There has been increased focus on many of the innovative tools which have a strong financial bearing on the profits and ROI. These include change in profits with the change in the variables, other factors remaining constant; availing loans at cheap interest rates and making use of trading on equity and strategic management of limited resources(Abrate, G., & Viglia, G. 2016). The 2 main points being focused in a customer eccentric market are their satisfaction and differential pricing strategy. Besides this, to increase the profitability, companies are also focusing on review management besides revenue management as one cannot thrive if the other is not practices on the right lines. Besides all this, the competitor pricing is also being focused in order to keep the rates competitive enough to attract customers (Riasi, A., Schwartz, Z., Liu, X., & Li, S. 2017).
oriented’ to ‘review and reputation oriented’.
Working on positive footing for the hotel Industry.
Food and beverage segment being the most profitable.
The major impact in the hospitality industry in the last few years has been the movement of the market from price and rate oriented to “review and reputation based” where customers are willing to pay higher prices if the review and brand of the hotel has been standard in the past(Pereira, L. N. 2016). The role of promotion, advertisements and discounts over several channels have increased manifold and bringing revenues to the hospitality industry. Besides the hotel industry, the major industry that has had positives impacts is the food and beverages segment which comprises about 30-35% of any hotel/restaurant (Kimes, S. E. 2016).
There can be many advancements and shifts that can be seen in the coming years such as shift of customer focus to the online reviews, requirement of quality of the service provided rather than the quantity. Also, the future pricing would be complex as the balance between demand and supply chain in the industry will undergo major swings(Ng, F., Rouse, P., & Harrison, J. 2017). Besides this, the hotels would find it more profitable to invest in data yielding of the customer and competitors, market, etc rather than making huge one time investments in the property. Since the overhead costs of the hotel industry is one of the major areas of concern, it would need to be redefined and the same would have to be cut down in order to increase profits (Heo, C. Y. 2017).
Testing new models of revenue management.
- Effective, optimum and efficient allocation of the resources.
- Key to efficiency and profitability: Delivering the right kind of service to the right customer at the correct moment at the appropriate place through the right channel at the best possible commission.
- In simple words, “Customer is always right”.
From the recent trends and the future courses of action, it can be said that customer is the ultimate king and is always right. It all depends on how the product is marketed and sold to the right customer at the right time to earn the maximum profits. Besides this, there also comes the need to allocate and utilize the minimum resources to the best possible use. Going forward, there are many revenue models which are being continuously tested to drive bottom and topline of the industry like 3BL approach, incentive marketing etc and hence, there is a long way to go for the hospitality industry(Mauri, A. G. 2016).
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Riasi, A., Schwartz, Z., Liu, X., & Li, S. (2017). Revenue Management and Length-of-Stay-Based Room Pricing. Cornell Hospitality Quarterly, 1938965517704372
Ng, F., Rouse, P., & Harrison, J. (2017). Classifying Revenue Management: A Taxonomy to Assess Business Practice. Decision Sciences, 48(3), 489-522.
Kimes, S. E. (2016). The evolution of hotel revenue management. Journal of Revenue and Pricing Management, 15(3-4), 247-251
Abrate, G., & Viglia, G. (2016). Strategic and tactical price decisions in hotel revenue management. Tourism Management, 55, 123-132
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Pereira, L. N. (2016). An introduction to helpful forecasting methods for hotel revenue management. International Journal of Hospitality Management, 58, 13-23