Revenue management for hospitality and tourism
Abstract
Revenue Management for Hospitality & Tourism examines the revenue management function and explains the mechanism of commercial decision making, from the definition of segmentation grids and pricing policy, to the final decision to accept or refuse to sell a service at a given price on a given date. The revenue management function, always viewed as integrated to the marketing field, is central to hospitality and tourism companies and, from an operational point of view, reports more often than not to senior management.
This book incorporates many contributions from practitioners, academics, and revenue management experts from across the hospitality and tourism industry, including contributions that cover transport, accommodation, tour operations and car rentals. It has deliberately been written in a very engaging, accessible and student-friendly manner to facilitate learning, with a rich supply of contemporary case material included throughout. Cases have been carefully selected to provide
an up-to-date overview of what is really going on in each sector, as well as providing a strong international coverage with case studies originating from the USA, Europe and Asia.
Essential for students on tourism and hospitality courses studying marketing, pricing, distribution, selling and commercial issues in the service industry. It will also be ideal for practitioners (consulting experts, revenue managers, pricing managers) studying part-time or on CPD programmes and for those working in revenue management, reservations, operations and logistics and generic marketing.
... Researchers have detailed the key concepts related to RM competencies. Legohérel et al. (2013) summarized competencies related to RM into three themes. First, professional competencies such as knowledge of RM theories, marketing, and distribution channel are key. ...
... Second, management competencies such as knowledge about hotel technology systems, budget management, contract negotiation, and pricing for a specific segment are detailed. Finally, Legohérel et al. (2013) discussed interrelationship competencies, such as communication, presentation skills, and ability to negotiate. Cetin et al. (2016) summarized some of the similar competencies but more detailed. ...
... Interpersonal communication, communications, marketing, and strategic management are frequently mentioned in the job descriptions. Prior studies have also noted the significance of interpersonal and communication skills (Cetin et al., 2016;Forgacs, 2017;Kimes, 2017;Legohérel et al., 2013). However, they are not mentioned in the course descriptions. ...
Revenue management (RM) is vital for a hotel's success. Qualified revenue managers are required to maximize the hotels' profit. Hospitality schools' RM courses are critical for preparing students for these roles. Even though hospitality schools and associations provide RM classes, lack of qualified candidates is considered a significant challenge. Therefore, the purpose of this study is to revisit this issue and identify the gap between the competencies needed for RM professionals and the RM courses offered by universities. A descriptive analysis was conducted comparing the competencies described in job descriptions with the competencies described in the course catalog descriptions for hospitality RM courses (undergraduate level). Interpersonal communication, communications, marketing, and strategic management are frequently mentioned in the job descriptions but are not mentioned in the course descriptions. Risk management emerged as a new competency from the interviews but was not in the job descriptions or course descriptions.
... It is the process by which the best service is allocated to the best customer at the best price at the best time (Smith et al., 1992, cited in Legohérel et al., 2013. According to Legohérel et al. (2013) yield/revenue management represents a set of capacity management techniques that allow the maximization of revenue. The distinction between these two terms is not always clear; Legohérel et al. (2013) refer that the term yield implies a return on investment effort, and revenue management is linked to several areas such as marketing, information technology, finance or even sales. ...
... According to Legohérel et al. (2013) yield/revenue management represents a set of capacity management techniques that allow the maximization of revenue. The distinction between these two terms is not always clear; Legohérel et al. (2013) refer that the term yield implies a return on investment effort, and revenue management is linked to several areas such as marketing, information technology, finance or even sales. Kimes (2003) believes that yield management has evolved into revenue management, to keep up with the complexity of the business techniques. ...
... Kimes (2003) believes that yield management has evolved into revenue management, to keep up with the complexity of the business techniques. Legohérel et al. (2013) also address the most recent evolution from revenue management to total revenue management, which seeks to optimize a company's total revenue aiming the best longterm commercial development. In this scenario, not only accommodation revenue will be considered, but all other hotel revenue sources, such as spa, golf and catering. ...
In a global competition current scenario, measuring the performance of hotels is increasingly important for managers who, to take decisions, need management indicators and tools. The most common operating indicators are occupancy rate and RevPAR (Revenue Per Available Room). The goal of any hotel is to be as profitable as possible, so they must work on increasing revenues and decreasing costs. To increase revenues the focus has been on revenue management practices, and there is already several software that help hoteliers to define the most appropriate price for each customer. Therefore, managers mostly seek to increase accommodation revenue, however from a total revenue management perspective revenue from other departments must also be considered. The TRevPAR (Total Revenue Per Available Room) appears as a more comprehensive indicator that takes into account all hotels revenue sources. The purpose of this research is to study and highlight TRevPAR influence factors, since this information have practical implications in the hotel managers' decision. This methodology was carried out through the analysis of 948 hotels from 2010 to 2017. The sample was obtained by crossing two databases: SABI platform and Portuguese National Tourism Registry (RNET). The tested determining factors were the hotel's location, size, number of stars and services. An original and exhaustive study in terms of services meets the purpose, thus, the influence on TRevPAR was tested on outdoor and indoor pools, tennis, golf, spa, meeting rooms and restaurants. The findings show a global increase over the years analysed (2010-2017) in TRevPAR. The location, size and number of stars influence TRevPAR, as do most services.
... Revenue management appears at the end of seventies, early eighties with the development of airline industry in the USA and establishes a new goal for this kind of companies, where hospitality is included: the aim became to maximize revenue for a given capacity instead of only maximizing the occupancy rate (Legohérel et al., 2013). Revenue management brought new useful tools for pricing strategy (Ogbeide, 2014). ...
... In fact, Guillet and Mohammed (2015) identified seven activities involved in the revenue management process: business analysis, pricing strategy, demand modelling and forecasting, inventory and price optimization, setting booking controls, distribution channel management and performance analysis and evaluation. Legohérel et al. (2013) state that revenue management implies four steps: database analysis (history booking, actual booking, history of no-shows, capacity and prices, events calendar); forecasting (demand forecasting, cancellations and no-shows); revenue optimization (allocation model and overbooking model) and performance monitoring. This approach implies that hotel managers can, for example, close the room inventory when they reach a high number of early room reservations, to be sold later at a higher price/rate, or to sell the more expensive rooms (Abrate and Viglia, 2016). ...
... Therefore, in pricing, it is determinant to consider the set of whole variables. Then, beyond the perception of the price by consumers, all the exogenous variables must be included, and should be considered by revenue managers (RM) (Legohérel et al., 2013). ...
