HOTL 203 : Yield and Revenue Management : Strategic Advisory Services

Also, these businesses could outsource revenue management firm like IDeaS which will provide them with cloud-based solutions which produce powerful decisions continually which will enable the hotels to achieve revenue performance, which is at an optimal level, through automated controls which will manage their pricing (Hinterhuber 2017, p. 2). These decisions will be very helpful to the businesses as they are based on an analytical understanding that is sophisticated and also knows the behavior of a hotel’s business. By using these automated decisions, hotel’s senior management interacts directly with system inputs where they share business insights like sudden market changes (Parker 2013, p. 149). The aim is to ensure that the solution will use the best information that is available to produce automated decisions that are beneficial to their business as it will help them strategize on the best pricing policy which will translate to profitable business performance. Also, these controls will be distributed to the hotels’ booking channels which will enable them to determine the pricing method to use. The impact of these decisions will enable the hotels’ senior management position their business in the market in an efficient manner which will, over time, ensure that the market share they achieve is higher than the fair share.

When hotels use ordinary revenue system of management, they only focus on managing the rates that are publicly available. But when they outsource from IDeaS, they come to understand that these rates are only one of the revenue strategies that they should take into account. They understand that, pricing the rates that are available publicly only, without putting into consideration market segments and the rates available, will lead to poor revenue performance. Therefore, better understanding all the business impacts will lead to better pricing strategies translating to better revenue performance (Mckenna 2014, p.75). Also, senior management from these hotels can use the IDeaS approach as it employs user controls that are powerful enabling the hotels to align the yielding with their business needs so as to maximize their overall revenue which in turn improve their competitive advantage in the industry.

By using IDeaS, revenue managers are evaluating revenue contributions beyond just the normal business, they are evaluating the pricing strategies and also ancillary revenues, and also the total cost which helps the hotels focus on improving their revenue which enables them to solidify their position in the market (Mitra 2014, p.56). They also enable hotels’ management to focus more on achieving their objective in managing costs reservations effectively in order to achieve ideal profitability boosting their competitive advantage in the process. Another thing is that hotel management will get the opportunity to understand that forecasts of revenue management positively influence their profits and also raises their market share which cements their market position which translates to increase their competitive advantage (Karthik 2016, p. 78). Also, when the management uses the automated decision made by IDeaS, they gain intelligence on how to reduce costs, streamline their processes and also maximize revenues, as they are able to attract different segments, which is brought by understanding channel demographics and promotional activities interaction.

Hotel management could also use this revenue management firm which will assist them with a full deck of intuitive and analytical inputs on how to manage their rates and digital sales platforms (Cross 2014, p.36). An automated revenue strategy which is powered by analytics will indicate hotels’ demand which enables them to yield a business that drives to a longer stay length and onsite spend. This improves overall revenues which gives the management a complete handle to the hotels’ total demand. Also, due to different price sensitivities across channels, online, revenue managers should involve marketing so as to succeed in their promotional and pricing strategies (Dojan 2016, p.79). Through the provision of granular understanding to demand generation forecast, IDeaS could work with the marketing team so as to strategize on more promotional plans to reach their customers across different channels which will definitely improve the advantage in the market. Lastly, IDeaS can provide hotel management valuable data about their competitors such as offers and conditions, room rates and cancellation policies, which will give them a clear picture on the general market which gives them a clear advantage over their competitors.

References:

Cross, RG 2014,  Pricing and Revenue Management, Pricing in Competitive Hospitality Market, pp. 35-37. doi:10.1007/978-1-4615-4529-3_2

Dojan, K 2016, Marketing in revenue management, International Journal of Revenue Management and Intelligence, pp. 78-90. doi:10.21863/ifdeai/2016.4.1.056

Hinterhuber, A 2017, Implementing pricing strategies, Journal of Revenue and Pricing Management, Vol. 17, No. 1, pp. 1-2. doi:10.1057/s41272-017-0129-6

 Karthik V 2016, Hotel Revenue Management Revenue Maximization through Corporate Channel, International Journal of Business Analytics and Intelligence, Vol. 4, No. 1, pp.76-80. doi:10.21863/ijbai/2016.4.1.013

Mckenna, R 2014, Revenue management for hospitality & tourism, Journal of Revenue and Pricing Management, Vol 13, No. 1, pp. 74-76. doi:10.1057/rpm.2013.40

Mitra, I 2014, Importance of Revenue Management firms, International Journal of Business Analytics and Intelligence, Vol. 4, No. 1, pp. 54-67. doi:10.26563/ihgai/2014.4.6.013

Parker, G 2013, Optimising hotel revenue management, Journal of Revenue and Pricing Management, Vol. 2, No. 2, pp. 138-149. doi:10.1057/palgrave.rpm.5170058

Varini, K 2011, Revenue management: A practical perspective, Journal of Revenue and Pricing Management, Vol, 10, No. 3, pp. 288-289. doi:10.1057/rpm.2011.8