This document provides an introduction to revenue management. It discusses the history of revenue management in industries like airlines, car rentals, and hotels. It defines common terms like selling the right product to the right customer at the right time and price. It also discusses what revenue management is and is not, such as it is about maximizing revenue through business mix decisions rather than finance or reservations. The document shows how a hotel can optimize its business mix across customer segments to improve profits and cites a study finding hotels with revenue managers earn 4% more revenue on average. It encourages hiring a dedicated revenue manager to boost a hotel's bottom line.

1. Introduction to Revenue Management
by
Bijoy-Gaurav Sengupta
bijjoy_sen@yahoo.com
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2. Have you
ever sold any
of your
belongings?
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4. How did you feel?
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5. 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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6. 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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7. 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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8. 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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9. Business Mix
Rs. 10,000
Rs. 7,000
Rs. 6,000
Rs. 5,000
Rate Rs. 4,500 Transient
Rs. 4,000
Negotiated
Corporate
Groups
Discount
Wholesalers
Crew/Long Stay
10% 5% 5% 35% 25% 20%
Rooms
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10. Who uses Revenue Management?
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11. 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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12. Does it now make sense to hire a Revenue Manager?
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13. Thank You
For Revenue Manager on Hire, Call +91 9830282228