Rooms Divisions Department - Occupancy and Room Revenue Assignment - 3

Rooms Divisions Department - Occupancy and Room Revenue - Assignment Example Revenue or yield management is a very crucial aspect of any hospitality business. Revenue management is defined by Cross as the application of disciplined analytics so as to predict the behavior of the micro-market, as well as optimizing the availability of products and services, along with price in order to maximize revenue growth. The major aim of revenue/yield management is to sell the right product to the right customer, for the right price, at the right time, and with the right pack. Mauri points out that yield management utilizes data-driven tactics along with a strategy to make decisions on when to sell, what to sell, whom to sell and at how much so as to increase revenue. Yield management also increases the revenue using the demand forecast-technique that is used to establish if room rates need to increase or lower. Basing on the economics of demand and supply, when the supply is low and demand is high, the room prices are increased. On the other hand, when the supply is high, and demand is low, the room prices are reduced. There are various techniques that a hotel’s room division staff may use to promote and maximize revenue. These strategies are based on pricing, inventory, and channels, as well as marketing. First, revenue generation can be maximized by selecting the best blends of predicted demand for the existing prices. The use of sophisticated technology and optimization algorithms needs to be geared towards selling the right quantities of inventory at the right price. Another technique is through the creation of a more dynamic and targeted pricing in the form of promotions and pricing in order to more accurately match demand and supply.