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1. Activity No. 6
Revenue Management
Shiela Mae Rosal
BSHM IV
1. Define Revenue Management
-Revenue management is the application of disciplined analytics that predict
consumer behaviour at the micro-market levels and optimize product availability,
leveraging price elasticity to maximize revenue growth and thereby, profit.
2. What is the importance of revenue management?
- Revenue management is highly important to hoteliers because it allows them to
maximize revenues and yields, using smart tech and big data. The main aim is to
foresee market demand and react to changes in the market efficiently. Without a
doubt, these are challenging times for the hospitality industry.
3. Explain the different revenue management strategies?
 Understand your market
- A key part of operating a business is understanding your industry and the
market you are serving. That means analyzing the competition, the
opportunity for growth and your audience or customer base. One of the
most important first steps to understanding the market is knowing your
customers
 Segmentation and price
- Simply put, price segmentation is a whereby prices are differentiated
based on willingness to pay. It is driven by the fact that price sensitivity can
vary so much from customer to customer, from product to product, and in
all the locations that they use your product
 Work closely with other departments
 Forecasting strategies
- Forecasting is a technique that uses historical data as inputs to make
informed estimates that are predictive in determining the direction of future
trends
 Embrace search engine optimization
- is a marketing strategy focused on optimizing a website to make it rank on
page 1 of Google. The reason that businesses across the world want their
website to rank on page 1 of Google is to gain exposure for their business.
 Choose the right
 Pricing strategy
 Incentive for direct booking
 Focus on mobile optimization
 Work with a freelance revenue manage

2. 4. Discuss the hotel pricing strategies.
 Dynamic Pricing
- Dynamic pricing, also called real-time pricing, is an approach to setting the
cost for a product or service that is highly flexible. The goal of dynamic
pricing is to allow a company that sells goods or services over the Internet
to adjust prices on the fly in response to market demands.
 Open Pricing
- Open pricing is a way of pricing and distributing hotel rooms that enables
a property to always be on sale at the best price for the customer and the
most profitable price for the property. It's a departure from a best available
rate, BAR, strategy, which is used by most hotels.
 Value-added pricing
- Value-added pricing, also known as value-based or customer value-based
pricing, is a strategy for setting goods and services prices based on the
consumer-perceived value of the product. You don't determine the value-
added price by analyzing production costs and profit alone.
 Discount pricing
- refers to a range of strategies where the price of a product or service is
decreased in the interest of generating interest, unloading excess inventory,
or boosting sales. The effectiveness of discount pricing rests on consumers'
perception that they're 'getting a good deal' for an offering.
 Price per segment
- price segmentation is a whereby prices are differentiated based on
willingness to pay. It is driven by the fact that price sensitivity can vary so
much from customer to customer, from product to product, and in all the
locations that they use your product.
 Length of stay
 Positional Pricing
- is the act of placing a price on a product or service that is within a certain
price range. The price positioning indicates where a product sits in relation
to its competitors in a certain market as well as in the mind of different
customers
 Penetration pricing
- Penetration pricing is a marketing strategy used by businesses to attract
customers to a new product or service by offering a lower price during its
initial offering. The lower price helps a new product or service penetrate the
market and attract customers away from competitors.