Revenue Management

Style of assessment: Report style
Max. Word Limit: 2000 words.
Excluding calculations for part 2.1, which is not included in the total word count.
Submission: Your written report will be submitted via L@G through the assessment submission link.
Marking: Your assignment is assessed based on understanding of key concepts and its applications in the context of each part.
Hurdle Statement All students are required to complete the electronic coversheet as well as participate with equal efforts in this task.
Academic Integrity Be aware that the lack of the coversheet submission leads to a deduction of 5% of the total report mark per day.
About the Task All tasks are based on the fundamental, theoretical and conceptional learning in this course.

You will work on a major project of preparing an analysis and assessment of the revenue management practice established by an allocated hotel.
Hint ⦁ Show the workings for part 2.1.
⦁ Use appropriate referencing of primary resources, where possible.
Important Note – Extensions:
If you have compelling circumstances you will need to apply for an extension by emailing me with valid reasons and documentation before the due date.
Important Note – Late Submissions:
As per university policy for late assignment without prior approval:
– 10% (i.e. 1.5 marks) for every 24 hours that the assignment is late (not including weekends).
– A 100% penalty applies after 5 working days.
Formatting of word document.
Format: Times New Romans
Line Spacing: 1.5
Margins: 1cm (left)
3 cm (right)
2.5 (top and bottom)
Reference style: APA
Task Description
Revenue Management strategies include a wide range of opportunities to increase revenue in all the departments of the hotel and different tourism organisations. The business can utilise the different strategies and tactics to maximise and optimise revenues; however, not all can be used at the same time. Some of the concepts of the RM practices relate to pricing, inventory, marketing and distribution channels.
Your task is to identify the current industry trends conducive to a successful implementation of revenue management strategies and tactics in the global and Australian hotel and tourism industry. From the macro-perspective, it is crucial to include these opportunities and threats into effective revenue management practices for the individual business and property level. Hence, you are required to analyse and assess the RM performance of a specific property based on the theoretical concepts discussed in class and your observation from the publicly available information of the group and property level.
Everyone in your group can chose one of the cases listed underneath. Every group member must discuss a different business but which one you chose is left to your group communication. Please ensure to contact me in case of any changes you may agreed on in your group.
Tourism & Hotel Cases:
Case 1 Brisbane W Brisbane
Case 2 Gold Coast QT
Case 3 Launceston Peppers Silo
(part of Mantra)
Case 4 Multiple destinations The Ghan
Case 5 Multiple destinations Qantas Airline

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⦁ Revenue Management
⦁ Discuss reasons and the purpose of establishing an effective Revenue Management system in the hotel and tourism industry.

⦁ Identify current trends within the wider industry, which may pose opportunities and/or threats to the revenue growth and management within the whole industry.

⦁ Comment on the following statement: “The best way to access customers for all accommodation properties is to sell room inventory through the property’s own website and avoid OTAs”. Ensure to incorporate RM related concepts to support your argument.

⦁ Broader Business Analysis
⦁ Group Level Analysis:
⦁ Relative performance evaluation:
Hotel (Case 1-3): Use the STR data and the hotel’s group data provided in the Appendix to assess the whole hotel group’s current, relative RM performance in the market and national comparison. Calculate the market penetration index and comment on the hotel group’s comparative performance.
Case 4 & 5: Identify performance metrics, e.g. passenger load factor, which could assist the business to evaluate the effectiveness of its established revenue management strategies and tactics.

⦁ Are there any issues with using the national and market average performance data or the group data for a valid comparison with the competitive set?

2.2 Property & Trip Level Analysis
⦁ As revenue management varies by the property/product and other characteristics, identify the following information of your property/ trip as starting point of your revenue management analysis, and outline the different revenue-generating departments.
Full capacity rooms/seats Under 100, 100-250, 251 – 500 , over 500
Branded or independent
Service type Full-service, limited-service, convention/ conference, Resort
Location City center, smaller center, Suburban, Airport
Web site

⦁ Discuss, whether the regional area/ type of experience of your hotel/trip is undergoing significant trend changes regarding the MLoS, change in market segments, arrivals from specific countries and new supply of accommodation and other close substitutes.

During the analysis it was felt that the hotel has included many pricing strategies and tactics across departments. Using the publicly available and accessible information, analyse, assess and evaluate the business specific revenue management strategies and tactics established in the operations.

⦁ Identify the foundation of the RM strategy implementation of your property/ trip chosen.
⦁ Review market segment mix, as well as seasonal changes.
⦁ Assess the pricing position in the immediate competitive environment (1 -2 competitors for comparison purposes is sufficient).

⦁ Assess the RM strategies and tools, the business applied to its product inventory, services, trading periods and market segments based on your observations through the group and property website, and other booking sites. Ensure to relate your observations to the underlying theoretical concepts.
Analyse main aspects of the RM decision-making framework the revenue managers of your property considered when implementing strategic and tactical revenue management practices:
⦁ Product-related Pricing Structure/Tools
⦁ Inventory Control/Management Strategies related to different product versions
⦁ Distribution Channel Strategies
⦁ Global distribution systems
⦁ Proprietary website/ direct channel (Promotions)
⦁ Third party channel management
⦁ Non-room related services and packages
⦁ Ensure to address the existing loyalty programs and their role in the RM strategy.
⦁ To assist you in unveiling some of the underlying tactics, the analysis of the booking strategies around future major events within the coming year assists your endeavour. Examples could be around national holidays, such as Australia day, Christmas, Easter, ANZAC day, Queen’s birthday , New Year’s Eve; or reginal events, such as Grand Finale Friday and Melbourne Cup, Sydney Festival and Mardigras, Great Barrier Reef Master Games and Cairns Show.
⦁ Conclusion:
⦁ If you assumed the regional penetration indices/ or other revenue management performance measures applied to your product, evaluate the effectiveness of the current RM strategy and identify potential recommendation for improvements.
App. 1 STR National and Market Data
Dec 2017
(Rolling annual) Occupancy Average daily rate (ADR) Revenue per available room (RevPAR)
(national wide) 75.3%
$ 189
$ 142
Brisbane 71.4%
-2.8% $ 156
-0.7% $ 111
Hobart/Launceston 80.3%
+0.3% $ 180
+2.4% $145.00
Source: CBRE Research, STR, Q4 2017
NOTE: Due to reason of comparison of the STR data to the annual reports, you need to convert the company data (denominated in $US) into AUD using the following exchange rate (AUD/USD close:0.69).

App. 2 Hotel Group Operational Measures (denominated in US$)
Case 1: Marriott International Hotels Group (in US$) (AR 2017)
Requires conversion AUD/USD close:0.69

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