Revenue management Lecture 1
What skills are imperative for a revenue manager?
- Analytical ability
- Understand your costs
- Understand the revenue man’t system
- Accurately forecast
- Commercial acumen
- Impact of marketing/sales
- Communication
- Leadership
- Calculated risk taker
- Drive for success
What you already should know
- What is the history of revenue management
- How to calculate yield%, what rate categories do you think of?
- What is the revenue per available room?
- What are the conditions for implementing revenue management?
- What market segments can you identify?
- On what characteristics can you segment?
- What revenue management techniques can you apply in a period of low demand
- How to make the best decision in order to maximize profit?
History of revenue management Deregulation 1978
, Conditions for effective revenue management
- Perishable goods
- High fixed cost
- Low variable cost
- Limited and fixed capacity/inventory
- Time critical – large fluctuation in demand
- Highly segmented
What is the average profit margin in the hospitality industry?
- 0% - 10%
- 10% - 20%
- 20% - 30%
- 30% - 40%
Price elasticity of demand:
The absolute value of percentage change in the quantity of a good demanded
Devided by percentage change in the price of that good (product or service)
PXQ = REVENUE
Customers can be segmented by (regular segmentation methods (geographical,
psychological, etc)
- Who do they travel
- When do they travel
- When do they book
- Where do they book
What skills are imperative for a revenue manager?
- Analytical ability
- Understand your costs
- Understand the revenue man’t system
- Accurately forecast
- Commercial acumen
- Impact of marketing/sales
- Communication
- Leadership
- Calculated risk taker
- Drive for success
What you already should know
- What is the history of revenue management
- How to calculate yield%, what rate categories do you think of?
- What is the revenue per available room?
- What are the conditions for implementing revenue management?
- What market segments can you identify?
- On what characteristics can you segment?
- What revenue management techniques can you apply in a period of low demand
- How to make the best decision in order to maximize profit?
History of revenue management Deregulation 1978
, Conditions for effective revenue management
- Perishable goods
- High fixed cost
- Low variable cost
- Limited and fixed capacity/inventory
- Time critical – large fluctuation in demand
- Highly segmented
What is the average profit margin in the hospitality industry?
- 0% - 10%
- 10% - 20%
- 20% - 30%
- 30% - 40%
Price elasticity of demand:
The absolute value of percentage change in the quantity of a good demanded
Devided by percentage change in the price of that good (product or service)
PXQ = REVENUE
Customers can be segmented by (regular segmentation methods (geographical,
psychological, etc)
- Who do they travel
- When do they travel
- When do they book
- Where do they book