This study investigates the impact of several characteristics and attributes of hotels on room rates in one of the most visited cities in Europe. The research allows to compare, in a transparent way, findings of previous studies and promotes added value using for the first time the hedonic price model (HPM) in the hospitality industry in Lisbon, Portugal. Although hotel room price determinants have already been studied, in this study it was introduced physical variables and location variables all together, as well as it was added the variables relating to certain services offered. A significant impact on hotel prices by official stars and OTAs punctuation has been confirmed. In line with previous studies, an additional star and belonging to a chain allow the hotel to increase the price. In addition, other attributes, such as the distance of the hotel from the airport and the centre, have impact on hotel prices. The evidence that the existence of a spa and a pool influences hotel prices will support stakeholders in investment and management decision.
... The Revenue Manager (RMr) function appears around the 1990s and the mission of the yield (since the term revenue was not yet known) was simply to exercise the functions delegated to a current marketeer or sales manager (Legohérel, Poutier & Fyall, 2013). Nowadays RMr is a fully identified function and its positioning is already starting to be integrated in several corporate organization charts. ...
... Since the RM was implemented in the hotel industry, the organizational structure of the companies has changed, giving a prominent place to the position of the RMr who, from a simple analyst which defined hotel prices, came to have power in the final decisions (Aubke, Wöber, Scott & Baggio, 2014). Furthermore and according to the organization chart presented by Legohérel, Poutier & Fyall (2013), in general an RMr should report directly to the top manager and must be aligned with the other directors of the various departments, as Figure 1 below represents. ...
... Source: Legohérel, Poutier & Fyall (2013) The role of an RMr is not isolated and it is not just about converting day-to-day revenues, but essentially be able to inform, manage and train its entire team. RMr must be a good leadership and have persuasion skills (Ivanov, 2014). ...
The world is constantly changing, and the hotel industry is one of the sectors where we can feel it the most. Nowadays, the hotel market is dynamic, diverse, difficult, and dangerous, which creates new challenges for hotel managers, particularly in terms of revenue, creation, and optimization. In order to overcome that, revenue management emerges as a crucial price management tool to face competitiveness and business growth. This study aims to analyze the practices and advantages of revenue management, as well as understand if its implementation in Portugal influenced the revenue and growth of the hotel industry. It also intends to analyze whether there is adequate revenue training or if further training should be required. A quantitative methodology was used, and 284 answers were collected. From those answers, 115 were validated, analyzed, and discussed. Conclusions were made, and finally some limitations were presented as well as suggestion for future research.
... The implementation of RM is especially applicable to industries with the following characteristics (Ingold et al., 2012;Kimes, 1989b;Legohérel, Poutier, & Fyall, 2013;Talluri, 2012;Talluri & Van Ryzin, 2004d): Traditional RM can be considered as a special form of price discrimination (Talluri, 2012), whereby customer-segmentation strategies are used to charge "different prices for different customer segments for the consumption of the same product" (Talluri, 2012, p. 655;Bodea & Ferguson, 2014). With its aim to increase revenue per available unit of capacity it is equal to archive a perfect price discrimination. ...
... RM is currently conceptually well understood as a multi-disciplinary business process (Buckhiester, 2011) and an innovative management approach (Legohérel et al., 2013) With the recent transition of RM from capacity management to price optimization (X. L. Wang et al., 2015) modelling customer behaviour beside from standard economic models (Su & Zuo-Jun, 2007) became more relevant in operation research. ...
... Integrated RM can be described as a multi-disciplinary business process (Buckhiester, 2011), management approach (Legohérel et al., 2013) or even management philosophy (Talón-Ballestero et al., 2014). ...
This work explains the evolution of the digital hotel distribution from 1978-2018 and how software and cloud computing currently affect revenue managment. Answers from 1,056 accomodation providers in Austria show, that pricing for frequent guest, price fairness and price dumping from competitors are perceived as the biggest challenges. The current market power of OTA and the price transparency in the market SME-accomodation provider need to focus on value creation and experience design.
... В авиосектора, той се свързва с управленски техники за максимизиране на печалбата, генерирана от единица пътникокилометър. В практиката термините управление на доходността и управление на приходите се използват като синоними, без точно определена разлика между тях (Legoherel P., Poutier E. & Fyall A. 2013). ...
... "Концепцията за управление на приходите не е стратегия сама по себе си, а е съставен компонент, интегриран в маркетинговата стратегия" (Legoherel P., Poutier E. & Fyall A. 2013). ...
... Нетната печалба се получава след разходите за лихви и данък върху печалбата (Dopson L. & Hayes D. 2009). Достигането на оптимално равнище едновременно на приходите и на брутната оперативна печалба се свързва с отчитането и анализа на разходите, които "традиционният подход за управление на приходите отчасти игнорира, поради високия относителен дял на постоянните разходи и схващането за незначимостта на променливите разходи в предприятията за предоставяне на услуги" (Legoherel P., Poutier E., Fyall A., 2013). Източници на приходи в хотелиерското заведение -това са звената, в които продажбата на съответния продукт генерира приходи за хотелиерското предприятие. ...
... В авиосектора, той се свързва с управленски техники за максимизиране на печалбата, генерирана от единица пътникокилометър. В практиката термините управление на доходността и управление на приходите се използват като синоними, без точно определена разлика между тях (Legoherel P., Poutier E. & Fyall A. 2013). ...
... "Концепцията за управление на приходите не е стратегия сама по себе си, а е съставен компонент, интегриран в маркетинговата стратегия" (Legoherel P., Poutier E. & Fyall A. 2013). ...
... Нетната печалба се получава след разходите за лихви и данък върху печалбата (Dopson L. & Hayes D. 2009). Достигането на оптимално равнище едновременно на приходите и на брутната оперативна печалба се свързва с отчитането и анализа на разходите, които "традиционният подход за управление на приходите отчасти игнорира, поради високия относителен дял на постоянните разходи и схващането за незначимостта на променливите разходи в предприятията за предоставяне на услуги" (Legoherel P., Poutier E., Fyall A., 2013). Източници на приходи в хотелиерското заведение -това са звената, в които продажбата на съответния продукт генерира приходи за хотелиерското предприятие. ...
... The concept of 'dynamic pricing' lies at the heart of hotel pricing strategies, whereby prices frequently vary by channel, product, customer, and time, as a result of changes in supply and demand information and condition (such as events, demand changes, and competitor's action) (Bitran and Mondschein, 1997;Feng andGallego, 1995, 2000;Gallego and van Ryzin, 1994;Haws and Bearden, 2006;Legoherel et al., 2013;Ng, 2008;Zhao and Zheng, 2000). It represents a flexible approach where price changes are made based on the differences in customers, products, transactions, competitors' pricing, market characteristics changes, and time (Legoherel et al., 2013). ...
