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Revenue Management: Strategy and Policy


Revenue management is the function of regimented tactics that predict consumer behavior. It has become a branch of the conventional business hypothesis and practices over the last few years. Revenue management has been widely also known as yield management. It largely deals with the progression of indulgence, speculation, and manipulation of consumer behavior, so as like any other business, it can maximize profit and revenues gained (Arkfed 34). The strategy and policy that are used are meant to advance and improve the effectiveness and productivity of defined as business. The complexity of this kind of management is heightened by the fact that several aspects of administration and management are directly involved e.g. rate management, distribution channel management and many others. This and other departments work hand in hand to design and implement all revenue administration strategies (Cross 58). Though pricing has been around since people started trading, there has been a great need for standardized pricing to customize the prices in the market. This cost control system has been effectively operational to all those businesses that have embraced revenue management.

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Hotel revenue management

To understand how revenue management acts, it is important to understand that the products and services have to be made available before the customers arrive at the particular premise, ensuring that the right prices have been set as well as that the particular commodities are in their correct working order. Hotels and other establishments in the industry make use of yield management and revenue systems to calculate the rates that are to be charged for the rooms therein, the limitations on the various rooms that have been made available, as well as the rates at which the upkeep of each of the rooms have been charged to maximize on the profits that they are to make and minimize on the daily expenditures. These systems are meant to measure the constrained as well as the unconstrained demands on the hotels and the demands of the customers along with the pace on the restrictions on the rooms, such as the length of stay into the rooms, the pay per day for each of the rooms, the rates of refunds, as well as the rooms that are in no condition to be sold (Cross 46). This is done as a means for hotel managers to target the right distribution to control the costs, meet the right price indexes, and mix accurate price measures to realize favorable yield revenues (Arkfed 45). Thus, for the sake of hotels, yield management, and revenue collection and maximization involves the sale of the available resources (at least those that are in good working order), together with the accompanying services, at the right prices, in their correct measures, and to the right customers.

According to the report, the daily payroll wages for the rooms available and those that are rented as well as those that have to be maintained is $2,693 while that which is paid for food and beverages is $5,878. Additionally, that which is paid for meetings and conferences in the UWC Hotel and Meeting Center is $5,648.

As seen from these figures, much of the wages are paid for the meetings and conference rooms that are made available for the various visitors necessitating more maintenance and upkeep to keep on generating income. Additionally, more marketing and resource development are required to be directed to this department to encourage more visitors to the hotel.

On the other hand, tourists and other visitors to the hotel come to the hotel for the sole reason of getting rested and having something to eat. In this regard, food is one of the most important features of the hotel and generates the most revenue, and concurrent payroll amounts, for the hotel. More needs to be done to cut down on the cost of expenditure, as is incurred from the payment of wages, and directed to maximizing the prices for greater returns.


Thus, to determine the right revenue management rates, the primary objective is the establishment of the right customer rates depending on their location and preferred tastes. In many cases of lack of subsidiaries, the procedure to determine the price items can result in discrimination. This happens when a firm/seller decided to charge customers that are using the same kind of goods, or else the same kind of service different prices in doing so from others. If the revenue management was to create a market where everything, of the same kind, was sold at the same price, perhaps this economical problem could not even exist. Research assist addresses the issue of that the revenue gained while the prices are under the influence and the determination of the yield management system could significantly increase rather than depending on their judgment. Hotels that depend on revenue pricing gain a competitive advantage by ruling in the market places. Their unchanging prices help win the trust of their customers thus continuing business since they can monitor clientele patterns and behavior. This strategy builds the ability to identify channel implementation and new utilizations thus becoming market leaders.

Works cited

Arkfed, Richard R. The Basics of Revenue Management [electronic Resource. New York: Oxford University Press, 1999.

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Cross, Robert G. Revenue management: hard-core tactics for market domination. New Jersey, NJ: Broadway Books, 1997.

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