The primary aim of revenue management is selling the right product to the right customer at the right time for the right price and with the right pack. The essence inventory management in hotel pdf this discipline is in understanding customers’ perception of product value and accurately aligning product prices, placement and availability with each customer segment.
Businesses face important decisions regarding what to sell, when to sell, to whom to sell, and for how much. The discipline of revenue management combines data mining and operations research with strategy, understanding of customer behavior, and partnering with the sales force. Today, the revenue management practitioner must be analytical and detail oriented, yet capable of thinking strategically and managing the relationship with sales. Under Crandall’s leadership, American continued to invest in yield management’s forecasting, inventory control and overbooking capabilities.
These fares were non-refundable in addition to being advance-purchase restricted and capacity controlled. The system and analysts engaged in continual re-evaluation of the placement of the discounts to maximize their use. Over the next year, American’s revenue increased 14. Other industries took note of American’s success and implemented similar systems. Marriott International had many of the same issues that airlines did: perishable inventory, customers booking in advance, lower cost competition and wide swings with regard to balancing supply and demand. Since “yield” was an airline term and did not necessarily pertain to hotels, Marriott International and others began calling the practice Revenue Management. They also created “fenced rate” logic similar to airlines, which would allow them to offer targeted discounts to price sensitive market segments based on demand.