... The concept of 'dynamic pricing' lies at the heart of hotel pricing strategies, whereby prices frequently vary by channel, product, customer, and time, as a result of changes in supply and demand information and condition (such as events, demand changes, and competitor's action) (Bitran and Mondschein, 1997;Feng andGallego, 1995, 2000;Gallego and van Ryzin, 1994;Haws and Bearden, 2006;Legoherel et al., 2013;Ng, 2008;Zhao and Zheng, 2000). It represents a flexible approach where price changes are made based on the differences in customers, products, transactions, competitors' pricing, market characteristics changes, and time (Legoherel et al., 2013). ...
... This strategy may be perceived by some customers as 'unfair' since customers may book the same room for the same period but pay a different price (Kahneman et al., 1986a(Kahneman et al., , 1986bKimes, 1994;Lee and Illia, 2011;Mathies and Gudergan, 2007;Shoemaker, 2003;Wirtz et al., 2003). Hence, customers lose their points of reference and the variation in pricing does not allow these customers to make an accurate assessment of value for money (Legoherel et al., 2013). Customer perceptions of price and 'price fairness' is a major determinant of their purchase decision making (Chiang and Jang, 2007). ...
This study examines the causal relationship between consumers’ price fairness perceptions and behavioral intentions in the context of online hotel bookings. Using a cross-sectional sample of 506 customers of a budget hotel chain in the United Kingdom, structural equation modeling (using the partial least squares approach), multigroup t-test, and permutation tests were conducted to (1) validate the structural model where price fairness is the exogenous variable and behavioral intention is the endogenous variable and (2) examine whether the causal model is invariant (equivalent) across customers from different market segments—including, first-time and repeat customers, leisure, and business travelers. Results from the analysis supported a significant, direct relationship between customers’ perceptions of price fairness and behavioral intentions. The results of the multigroup test and permutation tests further indicated that first-time leisure customers are more sensitive to dynamic pricing practices and tend to perceive these practices as unfair. Thus, the budget hotel chain may want to be very cautious with new customers who are not familiar with this pricing practice.
... At the end, the success of a RM system will be achieved where a revenue management culture is strongly embedded. Main source of this subsection is [Legohérel et al. 2010]; few parts recall also [Vinod (2006)], while others report some extract from pretty detailed job posts 1 . A RMS can either work on automatic way or provide a basis for making a system decision based on the parameters and business rules. ...
... [ Legohérel et al. 2010] provides an example from IdTGV company, a subsidiary of SNCF that works in the passenger rail transport sector. Its RM unit has a direct reporting mandate to senior management. ...
... The role played by the price is frequently debated in economics, particularly in the field of hospitality and airline transportation management. The importance attributed to pricing decisions in this area mainly arises from the intrinsic nature of the tourism product as a perishable and non-storable service (Legohérel et al., 2013). ...
... Releasing an excessive percentage of the capacity with a high advance could have a negative effect on performance. On the contrary, releasing restrictions curb revenue dilution (Legohérel et al., 2013). ...
This paper investigates the extent to which the implementation of intertemporal price discrimination affects Airbnb listings’ revenue. We found that on average, a price surge (i.e., increasing the price as we approach the date of service consumption) has an adverse effect on revenue. However, the magnitude of such effect exhibits significant
heterogeneity among listings. Through the application of generalized random forests, a causal machine learning technique, we identify exacerbating and moderating treatment modifiers and shed light on the listing dimensions that cause price surges to be particularly detrimental for hosts’ revenue.
Available at :https://authors.elsevier.com/a/1clxJ-Jjxlj22
... Revenue management (RM) is a marketing and pricing management concept (Kimes 1989;Ng 2009;Talluri and van Ryzin 2005;Yeoman andMcMahon-Beattie 2004, 2011) used by a wide range of sectors, including the tourism and hospitality industry (Forgacs 2017;Hayes and Miller 2011;Ivanov 2014;Legoherel et al. 2013;Mauri 2012). Its arsenal includes a variety of tools such as dynamic pricing, price differentiation, overbooking, and channel management, among others intended at optimising the revenues of the service company (Ivanov 2014). ...
... From revenue management perspective, overtourism is a clear failure of revenue management strategies on both destination and corporate levels (Forgacs 2017;Ivanov 2014;Legoherel et al. 2013 Content courtesy of Springer Nature, terms of use apply. Rights reserved. ...
This research note addresses the overtourism phenomenon from a revenue management perspective. The paper claims that overtourism is an indication of a revenue management failure, on both destination and corporate levels, because the demand surpasses the capacity of the destination. Overtourism provides destinations and tourist companies with opportunities to replace extensive growth (more tourists) with intensive growth (higher prices) in order to match demand and supply. Various pricing, non-pricing and combined revenue management techniques can be used utilised for this.
... At the end, the success of a RM system will be achieved where a revenue management culture is strongly embedded. Main source of this subsection is [Legohérel et al. 2010]; few parts recall also [Vinod (2006)], while others report some extract from pretty detailed job posts 1 . A RMS can either work on automatic way or provide a basis for making a system decision based on the parameters and business rules. ...
... [ Legohérel et al. 2010] provides an example from IdTGV company, a subsidiary of SNCF that works in the passenger rail transport sector. Its RM unit has a direct reporting mandate to senior management. ...
The Yield Management System (YMS) described in this article has been developed by IBM for Trenitalia, main Italian and 3rd European railway undertaking, with 24 Million passengers and more than 260 High Speed Trains (“Frecce”) offered per day on average in 2017 first half, delivering good results in a period of raising competition. The YMS forecasts the unconstrained demand, using an additive method with an emphasis and a multiplicative correction, to account for censored data, allowing a capacity allocation optimization per Origin-Destination (O&D), and fare cluster. The system has been implemented gradually to most trains “Frecce” at Trenitalia, and since 2005 it has forecasted and optimized approximatively 4 Million model instances: nearly 120 Billion train-date-class-O&D-fare decisions.
... Background framework to the sector RM is widely defined in the literature as the application of an information system and pricing to ensure the right capacity at the right time in the right place so as to maximize revenue (Ivanov, 2014;Ivanov and Zhechev, 2012;Legohérel et al., 2013;Smith et al., 1992). In terms of the applicability of time horizons for hotel RM, short-run RM depends on three factors (Ivanov, 2014;Ivanov and Zhechev, 2012;Legohérel et al., 2013): (1) the possibility of advance bookings, (2) the ability to manage price variations across the booking horizon and (3) the possibility of segmenting demand into homogeneous groups with different price elasticities. ...
