Question

Identify (3) three revenue management “factors” that will have an impact on a hotel with respect to optimizing revenue generation. Explain and elaborate each concept.

Answer 1

The three revenue management factors that can impact the hotel concerning the revenue generation include the following:

1. dynamic pricing- This strategy involves changing the rates of the rooms with respect to the market data. This strategy takes into account demand and supply and this results in altering and changing the prices so as to maximise the generation of revenue. It is important to mention that this method is highly applicable in today's market and is practical to use.

2. Open pricing- This strategy highlights the ability of the hoteliers to change their pricing levels depending on the distribution channels and target markets. This flexibility allows the hoteliers to make a better prediction of the market. If the daily rates are kept average and prices lower than the rate of occupancy of the room will be higher and will result in high revenue.

3. Skimming strategy- this is one of the expensive strategies and it means pricing the rooms at the highest. To be a successful price, it is also important for the consumers to understand why they will pay more, the features and benefits they will receive.

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