for CapacityConstrained Service Firm. Rossomme. E. P. 46-48. Hotel revenue management in an economic downturn: Results of an international study. Yield management: a tool for capacity-constrained service firms. & Makens. 45(3):147-167.. E. J. Kuyumcu. (2009). E.E. W. S. Marketing for hospitality and tourism. Revenue management on the links: applying yield management to the golf-course industry. Kimes. J.E. (2002)..Kimes. (2006). 2(2). A. . 480-502. Journal of Operations Management. 19(5). 1(2). 120-127. (2011). 125135. Unleashing the Power of Yield Management in the Internet Era: Opportunities and Challenges. J. Lieberman. Yield Management and Your Passengers. The future of hotel revenue management. D. Journal of Service Research. Journal of Revenue and Pricing Management. Journal of Revenue and Pricing Management. 10(1). California Management Review. J. E. Getting the most from revenue management. Journal of Kotler.. Asia Agency Management. Journal of Revenue and Pricing Management. Yield Management: A Tool. June. E. Cornell Hospitality Report 9(12) Kimes. 4th ed. (2003). (2000). & Wirtz. Larsen. H. Has revenue management become acceptable? Findings from an international study on the perceived fairness of rate fences. 161-167. 41(1). Harlow: Prentice Hall. (1988). Gaming twist in hotel revenue management. Journal of Hospitality Marketing & Management. Kimes. and Sheryl. Bowen. Marmorstein. J. S. Licata.

Journal of Revenue and Pricing Management. (1997). 1 October 2002.L. Lee. P. T. pp. J. 517-528. & Hogan. (2003). (2011). and Niemeier (eds.tims. Ng. Noone. B. The emerging role of function space optimisation in hotel revenue management.293-305. Mauri. 52 (8): 888-895. London: Routledge. Optims. International Journal of Hospitality Management. 10(4). Yield Management – History and Definition. Journal of Operational Research Society. A demand-based model for the advance and spot pricing of services. 18(7). Norman. The pricing and revenue management of services: A strategic approach. MilanTorino: Pearson Italia. G.Matos. Rasekh.). (2009b). A. E. I. Golf course revenue management. & Mayer. S. 8 (4): 348-363. I. (2011). 105-111. E. H. M. Ng. Journal of Revenue and Pricing Management. 172-174. & Mattila. Y. 4th ed. B. Hotel revenue management and the Internet: The effect of price presentation strategies on customers’ willingness to book. McGuire. Social media meets hotel revenue management: Opportunities. K. issues and unanswered questions. D. 28-33. C. (2006).. A guide to growing more profitably. L. Journal of Product & Brand Management. 28(2). (2009). Upper Saddler River: Pearson Prentice Hall. Journal of Revenue and Pricing Management. K. de. T. 35(3). L. M. 10(2). C. 334-357. C.. H. B. Nagle. Hotel revenue management: Principles and practices. Cornell Hotel and Restaurant Administration Quarterly. The strategy and tactics of pricing. Noone. Hotel overbooking: The effect of overcompensation on customers’ reactions to denied service. (2001). . Orkin. 38(5). L. Operations Management. 272-279. Yield Management for Privatized Air Traffic Control. E. (2011). Yield management in Las Vegas casino hotels. Journal of Hospitality and Tourism Research. 2(2). J. (2012). & Li. (2009a). Noone. www.

the Sunday Times. B. Williams. The Frederick News-Post. Harlow: Pearson Prentice Hall. Travel Agencies Say they are a Better Choice than Internet. . and Patterson. (2001). Stewart. Business School.Shy. Md. 22(1). J. Aug. 22. Pheng. T. Vinod. J. J. R. A guide to pricing techniques and yield management. J. A. Leimkuhler. T. pp. Tranter.. (2008).. I. (1992). Frederick. J. (2004). Yield Management at American Airlines. 178-190. Yield Management: Resolving Potential Customers and Employees Conflicts. Stuart-Hill. B. Interfaces.8-31. J. Harlow: Pearson Prentice Hall. P. How to price. (2008). Working Paper. Cambridge University Press. Introduction to revenue management for the hospitality industry. Stuart-Hill. 3(2).. Wirtz. & Parker. Journal of Revenue and Pricing Management. K. National University of Singapore. (2005). (2008). Unlocking the value of revenue management in the hotel industry. K. A. Introduction to revenue management for the hospitality industry. Smith. Tranter. and Darrow. 94. & Parker. Dark Science Brings Boost to Airline Profits. (1987). O. 27 November..H..