... Background framework to the sector RM is widely defined in the literature as the application of an information system and pricing to ensure the right capacity at the right time in the right place so as to maximize revenue (Ivanov, 2014;Ivanov and Zhechev, 2012;Legohérel et al., 2013;Smith et al., 1992). In terms of the applicability of time horizons for hotel RM, short-run RM depends on three factors (Ivanov, 2014;Ivanov and Zhechev, 2012;Legohérel et al., 2013): (1) the possibility of advance bookings, (2) the ability to manage price variations across the booking horizon and (3) the possibility of segmenting demand into homogeneous groups with different price elasticities. In contrast, the applicability of medium and long-run RM is dependent on factors like physical aspects, strategic factors or knowledge about demand behaviour. ...
Pricing and revenue management (RM) techniques have become a popular field of research in hotel management literature. The sector’s background framework and evolution and the widespread use of new technologies have allowed a customer-oriented approach to be taken to pricing and the development of RM tools, while also contributing to better processes in hotel management performance at individual hotel level. Thus, price optimization (PO) methods that seek to maximize hotel revenue are based on inventory scarcity, customer segmentation and pricing. In the hotel sector, as in the airline industry, different pricing policies have a greater impact than competition measurement effects. This is mainly as differentiation strategies and specific policies at hotels can reduce the pressure of a competitive environment. The main contributions of the article are the presentation, description and classification of the principal RM and PO techniques in hotel sector literature.
... Background framework to the sector RM is widely defined in the literature as the application of an information system and pricing to ensure the right capacity at the right time in the right place so as to maximize revenue (Ivanov, 2014;Ivanov and Zhechev, 2012;Legohérel et al., 2013;Smith et al., 1992). In terms of the applicability of time horizons for hotel RM, short-run RM depends on three factors (Ivanov, 2014;Ivanov and Zhechev, 2012;Legohérel et al., 2013): (1) the possibility of advance bookings, (2) the ability to manage price variations across the booking horizon and (3) the possibility of segmenting demand into homogeneous groups with different price elasticities. ...
... Background framework to the sector RM is widely defined in the literature as the application of an information system and pricing to ensure the right capacity at the right time in the right place so as to maximize revenue (Ivanov, 2014;Ivanov and Zhechev, 2012;Legohérel et al., 2013;Smith et al., 1992). In terms of the applicability of time horizons for hotel RM, short-run RM depends on three factors (Ivanov, 2014;Ivanov and Zhechev, 2012;Legohérel et al., 2013): (1) the possibility of advance bookings, (2) the ability to manage price variations across the booking horizon and (3) the possibility of segmenting demand into homogeneous groups with different price elasticities. In contrast, the applicability of medium and long-run RM is dependent on factors like physical aspects, strategic factors or knowledge about demand behaviour. ...
Pricing and revenue management (RM) techniques have become a popular field of research in hotel management literature. The sector’s background framework and evolution and the widespread use of new technologies have allowed a customer-oriented approach to be taken to pricing and the development of RM tools, while also contributing to better processes in hotel management performance at individual hotel level. Thus, price optimization (PO) methods that seek to maximize hotel revenue are based on inventory scarcity, customer segmentation and pricing. In the hotel sector, as in the airline industry, different pricing policies have a greater impact than competition measurement effects. This is mainly as differentiation strategies and specific policies at hotels can reduce the pressure of a competitive environment. The main contributions of the article are the presentation, description and classification of the principal RM and PO techniques in hotel sector literature.
... Revenue management (RM) has been widely recognised as a key technique for matching supply and demand in tourism and hospitality (Anderson and Xie, 2010;Cross, Higbie and Cross, 2009;Forgacs, 2017;Hayes and Miller, 2011;Ingold, McMahon-Beattie and Yeoman, 2001;Ivanov, 2014;Legoherel, Poutier and Fyall, 2013;Mauri, 2012;Tranter, Stuart-Hill and Parker, 2008;Wang, Heo, Schwartz, Legohérel and Specklin, 2015;Yeoman andMcMahon-Beattie, 2004, 2011) and other industries (Ng, 2009;Talluri and van Ryzin, 2005). Building on Kimes (1989) and Kimes and Wirtz (2003), hotel revenue management can be defined as the constellation of tools and actions dedicated toward the achievement of an optimal level of the hotel's net revenues and gross operating profit by offering the right product to the right customers via the right distribution channel at the right time at the right price with the right communication. ...
... hotel chains have well-developed revenue management practices that include a separate revenue manager position or even a department (see also Legoherel et al., 2013;Mauri, 2012). ...
This exploratory research paper investigates the revenue management practices of accommodation establishments in Turkey through a survey of 105 managers. The findings indicate that hoteliers put the emphasis on price discrimination and room availability guarantee and are less likely to consider overcontracting and overbooking. Most respondents do not have a revenue manager and do not intend to hire one: revenue management is usually within the responsibilities of the general manager, front office manager or the marketing manager. Online travel agencies, hotel's website, tour operators and travel agents are the most important distribution channels. The size of the property, its category, location and chain affiliation have significant impact on the degree of application of the various revenue management practices. Revenue management is mostly adopted by high category, chain affiliated, urban and seaside hotels with large number of rooms. Managerial implications, limitations and future research directions are discussed as well.
... By assuming that the market context simply exists, RM also suggests that companies have to manage it by adapting their behaviur to it. For example, because of their fixed capacity, RM requires companies to sell a number of products determined by their capacity rather than by the market-stated demand (Legoherel, Poutier, & Fyall, 2013). RM also requires the development of pricing strategies that identify and give priority to high-contributing market segments (Legoherel et al., 2013) through the implementation of a series of actions (e.g. market segmentation, customers' value, and price sensitivity analysis) that aim to understand, sense, and manage the demand and supply factors (e.g. demand elasticity, competitive forces) determining the markets' behavior (Kimes, 2010). ...
... For example, because of their fixed capacity, RM requires companies to sell a number of products determined by their capacity rather than by the market-stated demand (Legoherel, Poutier, & Fyall, 2013). RM also requires the development of pricing strategies that identify and give priority to high-contributing market segments (Legoherel et al., 2013) through the implementation of a series of actions (e.g. market segmentation, customers' value, and price sensitivity analysis) that aim to understand, sense, and manage the demand and supply factors (e.g. demand elasticity, competitive forces) determining the markets' behavior (Kimes, 2010). Similarly, RM information systems are designed to use observational data reflecting market behavior to provide statistically reliable predictions about how markets will perform and react (Sigala, Lockwood, & Jones, 2001). ...
Conventional revenue management assumes that markets exist and constrain companies. The concepts of market plasticity and “learning with the market” are reviewed in order to show how markets form and how companies can build capabilities for developing market-driving revenue management strategies. Focus groups with tourism professionals were conducted to validate the applicability of these concepts. The findings provide useful information about the professionals’ understanding (i.e. market pictures) of tourism markets, the formation of markets and the factors creating them, and the professionals’ readiness to engage with and shape tourism markets and the strategies used to achieve this. Three learning practices for managing markets are suggested, namely market-sensing, market picturing, and market scripting.
