Revenue Enhancement, Part 3

Abstract

The basic concept of yield management is determining which business will bring in the most revenue on a given date. This requires keeping records of past business as an indication of future business-for example, the likelihood of selling out on a given date, guests' lengths of stay, and the number of rooms a given client plans to book. Shifting some demand from busy dates to slack times can increase revenue, as can eliminating discount categories for sellout dates. Hoteliers can also manipulate groups' minimumstay requirements rather than dicker on room rate alone to maximize revenue. Selling fewer rooms to a group at a great discount at a slack time, for instance, might net greater revenue than selling more rooms at a small discount at a busy time-if the group displaces potential rack-rate business.

Pricing and Revenue Management

“…Beyond developing an optimal set of prices, a firm must decide on the number of prices (or price buckets) that should be offered (Bitran and Caldentey, 2003;Quain et al, 1999); the maximum number of price changes to make over the selling horizon (Bitran and Caldentey, 2003); the strategy for integrating markdowns, markups and promotions (Bitran and Caldentey, 2003;Bitran et al, 1998;Heching et al, 2002) and the potential impact of price on bundled products (Morwitz et al, 1998;Xia and Monroe, 2004).…”

Pricing and Revenue Management

“…Beyond developing an optimal set of prices, a firm must decide on the number of prices (or price buckets) that should be offered (Bitran and Caldentey, 2003;Quain et al, 1999); the maximum number of price changes to make over the selling horizon (Bitran and Caldentey, 2003); the strategy for integrating markdowns, markups and promotions (Bitran and Caldentey, 2003;Bitran et al, 1998;Heching et al, 2002) and the potential impact of price on bundled products (Morwitz et al, 1998;Xia and Monroe, 2004).…”