A Meta-Analysis on Revenue Management

Topics: Marketing, Hotel, Customer relationship management Pages: 13 (3949 words) Published: March 7, 2013
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.

Signed………………………………………….. Signed…………………………………………..

2 / 17


1. Introduction……………………………………………………………………4 2. Analysis the future developments of RM………………………………...5 3. Conclusion……………………………………………………………………14 References list

3 / 17

1. Introduction

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.

4 / 17

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...

References: List
Anderson, C. K., & Carroll, B. (2007). Demand management: Beyond revenue management. Journal of Revenue and Pricing Management, 6 (4), 260–263. Avinal, E. A. (2004). Revenue Management in Hotels. Journal of Foodservice Business Research, 7 (4), 51-57. Bolton, L. E., Warlop, L. and Alba, J. W. (2002) ‘Consumer perceptions of price (un)fairness’, Journal of Consumer Research, 29(4), 472–491. Bowen, J. & Shoemaker, S. (1998) ‘Loyalty: a strategic commitment’, Cornell and Restaurant and Administration Quarterly, 39, 12–25. Choi, S., & Mattila, A. S. (2004). Hotel revenue management and its impact on customers’ perceptions of fairness. Journal of Revenue and Pricing Management, 2 (4), 303–314. Cross, R. G. (1997). Revenue Management — Hard-core Tactics for Market Domination. Broadway Books, New York. Dana, J. D. (1999). Using yield management to shift demand when the peak time is unknown. RAND Journal of Economics, 30 (3), 456–474. Dolan, R. J. and Simon, H. (1996). Power Pricing, The Free Press, New York. Gallego, G. (1996). A Demand Model for Yield Management, Technical Report, Columbia University, Dept. of Industrial Engineering and Operations Research, New York, NY. Hendler, R., & Hendler, F. (2004). Revenue management in fabulous Las Vegas: Combining customer relationship management and revenue management to maximise profitability. Journal of Revenue and Pricing Management, 3 (1), 73–79. Kuhlmann, R. (2004). Why is revenue management not working? Journal of Revenue & Pricing Management, 2(4), 378–387.
15 / 17
Lee, S. H., Bai, B., & Murphy, K. (2012). The Role Demographics Have on Customer Involvement in Obtaining a Hotel Discount and Implications for Hotel Revenue Management Strategy. Journal of Hospitality Marketing & Management, 21 (5), 569588. Li, M. Z. F. (1994). Pricing Perishable Inventories by Using Marketing Restrictions with Applications to Airlines, Ph.D. thesis, Faculty of Commerce Business Administration, University of British Columbia, Vancouver, BC. Martens, T. v., & Hilbert, A. (2011). Customer-value-based revenue management. Journal of Revenue and Pricing Management, 10, 87–98. Mcgill, J. I., & Van Ryzin, G. J. (1999). Revenue Management: Research Overview and Prospects. Transportation Science, 33 (2), 233-256. Mehrotra, R., & Ruttley, J. (2006). Revenue Management. Retrieved February 24, 2013, from http://www.ahla.com/uploadedFiles/AHLA/Members_Only/_Common/technology_pr imers_pdf/88119NEI02ENGE.pdf Noone, B. N., Kimes, S. E., & Renaghan, L. M. (2003). Integrating customer relationship management and revenue management: A hotel perspective. Journal of Revenue and Pricing Management, 2 (1), 7–22. Phillips, R.L. (2005). Pricing and Revenue Optimization. Stanford University Press: Stanford, CA. Queenan, C. C., Ferguson, M. E., & Stratman, J. K. (2009). Revenue management performance drivers: An exploratory analysis within the hotel industry. Journal of Revenue and Pricing Management, 10 (2), 172–188. Shen, Z.-J. M., & Su, X. (2007). Customer Behavior Modeling in Revenue Management and Auctions: A Review and New Research Opportunities. Production and Operations Management, 16 (6), 713–728. 16 / 17
Shoemaker, S. (2003). Future Of Revenue Management. Journal of Revenue and Pricing Management, 2 (3), 271–279. Songini, M.L. (2001) 'Hospitality players chack out CRM ', Computerworld, 25th June, 6, Storbacka, K. (1994) 'The nature of customer relationship profitability, analysis of relationships and customer bases in retail banking ', Working Paper, Swedish School of Economics and Business Administration, Finland. Talluri, K. and van Ryzin, G. (2004). The Theory and Practice of Revenue Management. Springer: Berlin. Terrero, R. (2002a) 'Carlson Hotels puts customers first with its technology initiatives ', Hotel Business, August, 36A/ Terrero, R. (2002a) 'Choice continues to enhance technology to benefit franchisees ', Hotel Business, August, 40A. Vinod, B. (2003a) ‘Pricing for profit: path to profitability with revenue and profit optimization’, paper presented at the 14th Annual Spring Conference, Professional Pricing Society, Las Vegas, Nevada, April. Vinod, B. (2003b) ‘The evolution of yield management: What YM capability does my airline need?’, 43rd Annual AGIFORS Symposium Proceedings, September. Vinod, B. (2004). Unlocking the value of revenue management in the hotel industry. Journal of Revenue and Pricing Management, 3 (2), 178–190. Weatherford, L. R. (1994). Optimization of Perishable-Asset Revenue Management Problems that Allow Prices as Decision Variables, Working Paper, University of Wyoming, Laramie, WY. Wirtz, J., Kimes, S. E., Theng, J. H., & Patterson, P. (2003). Revenue management: Resolving potential customer conflicts. Journal of Revenue and Pricing Management, 2 (3), 216–226. 17 / 17
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Revenue Management Essay
  • Revenue Management Essay
  • Revenue Management Essay
  • Revenue Management Essay
  • Revenue Management Essay
  • Strategic Management and Swot Analysis Essay
  • revenue management Essay
  • Conditions of Revenue Management Essay

Become a StudyMode Member

Sign Up - It's Free