HOSPITALITY REVENUE MANAGEMENT

Hospitality Revenue Management: Blue Salt

Executive Summary

According to the recent surveys that were conducted by various revenue management professionals in the field of hospitality management, suggested that strategic importance on revenue management will bolster. The use of revenue management will be aided by the various sophisticated technology in order to include different income torrents of the hotels. Australia is now rapidly adapting to the change in the needs of the hotel industry due to globalization and urbanization. To guide this change a manager is required to supervise the change. The role of revenue management is to develop and frame techniques to measure the revenue of the company. A revenue manager not different form the managers of other departments. This report tries to highlight the factors that create hindrance for Blue salt restaurant to perform effectively and efficiently. The factors highlighted by the report include increasing price of raw materials, unskilled labour, inappropriate use of technology, and emergence of new customer segments. The third chapter of the report tries to frame guidelines that can used eliminate bottleneck in the operation of Blue salt. It also spreads light on the financials of Blue salt, highlighting the unusual trends due to which operational cost for Blue salt might increase. Revenue management in that hotel is identified along with present problem it is facing. The operations in that hotel are also observed. The loopholes in their operation are identified. To remain competitive in the market the report also develops a framework which if implemented by Blue salt can help to achieve a major market share in the dynamic hotel industry.

1.0 Introduction4

1.1 Background Study5

2.0 Literature Review6

3.0 Discussion7

3.1 Management of the employees7

3.2 Make the brand name stronger8

3.3 Latest Technology8

3.4 Incorporation of a Proper Revenue Management System8

3.5 Dealing with changes9

3.6 Inventory Management9

3.7 Income Statement9

3.8 Balance Sheet10

3.9 Horizontal Analysis10

4.0 Conclusion11

5.0 Recommendation11

References13

Appendix15

Hospitality Revenue Management: Blue Salt

1.0 Introduction

Revenue management (RM) is the business practice of selling the right product and service to the right customer for the right price at the right time. The concept of “right” in this definition means achieving the maximum revenue for the sellers and gaining the maximum value for the buyers. It is a concept which came up through technological advances. The basic principle of hotel revenue management is to match the room rate and timing of the sale to the buyer's needs. In the hospitality industry the goal of revenue management is to maximize the revenue by forecasting the future demand based on the current and past reservation data. A number of authors have proposed three basic levers of RM which justify the previous definitions: the price, the time and the space. We have all noticed the arrival of the hotel market crisis in recent months - and we are assailed by the uncertainty of what will happen in future.

In recent years - when we had a strong market, when applying revenue management techniques, we limit ourselves to higher rates. "Revenue Management is the adjustment of prices on demand" - in times of ...