Essay Hotel Revenue Management Action Plan

Complete the grid below.

Key Business Problem(s)

One of the key business problems related to revenue in a hotel is the pricing strategy. Numbers of hotels would potential to experience this type of key business problem which grounded by supply & demand, as well as internal & external data. Internal data involves customer profiles, the price rates, segmentation, and so on.

On the other hand, the external data consists of some points of data such as the price of competitor hotels, the weather data, along with the pattern of booking in the hotel.

Strategies

There are some hotel pricing strategies to handle this problem such as mentioned below (O'Fallon & Rutherford, 2010).

·         Cost-based pricing

This appears when the pricing of a hotel is determined by some financial reasons such as equal profit further the entire costs related to product sales.

·         Customer-driven pricing

This strategy is basically a demand-driven intended for a service at a specific time, in which demand is able to change quickly.

·         Value-based pricing

This strategy commenced before any investment, then some value would be delivered to the customers.

·         Competition-driven pricing

This strategy happens if a hotel desires to attain a share of targeted market, and then create a price of its services to attain this level.

Steps

The steps that need to be taken to practice the pricing strategies are (Ivanov, 2014):

·         Create the price strategically

Every single hotel should be careful in practicing its pricing strategies with a purpose to boost up the customers’ volume. In addition to this, a hotel should identify its main customers and maintain the pricing integrity of those customers.

·         Provide more value consistently

It is the fact that most successful hotels deliver more value consistently toward their customers, and those hotels also capable to catch up the developed margins as an outcome.

·         Create and conduct a comprehensive analysis of market pricing

Every single hotel should also create and conduct a comprehensive analysis of market pricing. This could be done with viewing the market that exists in the hotel markets, and the price of other hotel competitors create for their services.

Timeline

Identify a timeline for implementation.

1.      What will you (or your team) do in the next month?

In next month, I will create a price strategically as the first step to handle one of the key business problems that should be handled by the hotel.

2.      What will you have completed over the next quarter?

Over the next quarter, I would have to complete the entire steps that I have made in the context of the pricing strategy in the hotel. This should be done due to it would not only make the hotel success in tackle up the key business problem but also will increase the revenue for the hotel as well.

Measurement/Results

The measurements of positive results from my strategies are such as:

·         An increasing number of customers, both from the new customers and also the repeating customer of the hotel

·         An improved revenue for the hotel achieved by the practices of all the steps in the pricing strategies

·         An increasing rank of the hotel compare with before the pricing strategies created and performed by the hotel

·         An increasing numbers of booking for events, meetings, or any other occasions that booked by the customers to the hotel

·         The increasing profit of sales monthly for the hotel which comes from the booking of rooms

Module 1

Make some meetings and discussions from the relevant team to create proper pricing strategies. The meetings and discussions will also plan and schedule the timing of implementation for the pricing strategies to be conducted. Also, make a plan in case the hotel should manage any training for the hotel staff in the context of implementing the pricing strategies to its daily business practices.

Module 2

Make sure that the entire staff understand the pricing strategies that the hotel will conduct. Then the hotel manager should monitor the daily practice of the pricing strategies to ensure that the strategies along with the entire steps perform properly. If necessary, then the hotel could give some relevant training for the relevant hotel staff as well.

Module 3

Make further meetings and discussions with a purpose to evaluate the processes, practices, and also the progress of the pricing strategies’ implementation. These meetings and discussions will also discuss further steps to improve if the progress of the pricing strategies’ implementation is not positive. The reason is because the hotel should make sure that the pricing strategies will give good progress since it would handle one of the key business problems for the hotel to grow.

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Module 4

Evaluate the internal and external progress of the hotel. The internal progress such as the number of customers, bookings, or reservations made to the hotel, to make sure that those numbers are increasing. On the other hand, the external progress would be like view the hotel position in the market to compare with other hotels competitors. With doing an evaluation on both internal and external progress, then the hotel would able to identify the practices, along with the challenges that need to be handled as well. In other words, the hotel should able to maintain from both internal and external business position to achieve the main goals of pricing strategies.

Module 5

Another recommendation for the hotel to conduct is by getting review or feedback from both new customers and also its repeating customers as well. This should be conducted by the staff or manager with excellent customer service so that the customers could give their feedback of the hotel honestly and accurately. In the context of pricing strategies, the hotel staff or manager could ask the feedback of customers about what they think about the price of rooms that the hotel made, is it too expensive, or worth the value. With getting the feedback from its customers, the hotel would able to know properly what the customers review, not only for the pricing but also for its customer service as well.