Introduction to Revenue

Management
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by
Bijoy-Gaurav Sengupta
bijjoy_sen@yahoo.com

Have you
ever sold any
of your
belongings?
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How did you feel?

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What if you had a friend who could advise you about:

Who is looking?
How many people are looking?
Where are they located?
How badly are people looking?
How much can they pay?
What should be the price?
Should you wait now and sell later?
Should you sell now rather than waiting?
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Common Definitions
Selling the right product,
to the right customer,
at the right time,
at the right price.

The art of turning away business

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History of Revenue Management

Mid 1970s Deregulation of airlines.
Early 1980s American Airlines and Delta start early bird.
Late 1980s Creation of Pricing levels and hurdles.
1990s Advent of Low cost carrier business models.
1990s Car rentals and hotels copy the Revenue Management model.
1990s Investment in Revenue Management Systems.
Mid 1990s Hotels start hiring Revenue Managers (US & Europe).
Late 1990s Hotel Revenue Management concept adopted by Asian Hotels.
2000s Hotel chains start investing in customized RM tools.
Current decade Function Space, spa, restaurants.
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Revenue Management is not Finance!

Revenue Management is not Reservations!
It is about Taking decisions which shape the business
mix of a hotel with the intention of
maximizing revenue.
It is about getting the best business mix.
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Business Mix
Rs. 10,000

Rs. 7,000
Rs. 6,000
Rs. 5,000

Rate

Transient

Rs. 4,500
Rs. 4,000
Groups
Wholesalers

Negotiated
Corporate

Discount

Crew/Long Stay

10%

5%

5%

35%

25%

20%

Rooms

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Who uses Revenue Management?

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10

Studies have shown that a hotel with a Revenue

Manager can make 4% more revenue than a hotel
without one.

Total Room Revenue = 40,00,00,000

4% = 1,60,00,000

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Does it now make sense to hire a Revenue Manager?

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12

Thank You

For Revenue Manager on Hire, Call +91 9830282228