Revenue Management for the Hospitality Industry

David K. Hayes has more than 30 years experience in hospitality management and education. He has taught at Texas Tech University and the University of Houston. His industry experience includes serving as the Managing Owner of a hotel and conference center and a professional writer and consultant. Allisha Miller has worked in the hospitality industry in a number of different roles, most recently as director of sales and marketing of a hotel and conference center. Currently, she is a professional writer and simulation developer for hospitality industry clients.

• Preface viiAcknowledgments xvPart I : Revenue Management Principles 1Chapter 1: Introduction to Revenue Management 2Introduction 3The Purpose of Business 5The Purpose of Revenue Management 11The Purpose and Design of This Book 12Chapter 2: Strategic Pricing 35What Is a Price? 36The Importance of Price in the 4 Ps of the Marketing Mix 45The Role of Supply and Demand in Pricing 49The Role of Costs in Pricing 53Implementing Strategic Pricing 61Chapter 3: Value 68The Role of Value in Pricing 69The Relationship Between Quality and Price 75The Relationship Between Service and Price 77The Link Between Quality, Service, and Price 79The Art and Science of Strategic Pricing 84Chapter 4: Differential Pricing 91Ten Principles of Managing Revenue 92Differential Pricing 93Limits to Differential Pricing 99Applying Differential Pricing 103Revenue Management or Revenue Optimization? 121Chapter 5: The Revenue Manager’s Role 129The Revenue Manager in the Hospitality Industry 130Legal Aspects of Revenue Management 133Ethical Aspects of Revenue Management 139The Revenue Manager Position 147The Revenue Management Team 156Part II : Revenue Management For Hoteliers 163Chapter 6: Forecasting Demand 164The Importance of Demand Forecasting 165Historical Data 167Current Data 174Future Data 185Demand Forecasts and Strategic Pricing 193Chapter 7: Inventory and Price Management 208The Marketing Mix Revisited 209Inventory Management 209Characterizing Rooms for Optimum Inventory Management 212Designing Unique Room Codes 215Classifying Guests by Market Segment 216Overbooking as an Inventory Management Strategy 227Price Management 233Stay Restrictions 249Principles of Inventory and Price Management 251Chapter 8: Distribution Channel Management 259Managing Distribution Channels 260Nonelectronic Distribution Channels 268Electronic Distribution Channels 278Principles of Distribution Channel Management 298Chapter 9: Evaluation of Revenue Management Efforts in Lodging 306The Lodging Revenue Paradox 307STAR Reports 318Competitive Set Analysis 325Market Share Analysis 332Additional Assessments 335Common-Sense Revenue Optimization 340Part III: Revenue Management For Foodservice Operators 349Chapter 10: Revenue Management for Food and Beverage Services 350Traditional Foodservice Pricing Methods 351The Cost Against Cost-Based Foodservice Pricing 359Applying Differential Pricing in Foodservices 364Factors Affecting Value Perceptions in Foodservices 373Chapter 11: Evaluation of Revenue Management Efforts in Food and Beverage Services 391Food and Beverage Revenue Analysis 392Examination of Revenue Sources 393Measurement of Revenue Change 399Evaluation of Revenue-Generating Efficiency 409The Revenue Evaluation Process in Foodservices 420Part IV: Revenue Management In Action 429Chapter 12: Specialized Applications of Revenue Management 430Characteristics of Organizations Applying Revenue Management 431Service Industries Applying Revenue Optimization Strategies 440Specialized Revenue Management Duties 441Revenue Management and Destination Marketing 450Chapter 13: Building Better Business 458Keys to Building Better Business 459Better Business Issues in Moderate to Strong Markets 472Better Business Issues in Weak or Distressed Markets 480Index 503