Hotel Revenue Management System

2164 Words9 Pages
Abstract The paper presents a literature review of the main concepts of hotel revenue management (RM) and current state-of-the-art of its theoretical research. The article emphasises on the diff erent directions of hotel RM research and is structured around the elements of the hotel RM system and the stages of RM process. The elements of the hotel RM system discussed in the paper include hotel RM centres and non-pricing (overbookings, length of stay control, room availability guarantee) RM tools, the RM software, and the RM team. The stages of RM process have been identified as goal setting, collection of data and information, data analysis, forecasting, decision making, implementation and monitoring. Additionally, special attention is paid…show more content…
Review of available literature shows the predominance of stochastic programming and simulations. Other methods like deterministic linear programming, integer programming, dynamic programming, fuzzy goal programming, and robust optimisation have received less, but growing attention. Finally, techniques like bid-price and price setting methods and expected marginal revenue technique have not been applied widely in the field of hotel revenue management. To some extent the reasons for these results are attributable to the stochastic nature of hotel bookings which requires stochastic programming and simulations. On the other side, the expected marginal revenue technique provides greater simplicity of calculations and is more practically applicable on a daily basis without the need of costly and complex software. However, the aspiration of researchers and practitioners to model the hotel operations and market demand as realistically as possible leads to the construction of more multifarious RM problems that require innovative and more sophisticated approaches to solve…show more content…
In reality, hotel RM practice is far more developed than the hotel RM research literature. To some extend this a result of the hotel companies’ market requirements to stay competitive and constantly improve their marketing activities. Additionally, many issues in RM practice remain proprietary knowledge of hotel chains and software developers, which hinders the theoretical advancement in the field. Current literature review has identified some gaps in the existing research. In view of them, we suggest that future research agenda might focus on several directions: Firstly, hotel RM mathematical problems could be expanded from single-unit to multiple-unit problems. When a hotel chain has several substitutable properties in terms of location, services and category in one destination, it can coordinate the individual properties’ RM practices in order to maximise chain’s revenues as a whole, not the revenues of individual properties. Booking requests for hotels with no availability, for example, can be directed to other chain properties. In this case, the chain’s overbooking policy treats chain hotels as one property, not as single separate units. Although hotel chains and RM software developers actively adopt multiple unit RM strategies, the academic research in the field is severely lagging behind. Secondly, RM theory would benefit significantly, if special
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