Revenue Management Within Swedish Hotels

Tourism and Hospitality Management Master Thesis No 2004:61

REVENUE MANAGEMENT WITHIN SWEDISH HOTELS

Leyla Göthesson and Susanna Riman

Graduate Business School School of Economics and Commercial Law Göteborg University ISSN 1403-851X Printed by Elanders Forum

ABSTRACT

“Revenue management is the key to making money” (Swedish Hotel Manager). The question is, whether hotels in Sweden practice what they preach. In today’s volatile business climate the management of revenue has become an ever increasing topic, especially for hotels. The growing interest is derived from professional consultants within the hospitality industry operating in Sweden as well as from larger hotel chains operating on a national as well as international market. There seems to be the misperception that revenue/yield management is the same as simply offering discounted room prices. Further, it is believed that the concept would only be applicable to larger hotels and in market conditions where demand exceeds supply. The system is also linked to a decrease in guest satisfaction, dilution of brand and loss of goodwill. Having undertaken fieldwork within hotels operating in Sweden, we suggest that in order to overcome the misperceptions and perceived boundaries of yield management, the system must be interlinked with customer, capacity, price, sales and marketing, cost, and human resource management, and that a proactive management style needs to be adopted in order to be financially successful in the long run. Key words: Yield management, revenue management, hotel industry, proactive management

ACKNOWLEDGEMENTS

We would like to acknowledge and thank those who contributed, assisted and motivated us during the writing of this thesis, especially the following: Fil. Dr. Eva Gustavsson, who has been our tutor throughout the thesis work and has assisted us with her great knowledge, experience and expertise. Mr. Morten Olsson, Consultant at Resurs AB. Mr Olsson inspired us to undertake...