Ethics in Revenue Management

Topics: Ethics, Pricing, Business ethics Pages: 3 (973 words) Published: May 10, 2012
Ethical Aspects of Revenue Management

Revenue management is quiet new department in hotels. The main goal of this department is to divide inventory and set the right price for the right room at the right time. It is all about increasing sales and revenue, and for some people everything related to the cash flow is unethical. But what is the right price? For what target it is working? Is it ethical or no? This questions would be discussed in the following paper. But first of all lets define so what is ethics and how it is perceived by three parties: supplier/hotel, seller/intermediaries and of course consumers. It is very hard to define because all people perceive it differently and their opinion about the ethic is shaky (Velasquez, Andre, Shanks & Mayer, 2010). Ethics is the moral standard of right and wrong conduct towards others (Hayes & Miller, 2011). Revenue managers have actually a hard work to do because they have to decide the price which should be fare to everyone, and as known costumers always perceive all prices unfair as they are willing to pay less. Being ethical is clearly not a matter of following one's feeling (Velasquez, Andre, Shanks & Mayer, 2010). The main reasons why hotels should establish ethical/fair prices are: •Customer have to be sure that the price is fair now and will be the same next time; •Employees should feel that they are contributing into the property revenue gain and are useful; •At the other hand the owners of the property should be ensured that they are receiving fair money and would not effect the businesses; •And last but not least the travel wholesalers should be confident in what they sell and also know that it would not affect their business negatively; All this ethical and unethical is dealing not only with foolish clients but also with the image of the people. As the revenue manger has a bug power of setting the price and fairness depend on his own ethical barriers he or she should thin of a few main points: •...

References: • Hayes, D., & Miller, A. (2011). Electronic distribution channels. Revenue Management for the Hospitality Industry. (pp. 278-299). Canada: Willey.
• Javis. P., (2002). Introducing yield management into a new industry. Journal of Revenue and Pricing Management (pp. 67-75). Retrieved from:
• Velasquez. M., Andre. C., Shanks. T., & Mayer. M., (2010). What is Ethics? Developed from Issues in Ethics IIE V1 N1 (Fall 1987). Retrieved from:
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