... Information technology (IT) businesses have developed solutions for services companies to implement RI processes; for instance, Amadeus Revenue Integrity Platform, Sabre Air Vision Revenue Integrity, and others offer airlines solutions to implement RI processes and improve global RM approaches. Literature also clearly refers to RI and considers that the RI concept and processes should be developed along with global RM in order to reduce cost, stem revenue leakage, and increase benefit (Legohérel, Poutier, & Fyall, 2013). Nowadays, some employment advertisements even refer to a specific RI profile and RI skills. ...
... Niffoi (as cited in Legohérel, Poutier, & Fyall, 2013) indicates that the goal of RI is to ensure the integrity of revenue, that is, the consistency of the entire commercial chain from price definition through price charging in booking systems, proper application of price conditions, and respect of yield-determined sales recommendations to final invoice clearance. In most services companies, though, failures occur both in the marketing and the sales operations. ...
This paper evaluates the main developments of revenue management (RM) over the past decade and discusses RM challenges and research prospects. It examines nine notable emerging themes: total hotel RM, big data analytics, distribution, rate integrity, RM and marketing strategies alignment, social media impacts on RM, RM system, applications of RM in non-traditional service sectors, and RM education and training. We argue that these developments have far-reaching implications for real-world RM practice and anticipate that the topic areas will continue to be popular for hospitality and tourism research in the foreseeable future.
... However, since hospitality is related to service, guest ratings and feedback are very important as they can determine the future of a hotel. This is read from a literature study according to Walker [16] which says that the hotel industry is a business that is widely used in the service industry, so it can be said that hotel services are emphasized more by consumers. This is easy to see because visitors see it. ...
Hotels have many departments, one of which is food and beverage service, in which the role of the waiter influences the hotel's image in many ways. One of them bridges between guests and waiters. In this case, we need good communication skills when serving guests, as well as dealing with guest complaints by using good and correct communication. The goals given are being able to hone communication skills when dealing with guest problems with Food and Beverages Service. This study applies a qualitative method design, collecting observations on data and literature studies. Based on this research, there are two findings of problems related to communication skills in the hotel sector. The first is how to improve the handling of guest service complaints at hotels and the second is how to overcome obstacles when serving guests during a pandemic. In this article, we explain about Food and Beverage Service. The author applies it to learning in improving communication and problem solving to broaden our understanding, so that we can learn freely and carefully in using standard procedures in hotels and personal quality values, as well as barriers caused by a lack of communication skills in solving problems with guests due to service which is less than perfect.
... This is a critical topic since partnering with third-party platforms is costly, and restaurants need to maximize the benefits they get from OMDPs. OMDPs can potentially allow restaurants to capitalize on unconstrained demand that would otherwise be limited by the physical size of the restaurant (Legohérel et al., 2013). It also helps restaurants stay in business when they must limit or close their indoor facilities during the ongoing COVID-19 pandemic. ...
Prior research into online meal delivery platforms (OMDPs) focused on studying users’ satisfaction and behavioral intentions through the lens of technology but neglected to take unique characteristics of the sharing economy into consideration. The current study aims to bridge this gap by examining the role of sharing economy ethos in customer satisfaction and the continuous usage intention of OMDPs. An online questionnaire was distributed on Qualtrics to collect data from OMDP users (n = 315). Path analysis results suggested that sharing economy ethos, food quality, and price-value perception significantly influenced OMDP users’ satisfaction and subsequently their continuous usage intention. Among the salient antecedents, the price-value perception had the strongest impact on satisfaction. On the other hand, e-service quality components, including service speed, perceived ease of use of OMDPs, and trustworthiness of OMDPs, showed non-significant associations with customer satisfaction. This research extends OMDP research to include the concept of collaborative consumption. The findings can help restaurateurs improve customer consumption experiences and to remain competitive in the market.
... Revenue management (RM) is a set of tools and actions used by managers to optimise the net revenues and the gross operating profit by offering the right product to the right customers via the right distribution channel at the right time at the right price with the right communication (Kimes, 1989). RM has been applied in various service industries (Ng, 2009;Talluri and van Ryzin, 2004;McMahon-Beattie, 2004, 2011), including tourism and hospitality (Forgacs, 2017;Hayes and Miller, 2011;Legoherel et al., 2013;Wang et al., 2015). Its application is largely driven by the assumption that it can improve the financial bottom line of companies, although RM's contribution to financial results varies and may be difficult to measure (Rannou and Melli, 2003). ...
This paper deepens the knowledge in the field of revenue management (RM) by investigating the extent to which RM practices are adopted by hotels in Italy. Specifically, using a sample of 248 Italian hotels, it aims to identify whether they actually adopt RM practices, to profile them based on the frequency/degree of usage of RM tools, and to investigate whether the organisation’s characteristics (i.e. hotel category, size, location, and chain affiliation) shape the RM practices of hotels. Findings reveal that hotels are not homogenous in their RM practices and the organisational characteristics (category, size, location, and chain affiliation) play a significant role in the RM practices of hotels in Italy. Results also highlight that a wide research-practice gap exists in the area of hotel RM. Theoretical and managerial implications, limitations and future research directions are discussed as well.
... Revenue management (RM) is one of the critical areas of interest in contemporary hotel business research, with a target to sell the right product at an affordable price, at the right time, with the right distribution channel [18][19][20]. ...
The article deals with customer behavior in the market of accommodation services. The main purpose of this article is to identify tourist behavior using their sensitivity to changes in the price, based on the data from 2011 to 2018. The results can help to understand the booking behaviors of tourists in the long term period, identify specific situations, and to improve the application of revenue management. Using simple log-log regression analysis, the daily performance data of 103 Prague hotels were analyzed, and the coefficient of price elasticity of demand was identified for various timeframes: low and high seasons, summer months, weekends and weekdays, and individual years. The results show that the coefficient of price elasticity of demand is decreasing. In the low season, the low price sensitivity is caused mainly by the high proportion of the non-yieldable leisure group segment, where fixed rates are created for tour operators more than a year in advance. In the high season, Giffen’s paradox was identified in 2016 and shows the situation of customers expecting further growth of room rates. The Giffen paradox was identified only on specific dates of the year and was confirmed by year-to-year growth of the Average Daily Rate.
... The aim of yield management is to manage unit revenues through an optimal allocation of capacity by tariff class (Capiez, 2003;Legohérel et al., 2013). ...
