1. Budgeting and Revenue optimization
DESINGED BY
Sunil Kumar
Research Scholar/ Food Production Faculty
Institute of Hotel and Tourism Management,
MAHARSHI DAYANAND UNIVERSITY, ROHTAK
Haryana- 124001 INDIA Ph. No. 09996000499
email: skihm86@yahoo.com , balhara86@gmail.com
linkedin:- in.linkedin.com/in/ihmsunilkumar
facebook: www.facebook.com/ihmsunilkumar
webpage: chefsunilkumar.tripod.com

2. A budget is a formal written statement of management’s plan for a
Specific period of time, expressed in financial terms.
Budget

3. A budget
1. Helps to establish future goals.
2. Evaluates past activities in relation to planned activities.
3. Prescribes the formulation of work plans.
4. Forecasts the amount of revenue that will be available.
5. Predicts how funds will need to be expended.
6. Measures actual results against planned or desired results.
7. Identifies potential problem areas that need attention.
8. Estimates what will be available at the end of budget period.

4. Revenue
Income earned by food & beverage business from the
sales of its goods and services to the guests.
Revenue management is a technique to optimize
the revenue earned from a fixed, perishable resource.
The challenge is to sell the right resources to the right
customer at the right time.
Revenue Management

5. Revenue optimization
To implement customer-centric pricing strategies.
Revenue optimization is the responsibility of
revenue management department.
Revenue Management implements the basic principles
of supply and demand economics in a tactical way
to generate incremental revenues.

6. There are three essential conditions for revenue
management to be applicable:
• That there is a fixed amount of resources available
for sale.
• That the resources sold are perishable. This means
that there is a time limit to selling the resources,
after which they cease to be of value.
• That different customers are willing to pay a
different price for using the same amount of
resources.

7. Revenue Management is of especially high
relevance in cases where the constant costs are
relatively high compared to the variable costs.
The less variable costs there are, the more the
additional revenue earned will contribute to the
overall profit.

8. To illustrate this, we can take the example of
the luxury hotel which charges different prices
for different customers.
In India it is generally practiced in star hotels to
maximize the revenues. the customer who is
price sensitive and time conscious generally
pays lesser tariffs than a customer who is
willing to pay more and books the room one or
two days before the stay.

9. Revenue Management in other words tries to
maximize revenues by managing the tradeoff
between a low occupancy and higher room rate
scenario (business customers) versus a high
occupancy and lower room rate (vacation
customers).
DESINGED BY
Sunil Kumar
Research Scholar/ Food Production Faculty
Institute of Hotel and Tourism Management,
MAHARSHI DAYANAND UNIVERSITY, ROHTAK
Haryana- 124001 INDIA Ph. No. 09996000499
email: skihm86@yahoo.com , balhara86@gmail.com
linkedin:- in.linkedin.com/in/ihmsunilkumar
facebook: www.facebook.com/ihmsunilkumar
webpage: chefsunilkumar.tripod.com