Revenue Management & it's advantages

 What is Revenue Management ?

Revenue management is the application of disciplined analytics that predict consumer behaviour at the micro-market levels and optimize product availability and price to maximize revenue growth. But in terms of hotel, Revenue management is " Selling the right room to the right customer at the right moment for the right price through the right distribution channel, with the best cost efficiency. - Martijn "

Why Revenue management is important ?

In hotel industry revenue management is very much important for hotel owners because there are many  customers who are ready to pay different amount for the same type of room. at this point hotel owner need Revenue management team to decide pricing on market situation. because as we know Demand and supply rule. if, there is an high demand you can keep pricing up for your hotel but if, demand is low we cannot keep same price. For pricing and distribution Revenue management is Imporant.

Revenue management optimize your revenue and improve your financial result. Therefore, revenue management strategy is necessity for modern hotels and for effective revenue management specialist knowledge, analytical skills, experience and working knowledge of market.

Large hotels and other small chain hotels are capable to have full time revenue manager with all require technology. but the stand alone (Individual) hotel owner might not have budget to hire full time revenue manager so they outsource Revenue management. outsourcing revenue management helps stand alone properties to get up-to-date knowledge, market insights and techniques to stay ahead of competitors .

Advantage of Revenue management :-

1. Financial result -  Outsourcing revenue management the main advantage is they have technology, the most up-to-date methods, a working knowledge of the hotel industry and the ability to increase revenue.

2. Best Alternative - Another advantage to outsource revenue management that it is best alternative option for small hotels. whenever they need they can outsource and they don't need to invest in technology. 

3. Leading with competitors - When revenue management is outsourced to a third party with the right expertise, hotels open up the possibility of gaining a significant advantage over competitors. This is especially true of competitors who do not have a revenue management strategy in place.

4. Focus - Finally, running a hotel is complicated and involves managing and dealing with the needs and challenges associated with a number of departments, ranging from sales & marketing, reception and housekeeping, through to the restaurant and bar staff. Therefore, outsourcing responsibility for revenue management can reduce the workload significantly.

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