In a context of ever-increasing competition, revenue management pricing (RMP) has become a strategic tool for companies with limited capacity. However, despite its considerable appeal, studies show that RMP has mixed reactions from consumers. The aim of this research is to test levers of actions that can help reduce the perceived unfairness of RMP and thus promote willingness to pay (WTP). Two quantitative samples ( N 1 = 325; N 2 = 280) allowed us to validate the measurement instruments for the concepts mobilized and to test two explanatory ‘fairness-based pricing’ models. The results show that fairness and transparency have strong positive individual and interaction effects on reducing the cognitive dimensions of perceived unfairness and on reinforcing WTP. However, the effects on the affective dimensions are not confirmed in the two models tested.
... The aim of yield management is to manage unit revenues through an optimal allocation of capacity by tariff class (Capiez, 2003;Legohérel et al., 2013). ...
In a context of ever-increasing competition, revenue management pricing (RMP) has become a strategic
tool for companies with limited capacity. However, despite its considerable appeal, studies show that
RMP has mixed reactions from consumers. The aim of this research is to test levers of actions that
can help reduce the perceived unfairness of RMP and thus promote willingness to pay (WTP). Two
quantitative samples (N1=325; N2=280) allowed us to validate the measurement instruments for the
concepts mobilized and to test two explanatory ‘fairness-based pricing’ models. The results show that
fairness and transparency have strong positive individual and interaction effects on reducing the cognitive
dimensions of perceived unfairness and on reinforcing WTP. However, the effects on the affective
dimensions are not confirmed in the two models tested.
... The literature on the role and location of the position of the revenue manager in the company organization chart is not very extensive, but it provides some important elements in defining the practices and functions [8] [45]. ...
Among the new figures that have appeared in the panorama of tourism in recent decades, the revenue manager is one that most intrigues operators and scholars. It is a figure whose outlines are still poorly defined. Even their activities are still not properly chalked out. These activities, other than being often confused with mere dynamic pricing with which actually they do not coincide, take place in structures according to an extreme variety of contents and methods. Of late, the literature has examined some aspects of revenue management. These include the strategic relevance of activity, the impact in terms of performance, the operating modes and technological support in the management of variables, and so on. However, the organizational dimension of revenue management activities does not appear to be very thorough in terms of who does what and the skills associated with this role. This work is part of the research in progress at different Italian destinations to understand which hotel activities fall within “revenue management”. Linked with these activities, the research aims to find out about the knowledge, skills, and abilities required. The focus of the present paper is on Bellaria-Igea Marina in the province of Rimini. The results can be useful scholars interested in investigating these aspects. Hotels in organizing revenue management activities can also make use of these results. Further, they would come handy during the selection and evaluation of revenue managers.
... In recent years, the study of pricing techniques has become a popular field of research in hotel revenue management (RM) literature. Legohérel et al. (2013) and Ivanov and Zhechev (2012) define RM as the application of information system control and pricing that allows for revenue maximization via the allocation of the right capacity at the right time in the right place. Cross et al. (2011) point out that RM has helped many companies to increase their profits, as they are able to sell a relatively homogeneous product at different prices to different types of customers. ...
Online customer behavior in terms of price elasticity of demand and the effect of time along the booking horizon are key requirements for the price optimization process that allows hotels to maximize their revenues. In this vein, this study adapts the online transient hotel demand functions to deterministic and stochastic dynamic models—two extended optimal pricing methods existing in the literature—in order to determine the prices that maximize the revenues of two resort hotels located in Majorca. The main findings indicate that (1) seasonality, the number of rooms available, the hotel location, and the tourist profile affect dynamic pricing (DP); (2) the booking horizon limitation leads to larger revenue decreases under elastic demand; (3) higher levels in demand elasticities generally produce lower levels of prices; and (4) the distribution of elasticities across the booking horizon and the natural variability of demand have an impact on DP. Implication for industry revenue managers is that they have to consider the booking horizon duration together with the demand price sensitivity in order to maximize the hotel revenues.
... Price differences between customer groups (business or leisure, for example) also lead to price discrimination of customers (Kimes, 1989). Therefore, the customers lose their benchmarks and the price variation does not allow them to make a correct valuation of the paid money (Legoherel, Poutier and Fyall, 2013). Maxwell (2008) highlighted that when hoteliers set a room rate based on demand, they may seem to take advantage of their customers and thus not comply with social standards. ...
This study focuses on analysing the perceptions of pricing tactics the hotels from Romania use, and also on the degree of influence these perceptions have on buying intentions. Given the importance of perceived fairness, it is essential to understand the major factors that influence customers' perception of the fairness of prices set by revenue management methods. A nationwide survey was conducted to identify the perception of fairness of the price setting methods, the perception of price fairness in relation to certain factors of influence, the perceived fairness of different pricing tactics, and the evaluation of price fairness for the latest experience in a hotel and the influence on the purchasing intentions. Structural equation modelling was used to assess the influence of distributive and procedural fairness on the perceived value and the buying intentions. The resulting model essentially shows that tourists who perceive a price as fair are inclined to consider the method used to set that price as correct. The main findings regarding revenue management-type approaches emphasize that the price setting method oriented on competition is considered the fairest method for setting prices. Most survey participants believe that the most frequent situation of unfair price is found in accommodation services. Among the unfair pricing tactics are, on the one hand the difference of prices based on the nationality of the customers (higher prices for tourists from abroad) and, on the other hand, the 9-ending prices. Offering lower prices for longer periods and for larger groups represents the fairest pricing tactics that hotels can use. The manners in which Romanian customers use to rate price fairness for hotel services mainly relies on the comparison of the current price to a previous one, and on their own belief of what fair price should be. The managerial implication of this study is linked to the setting prices decisions in order to be perceived as fair prices/tariffs.
... This certificate is used as a credential to show that revenue managers understand the basics and the importance of RM and gain strategic and management skills (Cullen, 2015). Regardless of the increasing number of RM-specific certifications and courses, many companies still face difficulties when it comes to finding qualified revenue managers (Wang et al, 2015;Poutier and Fyall, 2013). ...
The success of the hospitality industry and development of RM as a profession depends on the quality of new candidates. However, formal hospitality and business education and training programs concerning pricing and RM are far from providing the maximum level of competency for an extensive RM career development. Therefore, the goal of this study is to determine the challenges of RM and to address the gaps in hospitality and tourism education. Further aims of the current research include suggesting some enhancements to RM curriculum. To answer research questions, an online survey was sent to 423 HSMAI members that are listed as revenue staff. A total of 34 RM challenges were identified. The most important RM challenges were (1) finding qualified revenue staff, (2) economic instability, (3) owner pressure on budget and prices, (4) unstable demand, and (5) competition. Formal RM education in tourism and hospitality might be improved under the light of the findings suggested in this study.
