The Effect Of Revenue Management On The Lodging Industry

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INTRODUCTION The purpose of this paper is to research the effect Revenue managers have on the lodging industry and to show how essential it is to operate any lodging company effectively. While preparing this paper, it was noted that there is quite a lot of research has been done in regards to revenue management. Revenue Management is knowing when to raise prices, capitalize on the market or meet demands. Revenue managers need to keep abreast of their customers’ needs and want and also know what is being offered by their competitors. I chose this topic because I felt that the role a revenue manager has is very vital to the growing of the lodging industry. Like any aspiring company, hotels have to be aware of the market and be flexible…show more content…
As a result of this revenue management is the perfect tool to use in order to identify customers, provide the best pricing, meet demands and distribute inventory effectively. Cross (1997:33) defines revenue manager as the application of disciplined tactics that predict consumer behavior at the micro-market level. That will maximize product availability and price in order to maximize revenues, (El Haddad, et al.). (Brotherton and Mooney, 1992; Kimes, 1989a/b), states that “hotels have also successfully adopted and implemented the RM concept, boosting their operational performance by increasing both occupancy and average room rates” . The Roles of a Revenue Manager According (Haynes and Ninemeier,2007) to a revenue manager is responsible for making decisions to maximize RevPar. In contrast to (Neil Salerno – Hotel Marketing Coach)the role of revenue management managers is to know when to sell the right rooms to the right customer at the right time for the right price. In big hotels, the revenue manager may have more than one hat to wear. The front office manager or the director of sales may take over the role of the revenue manager in the smaller hotels. The History of Revenue Management Revenue Management was first launched in the 1980’s by the airline industry. It emerged from the need to fill at least a minimum number of seats without selling every seat at discount prices. According to(Neil
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