REVENUE MANAGEMENT

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Revenue Management

Table of Contents

1Executive Summary3

2Starwood Hotels & Resorts Worldwide, Inc3

2.1Starwood Hotels & Resorts Quality Service4

2.2Resort's Market Characteristics4

3Factors affecting Starwood Resort's Prices5

3.1Taxation5

3.2Industry Assistance6

3.3Domestic tourism7

3.4Business travel7

3.5International tourism8

4Conclusion8

5References9

Revenue Management

Executive Summary

The paper will be focusing on the Starwood Hotels & Resorts Worldwide, Inc. This resort has its head office in White Plains, New York, and operates the St. Regis and Luxury Collection, Sheraton, Westin, W and Four Points brands. At the first quarter of 2012, it owned, operated or had franchisees in 1,090 properties across 100 countries, with about 154,000 employees. Starwood is moving more toward operating hotels under management or franchised agreement, rather than owning and operating them directly (Brotherton, 2008). It is expected that company revenue to increase steadily in 2012 following strong growth in 2011. In 2011, RevPAR increased 9.7% for same-store hotels, and 7.4% in constant dollars. Management and franchise fees both increased strongly in 2011, with higher costs limiting profit growth for the year.

Starwood Hotels & Resorts Worldwide, Inc

In 2010, company revenue rose 6.2% to $5.1 billion, while net income increased dramatically as RevPAR and management and franchise fees were increased substantially in-line with a solid increase in demand and a fall in restructuring charges. The company also relaunched the Sheraton brand and received a good response in the North American market. In 2009, total revenue fell 17.2% to $4.8 billion, but costs and expenses also fell. Net income of $71 million was still reported. The company continued with its co-branding credit card partnership with American Express and closed 15 hotels as the recession took its toll on its financials. Company revenue declined 3.3% in 2008, with net income down 39.4% to a margin of 5.6%. The company sold or closed 19 hotels over the year. Same store global revenue declined 7.0%, as owned hotels revenue fell 1.5%. For North America, the sale store revenue fell 2.2% to $1.3 billion, while internationally it fell 0.3% to $736 million.

Starwood Hotels & Resorts Quality Service

The quality has been considered as the most important element for a service based organization. A commonly used definition of quality is “Delighting the customers by fully meeting their needs and expectations”. Now the idea of quality in the tourism sector is warily to get the goal. Like all other organization, tourism also lies in the service base industry which means that they have to keep their quality of a high standard. The aspects of quality in tourism varies from the standard of health and safety, usual audits and check, reporting of and trade with irregularities as well as records, helpful phone call to reduce trouble, conflict and prime incidents, legal law, provincial law and contractual responsibility (Veal, 2006).

Resort's Market Characteristics

The Global Hotels and Resorts industry is sensitive to a wide range of economic, social, demographic and geopolitical factors that affect domestic overnight travel within any country, for any purpose, as well as global international travel demand and patterns. Overall factors are expected to be positive in 2012, which will result in international tourism numbers increasing ...