... Of course, other aspects of business model thinking are present in tourism analysis but not always identified as such. For instance, there has been sustained interest in revenue, its generation and management (Legoherel, Poutier & Fyall, 2013;Mohammed, 2015). Leask, Fyall and Garrod (2013: 261) adopt the vocabulary, if not the conceptual apparatus of business model scholarship, in their conclusion that Scottish visitor attractions have moved towards 'the strategic practice of revenue management, most clearly in the recognition of the link between pricing, value and the visitor experience'. ...
This paper examines how environmental resources and costs feature in business models of small- and medium-sized tourism enterprises (SMTEs). Several studies have pointed to the generally positive nature of the relationship between the economic and environmental performance of tourism firms. Yet, although business models act as a vector between these aspects of firm performance, they have been overlooked in sustainable tourism discourse. The paper reports findings from discussion groups of SMTE businesses in South West England during the global economic downturn. Environmental costs and cost control were afforded relatively little importance in terms of value creation; conversely, there was a strong and predictable emphasis on revenue generation. Indirect tactics emerged for dealing with guests’ environmental behaviours which reflected this prevailing commercial logic. Green credentials were routinely de-emphasized, sometimes regarded as liabilities, in a form of greenhushing. Responses were framed by reference to social media and how online reviews may negatively impact on future value capture. Conceptually, the business model emerged as an important lens for understanding how environmental resources and costs were valourized. The paper highlights the need to ensure that contemporary approaches to environmental management in SMTEs reflect the current and fast-changing conditions that frame business models.
... A continuación, encontramos otro grupo de manuales para los que no se ha podido efectuar el análisis de la amplitud y profundidad. En este conjunto se incluyen: Yeoman y McMahon-Beattie (2004) y Legohérel et al. (2013). En estos dos casos el tratamiento de CM o IM es difícil de precisar, debido a la propia estructura de los libros. ...
Revenue Management (RM) is a widespread discipline in the tourism sector which is related to booking systems typically used by customers in order to check availability or to book hotel rooms, flight seats or other services through the Internet. RM is a philosophy for business management that combines capacity, demand and price management aiming either for the maximum profitability or revenue throughout time.
Capacity Management (CM) is the section of RM in charge of handling with the capacity of the company. It includes, as fields of study, the optimization of capacity division, the allocation of capacity units for sale to the various market segments as well as dealing with cancellations, no-shows and overbooking. It also takes into consideration the necessary techniques to obtain optimal values in capacity management and inventory management.
The present research focuses on the study of the knowledge considered to be consolidated in this field. For this purpose, a study of the contents devoted to CM included in both national and international RM handbooks will be carried out. The results presented are of special utility for both researchers and professionals.
... This investigation focuses on one of these issues regarding the adequacy of the perfor- mance measures, namely, the question of mon- itoring revenues versus profits. Since its early days, the practice of optimizing performance in the airline industry, and later in the lodging industry, was centered on yield and revenues Hayes and Miller (2011), Legohérel et al (2013) (Phillips, 2005. Although most hotels' ultimate goal was always to maximize profits, for various reasons, the employed man- agement science methods of optimization were, and for the most part still are, mostly revenue- oriented. ...
... Revenue management (RM) has been widely recognised as a key technique for matching supply and demand in tourism and hospitality (Anderson and Xie, 2010;Cross et al., 2009;Hayes and Miller, 2011;Ingold, McMahon-Beattie and Yeoman, 2001;Ivanov, 2014;Kimes, 2011;Legoherel, Poutier and Fyall, 2013;Mauri, 2012;Queenan et al., 2011;Tranter, Stuart-Hill and Parker, 2008;Wang et al., 2015;Yeoman andMcMahon-Beattie, 2004, 2011) and other industries (Ng, 2009;Talluri and van Ryzin, 2005). Building on Kimes (1989) and Kimes & Wirtz (2003), hotel revenue management can be defined as the constellation of tools and actions dedicated toward the achievement of an optimal level of the hotel's net revenues and gross operating profit by offering the right product to the right customers via the right distribution channel at the right time at the right price with the right communication. ...
This exploratory research paper investigates the revenue management practices of accommodation establishments in Turkey through a survey of the managers of 105 hotels. Specifically the paper looks at the revenue centres, revenue management tools, channel management, performance metrics, revenue management team, software and forecasting methods used by hoteliers. The findings indicate that respondent hoteliers put the emphasis on price discrimination and room availability guarantee and are less likely to apply overcontracting and overbooking. Most of the respondents do not have a revenue manager and do not intend to hire one: revenue management is usually within the responsibilities of the general manager, front office manager or the marketing manager. OTAs, hotel's website, tour operators and travel agents are the most important distribution channels. The size of the property, its category, location and chain affiliation have significant impact on the degree of application of the various revenue management practice. In general, revenue management is mostly adopted by high category, chain affiliated, urban and seaside hotels with large number of rooms. Managerial implications, limitations and future research directions are discussed as well.
... This e-book is one of the few textbooks that comprehensively covers many aspects of hotel revenue management (e.g. Hayes & Miller,2011;Legoherel, Poutier & Fyall, 2013;Tranter, Stuart-Hill & Parker, 2009). It is written in a reader-friendly style, without the diminution of the subject. ...
The Room Division Revenue Manager, to do his job efficiently and effectively, must be able to identify indicators in the forecasting phase that can be compared with the data realized. The ratios associated with the figure of the Revenue Manager are, in general, operational ratios of room sales performance. However, it appears very useful, or rather indispensable, to flank these operational performance indicators with ratios analysing the income and financial situation of the Room Division department. The latter are often calculated only concerning the entire accommodation facility. On the contrary, it is indispensable that they are also determined regarding the department Room Division alone because only in the light of these indicators can one understand whether the department Room Division creates or destroys wealth and whether this business sector brings in sources of finance or, on the contrary, drains them, jeopardizing the company's entire financial situation.
This study aims to explore the current context of the nautical tourist offer, incident in the Zêzere river basin, in the Central region of Portugal, as a tourist offer and its enhancement, in a pandemic period.
Keywords: River tourism; Sustainable development: Heritage; Pandemic; Territory
The objective of the research is to analyze the seasonality of tourist demand in the hotel market, to understand how the seasonality factor affects the hotel units of a destination. It is important to compare the occupation figures of the low season with those of the high season. In this sense, the tourist destination studied is characterized with particular emphasis on the structure of demand and seasonality. The geographic space chosen for this research is a city in the Center of Portugal region.
Keywords. Seasonality; Hospitality; Tourism; Stakeholders
Revenue managers play a vital role in the hotel industry for maximizing revenues. The hotel industry also understands the importance of revenue managers. However, according to hotel revenue professionals, there is still a lack of qualified revenue managers. The purpose of this case study is to reveal the competencies of a successful hotel revenue manager. To achieve this purpose, an expert interview was done with a successful revenue manager in the Marriott Turkey cluster. It was found out that having good analytical and communication skills were essential to being a successful revenue manager. Understanding the local market and adopting brand standards were vital for effective revenue management.
