Revenue Management Cycle

Question 1

Revenue Management Cycle

Answer 1

• Forecasting demand
• Optimizing demand
• Controlling demand
• Monitoring demand

Question 2

Optimizing Rate Mix

Answer 2

Optimizing demand is the brain of any revenue management system, automated or manual.

Question 3

Expected Marginal Revenue (EMR) curve

Answer 3

A phenomenon that economists have established as when the available capacity increases, the marginal expected revenue from each additional room declines. The “opportunity cost” approach in revenue management starts at the right side of the curve and selling discounted rooms till you reach the point of indifference at which point discounted rooms are no longer available.

Question 4

Controlling Demand

Answer 4

Uses strategic and tactical restriction controls on transient business.

Question 5

Monitoring Demand

Answer 5

The stage of the Revenue Management Cycle when you look at what is happening and compare it to what you expected to happen based on your forecasts.

Question 6

Questions to Ask when Choosing a Revenue Management Solution

Answer 6

• Do we need a “decision” system or a “recommendation” system?
• How much time do I want my team to have to spend to make the solution effective?
• How will the solution affect my current business practices?
• What “return on investment” requirement do I have?
• How will the solution fit into the existing culture?
• Will I get more from the system than just forecasts and decisions?