Hotel Revenue Management Strategy – Impacts and Consequences of Changes in Management

Revenue Management (RM) is a set of practices for businesses to improve their revenue generation tactics and strategies. RM originated in airlines and spread to the hotel industry as a successful set of tools. This case study focuses on a contemporary study of hotel RM, namely the implementation of RM strategies. Using a fictional scenario, the case study examines different RM strategies and guides readers to distinguish each strategy’s characteristics. Furthermore, the case study leads readers to question and research the potential impacts and consequences of implementing RM strategies. To contextualise the case study, readers will get access to data from Smith Travel Research (STR), presented for the Wollongong market. The case study follows Alec Weiss as the owner of the Landorn Hotel Wollongong, and his dilemma facing the choice of RM strategy for his hotel. For the past 5 years, the revenues of the Landorn Hotel have been decreasing steadily, consequently affecting the profits. Landorn International is a multinational hotel company that has been managing Alec’s property for the past 5 years. Their contract is due to expire in 2020 and Alec is wondering whether to renew it or change the hotel management, and therefore its RM strategy.