Read the summary and the most important questions on Revenue Management

• 1 Learning unit 1

• What is revenue management?

  Revenue management is concerned with activities that enable organizations to sell inventory for the greatest revenue possible. It is a systematic business decision, designed to maximize revenue by selling the right product at the right price, the right time and through the right channels.

• What are the main characteristics of Revenue Management?

  1. There is a fixed capacity: a maximum amount
  2. The demand varies with different situations: external events, seasonality etc.
  3. Inventory is perishable: perishable means that the good can not be stored for sale in the future

• What are the 4 main functions that revenue management performs?

  1. Developing a revenue strategy: this concerns positioning, pricing and locating.
  2. Efficient inventory management.
  3. Revenue analysis: market share, KPI's and forecasts.
  4. Business evaluation: measuring customer worth, segment worth and performing a displacement analysis (calculating the value of a group visiting compared to what transient guests would generate by contrast)

• How do you apply Revenue Management in the hospitality industry?

  Revenue management is the best way of running a successful, profitable hotel. As revenue management increases the available data and offers ways to track and analyse it, the business is provided with a wealth of new opportunities for the business to turn a profit.

• 2 Learning unit 2

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• What is a 'market'?

  A market is a set of actual and potential buyers who share a need or want, which can be satisfied through exchange relationships

• What is the Segmentating Targeting Postioning analysis?

  A model in with the following 3 steps are performed in the right order:
  1. Market segmentation: Identify the basis for segmenting the market, here you develop segment profiles.
  2. Market targeting: Develop measure of segment attractiveness, here you select the target segments.
  3. Market positioning: Develop positioning for target segments, here you develop a marketing mix for each segment.

• What are the four categories of segmentation variables?

  1. Geographic segmentation variables: provide information about the characteristics of a place.
  2. Demographic variable: personal statistics including information about gender, educational level and location. 
  3. Psychographic variables: attributes relating to personality, values, interests or lifestyles.
  4. Behaviour variables: involve end consumer's knowledge, attitude or use of product or service

• What 3 segmentations does the STR report use?

  1. Group = rooms sold in blocks of ten or more and the corresponding revenue.
  2. Transient = rooms sold at rack, corporate, package or government rates and corresponding revenue.
  3. Contract = rooms sold at rates stipulated by contracts including airline crew and permanent guests.

• 3 Learning unit 3

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• What is the revenue generating index?

    The same as REVPAR Index. 
  Hotel ADR Index x Hoter occupancy index of ARI xMPI

• To analyse or evaluate pattern changes, which 3 patterns do you use?

  1. Mean = total revenue/units sold
  2. Mode = most frequent number
  3. Median = number that's is in the middle in a range of numbers