A Meta-analysis on Revenue Management
BBA 7 – G1 Yvonne LIU 302492 Timothy MA 222747
Revenue and Pricing Management
Statement of authorship
I certify that this assignment is my own work and contains no material which has been submitted as part of an assignment in any institute college or university. Moreover, to the best of my knowledge and belief, it contains no material previously published or written by another person, except where due reference is made in the text of the assignment.
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1. Introduction……………………………………………………………………4 2. Analysis the future developments of RM………………………………...5 3. Conclusion……………………………………………………………………14 References list
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The hotel industry has become very competitive and there is need to attract and retain customers on a regular basis. The hotel industry is fragmented and the dynamics in demand changes for hotel services have led to variations in the prices charged to the customers seeking such services. Initially, the hotel industry practitioners were more focused on accumulating more revenue to reap profitability on a short-term. This did not integrate the position of the customers in the revenue management process. However, increased research in the area of revenue management within the industry has revealed that hoteliers can maximize on their profits and at the same time enhance customer relations, thus leading to customer loyalty. As such, there has been a widespread shift from the traditional revenue management practice to a contemporary value-based approach in which the customers are integrated in the practice to enhance loyalty and boost revenue, even in long-term. Though some gaps still exist and the approach has not penetrated the global market, the trend witnessed from the meta-analysis of the relevant research literature material is positive and worth promoting. Several research literature materials on revenue management in hotels are reviewed and analyzed to identify the future developments within the industry. Furthermore, the similarities in the conclusions and findings within the reviewed materials are presented and the heterogeneities are also highlighted throughout the discussion. Besides, the gaps that exist in the concept of revenue management, limiting the proper implementation within the industry are identified and explored in details. The recommended practices to help enhance the practice are analyzed and a conclusion presented.
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2. Future Developments of RM
According to Shoemaker (2003) revenue management in hotel industry can be used to develop and enhance customer loyalty or hinder it through pricing strategies put in place. Indiscriminative revenue management has the potential to destroy customer loyalty. The hospitality industry is more inclined towards service delivery to its customers and thus inappropriate management of revenues can have adverse effects on the perceptions of the guests, hence negatively affecting the loyalty of the customers. It is therefore imperative that the hotel industry integrates management of revenue with relationship management to maximize on their customer loyalty; otherwise an eroded customer loyalty would be experienced (Noone et al., 2003). Furthermore, Bowen and Shoemaker (1998) have argued that customers perceived to be outside the bracket of loyal customers in hotel industry should be dealt with through yield management. An improper justification of yield management in the hotel industry would potentially result in customers, both loyal and otherwise, resorting to other competitors. According to the findings of Bowen and Shoemaker (1998), revenue management can have various consequences such that it can be very profitable on a short basis as well as having adverse effects on customer loyalty in the long run. In conclusion, Shoemaker (2003) states that the hotel industry should...
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