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A basic introduction to Hotel Revenue Management
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Have you ever sold any of your belongings?
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How did you feel?
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What if you had a ‘friend’ who could advise you about:
• Who is looking?
• How many people are looking?
• Where are they located?
• How badly are people looking?
• How much can they pay?
• What should be the price?
• Should you wait now and sell later?
• Should you sell now rather than waiting?
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Selling the right product, to the right customer, at the right time, at the right price.
Common Definitions
The art of turning away business…
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History of Revenue Management
Mid 1970s – Deregulation of airlines.
Early 1980s – American Airlines and Delta start early bird.
Late 1980s – Creation of Pricing levels and hurdles.
1990s – Advent of Low cost carrier business models.
1990s – Car rentals and hotels copy the Revenue Management model.
1990s – Investment in Revenue Management Systems.
Mid 1990s – Hotels start hiring Revenue Managers (US & Europe).
Late 1990s – Hotel Revenue Management concept adopted by Asian Hotels.
2000s – Hotel chains start investing in customized RM tools.
Current decade – Function Space, spa, restaurants.
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Revenue Management is not Finance!
It is about -Taking decisions which shape the business
mix of a hotel with the intention of maximizing revenue.
It is about getting the best business mix.
Revenue Management is not Reservations!
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Crew/Long Stay
DiscountWholesalers
Groups
Negotiated Corporate
TransientRate
Rooms
Business Mix
Rs. 4,000
Rs. 4,500
Rs. 5,000
Rs. 6,000
Rs. 7,000
Rs. 10,000
20%25%35%10% 5% 5%
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Who uses Revenue Management?
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Studies have shown that a hotel with a Revenue Manager can make 4% more revenue than a hotel without one.
Total Room Revenue = 40,00,00,000 4% = 1,60,00,000
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Does it now make sense to hire a Revenue Manager?
Thank You
For Revenue Manager on Hire, Call +91 9830282228
