Unit 1 Rooms Division

1

Rooms Division

and

Revenue Management

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Objectives

The students will be able to:

1.

2.

3.

4.

5.

Identify the basic concepts and principles of revenue management, including

the factors related to revenue management systems.

Identify price-demand relationship.

Explain a simple forecasting method to support demand and revenue

management.

Explain and exploit opportunities for revenue optimization in various service

businesses in the hospitality industry.

Apply revenue management to actual situations and develop a

recommendation for its application.

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Unit 1

Introduction

Unit objectives:

• Explain why an excessive internal focus on

profits or owner’s return on investment is

detrimental to the long-term success of a

hospitality business.

• Explain why business exist to create wealth for

their customers.

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Unit Topics

Introduction to revenue management

The purpose of business

The purpose of revenue management

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Introduction

In increasing numbers, professionals in the hospitality industry

are coming to the realization that management of their revenue

(revenue management) is critical to their organizations success.

Essential RM Term

Revenue: The total amount of sales achieved in a specified time period.

Revenue is calculated as:

Number of units sold x Unit price =

Revenue

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Introduction

The early entrepreneurs understood the importance of strategic

pricing because of a simple mathematical truth; in a service

business, the sum of prices paid by the business s customers

equals the total revenues received by that business.

Every member of an organization has a role to play in revenue

management (Hayes & Miller, 2011).

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Introduction

Effective...