Today the use of revenue management is dramatically changed for the past few decades. As revenue management shows its importance in the industry, revenue managers now have more strategic roles than just analyzing and applying opening and closing rates and forecasting them for the next weeks and months. They are now responsible for controlling revenue from other income generating assets at the hotel. They also became closely associated with marketing colleagues and interact with competitors as well as predicting the actions of competitors. Taking all these changes RM evolves much faster as the role.
What is revenue management?
“Revenue management or RM is the process or quinces of actions that allows you to sell the right product to the right customer at the right time for the right price thereby maximizing revenue from a company's products.” (Cross, 1998).
In other words RM is an essential instrument for matching supply and demand by dividing customers into different segments based on their purchase ability and allocating capacity to the different segments in a way that maximizes a particular firm’s revenues (Ivanov, 2012)
Today all the hotel chains and small privately owned hotels have their own revenue plan for a year, 5 years and, in some cases, up to 20 years. Hospitality industry is one of the fastest changing industries; as it’s always have to match the requirements of each client and industry standards. Revenue managers have to deal with new standards of costumer service and high level of competition.
History of revenue management
Revenue management is relatively young discipline. It’s history starting in early 80’s when airline industry start to use revenue management practice after government deregulation...
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Ivanov, S., & Zhechev, V. (2012). Hotel revenue management - a critical literature review.
Kaplan, A.M and Haenlein, M. (2010) Users of the world, unite! The challenges and opportunities of social media Business Horizons 53 (1) 59-63.
Mahmoud, A. Revenue Management: The Creative Strategies and Additional Sources of Revenue. Retrieved from http://hotelexecutive.com/business_review/ 3191/revenue-management-the-creative-strategies-and-additional-sources-of-revenue
McGuire, K. PhD (2012) Revenue Management Meets Social Media. Retrieved from http://hotelexecutive.com/business_review/2814/revenue-management-meets-social-media-taking-advantage-of-social-data-and-channels
Salerno, N. (2014) A Hotel Marketer’s Guide to Revenue Management. Retrieved from http://www.hotelmarketingcoach.com/
i-Rates About (2014). Retrieved March 21, 2014, from http://www.i-rates.com/about.php
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