Global trends that enhance healthy lifestyles, turning back to nature, preservation of the environment, using renewable energy sources, biodiversity conservation, and more are making the area of rural tourism more attractive. There is sometimes a discrepancy between the possibilities and the level of development, as it is in Serbia. Despite many fulfilled conditions, all the benefits and potential that rural tourism holds, it is not sufficiently developed in Serbia. Clustering leads to improved competitiveness of member organizations because of the increased productivity and efficiency, implementation of innovations, development of new technologies, and introduction of the latest quality standards, as well as better access to the market. Additionally, clusters contribute to the economic development of individual regions, and they are of particular importance for increasing exports and internationalizing businesses. This paper aims to show that clustering in agriculture supports and encourages member organizations to achieve the potentials for the development of rural tourism. In the linking of tourism and agriculture in clustering there emerges the agritourism cluster, which brings many benefits and possibilities that are individually much harder to realize.
The aim of this study is to provide a price optimization model for competing hotels in terms of energy-saving and environmental protection so that the government intervenes through the provision of appropriate tariffs for their performance. We consider the government as the leader and hotels as the follower in a Stackelberg model then, applied the Nash equilibrium to determine the optimal hotel prices in a competitive situation. We formulated the government’s utility function in terms of raising government revenue, tourism development, and increasing hotel revenues. By calculating the government’s utility function, the optimal level of government tariffs was determined. The results suggest that the government intervention in tourism industry includes measures that benefit tourism. In this regard, the government could increase hotel revenue and tourism expansion by reducing its profits. Also, with government intervention in the tourism sector, it can have good consequences for tourism and encourage hotels to engage in green activities to control the destructive effects of tourist expansion. A broad analysis was carried out on hotels in a touristic area in Iran, and some of the most important managerial insights are explained. This study for the first time investigates the effect of government interferences on hotel pricing while hotels compete with different features. Hence, a decentralized decision-making structure is considered for hotels. In addition, this paper presents a new model for providing optimal prices for hotels in a competitive market, optimal hotel revenue, and government optimal tariffs.
Artikel ini membahas kegiatan bertajuk Expert Sharing in Revenue Management yaitu pelatihan yang diberikan kepada mahasiswa Politeknik Pariwisata Palembang untuk meningkatkan pengetahuan dan keterampilan mereka dalam ilmu manajemen pendapatan hotel. Adapun metode yang digunakan dalam pengabdian masyarakat ini adalah ceramah, diskusi dan evaluasi. Peserta pelatihan terdiri dari 150 mahasiswa Semester 4 yang berasal dari jurusan Pengelola Konvensi dan Acara D4, Divisi Kamar D3 dan Seni Kuliner D3. Hasil dari pengabdian ini, sebanyak 94,6% mahasiswa menyatakan memahami materi yang disampaikan mengenai Revenue Management dan 80% (120 Mahasiswa) diantaranya bahkan dapat menjabarkan ulang dengan baik. Kesan mahasiswa atas kegiatan ini secara umum baik (sebanyak 90% atau 135 orang). Mereka menyatakan pelatihan ini bermanfaat bagi karir mereka di masa mendatang. Sebanyak 10% sisanya yakni 15 mahasiswa menyatakan kurang tertarik dikarenakan akan memilih bidang lain dalam manajemen perhotelan. Kata Kunci: Sumber Daya Manusia Pariwisata; Manajemen Pendapatan; Politeknik Pariwisata, Palembang
This study seeks to identify similarities and differences between vocational and academic-level bachelor programs within Indonesian hospitality and tourism education. Both the abilities and knowledge profiles of the graduates and the curriculum content are considered. These degrees were developed in 2008 following government recognition of hospitality and tourism as a field of study. Formerly these areas of study were only offered at diploma levels with a strong vocational emphasis. The findings from archival and interview assessments indicate that although subtle differences exist in the content of vocational and academic bachelor offerings, they are largely indistinguishable. A more searching underpinning of the programs using a distinctive educational philosophy is suggested to guide the aims and objectives of the different degrees. Such a structured approach could serve as a guideline for the selection of course content and teaching and learning endeavors.
The paper analyses the determinants of prices of 150 accommodation establishments in Kiev, their price dynamics and rate parity across three distribution channels. Six hedonic pricing models are developed with data for a weekend and a weekday check-in date from hotels' websites, Booking.com and Expedia.com. Location, category, Booking.com rating, chain affiliation, air-conditioning, conference rooms, number of rooms, F&B outlets and number of days before check-in have significant impacts on prices, while parking and swimming pool are not good predictors of prices. Central hotels, 5-star hotels, chain affiliated properties, those with over 100 rooms and with Booking.com rating above 8.0 have larger and positive percentage change in their prices than non-central, low category, independent, small and mid-sized properties with low customer rating. We find lack of rate parity across the distribution channels - prices on accommodation establishments' websites were lower than on the OTAs' websites. Managerial implications, limitations and directions for future research are also discussed.
The paper analyses the determinants of prices of 150 accommodation establishments in Kiev, their price dynamics and rate parity across 3 distribution channels. Eight hedonic pricing models are developed with data for a weekend and a weekday check-in date from hotels’ websites, Booking.com and Expedia.com. Location, category, Booking.com rating, chain affiliation, air-conditioning, conference rooms, number of rooms, F&B outlets and number of days before check-in have significant impacts on prices, while parking and swimming pool are not good predictors of prices. Central hotels, 5-star hotels, chain affiliated properties, those with over 100 rooms and with Booking.com rating above 8.0 have larger and positive percentage change in their prices than non-central, low category, independent, small and mid-sized properties with low customer rating. We find lack of rate parity across the distribution channels – prices on accommodation establishments’ websites were lower than on the OTAs’ websites. Managerial implications, limitations and directions for future research are also discussed.
A recent paradigm shift toward total strategic revenue management prompted calls for a re-evaluation of some of the practice’s fundamentals, including the question of what should be measured: revenues or profits? This study is the first to explore the theoretical downsides of revenue rather than profit-based optimization by providing proof of suboptimality and bidirectionality attributes. We empirically demonstrate how hotels can assess the adequacy of RevPAR, the lodging industry’s de facto standard measure, as a proxy for profitability, by measuring the correlation between the RevPAR and GOPPAR. Finally, the study evaluates the conditions that might affect RevPAR’s suitability in lieu of the profit measures. The empirical results indicate that overall RevPAR is strongly correlated with GOPPAR, but at the same time suggest that lower-scale properties with substantial non-room rents and food and beverage revenue are instances where GOPPAR than RevPAR may be a more appropriate measure.
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