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Total Revenue Management

Tuesday, March 2, 2010
From HSMAI's Revenue Management Advisory Board -- Revenue management of hotel inventory has long been the practice for hoteliers worldwide, both large and small, chain and independent. Hotel operators understand and accept the need to forecast customer demand at some level of detail and recommend product availability conditions that will deliver the maximum revenue based on that demand. However, for the most part, traditional hotel revenue management is focused purely on maximizing sleeping room revenue with no regard for any other revenue associated with the hotel guest.
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eConnect is a one-stop portal to global information and resources on hospitality sales and marketing topics, including hotel sales and marketing, Internet marketing and social media, revenue management, resort marketing, destination marketing, and hospitality sales and marketing education. eConnect is a service provided by the Hospitality Sales & Marketing Association International (HSMAI) Foundation. Many HSMAI Foundation eConnect® resources are available exclusively to HSMAI members. Trial membership is available to industry professionals for 30 days.

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How Hotel Guests Perceive the Fairness of Differential Room Pricing
When customers perceived hotel revenue management practices to be fair, they are more likely to be satisfied with the hotel and are more likely to return to that hotel in the future. In this survey of 815 people, we examined the effects of three factors on the respondents' assessment of the fairness of hotel rate policies. Those three factors were familiarity with the practice, provision of information about the practice, and the brand class of the hotel. Of those three, we found that familiarity with a pricing practice was far and away the most important factor affecting perceived fairness. The implication is that revenue managers should focus their efforts on increasing guests' familiarity with their pricing practices. (PDF Document)

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