Principles of Revenue Management- Doc

004 The hospitality Business
Toolkit

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P. 1 Rationale and principles of revenue management...............................................................3
P. 2 Revenue management tools to generate and maximise profit............................................3
M. 1 Impact of differentiated pricing strategies on revenue management in a specific sector...4
D. 1 Critically analyse the principles of revenue management...................................................4
LO 2.................................................................................................................................................4
P. 3 Different stages of the HR life cycle....................................................................................4
P. 4 Development of a performance management plan for a specific travel and tourism job
role...............................................................................................................................................5
M. 2 Evaluate the importance of the HR life cycle in relation to strategic talent management..5
D. 2 Effective recommendations and judgement to improve HR processes and documents......5
LO 3.................................................................................................................................................5
P. 5 Specific legislation to which travel and tourism industry must adhere...............................5
P. 6 Impact of employment and contract law in business decision-making...............................6
M. 3 Examine the potential implications of legislation, regulations and standards....................6
D. 3 Critical examination of potential implications of legislation, regulations, ethical
principles and standards..............................................................................................................7
LO 4.................................................................................................................................................7
P. 7 Different types of financial statements and reporting mechanism......................................7
P. 8 Importance and value of budgets.........................................................................................7
M. 4. Interpretation of financial statements and reports.............................................................8
D. 4. Evaluation of business performance based on financial statements and reports................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
This study will highlight, core principles of the revenue management in travel and
tourism industry. It study will also establish the fact on assessing and managing Human
Resources life cycle. Furthermore, this study will help in effectively identify the impact of
various legislations and laws for effectively retaining and developing human talent into the
organization for effective decision making. This study will also examine various types of
financial statements and reports which helps in identifying variances and controlling business
performance.
Tourism Union International (TUI ) group is one of the largest travel and tourism
company across the world. It mainly deals in leisure resorts, hotels, airlines, cruise lines, holiday
packages and charter.
LO 1
P. 1 Rationale and principles of revenue management.
Revenue management is an effective application which helps in effectively understanding
the behaviour of the consumers to optimize the availability of the products which eventually
leads to maximizing the revenue growth (Board and Skrzypacz, 2016). It helps travel and
tourism industry in improving the occupancy of the business which helps in yielding higher
profits. Revenue management helps in analysing current data, market analysis, segmentation,
yield management, revenue performance forecasting, KPI tracking, demand forecasting, dynamic
pricing, competitor analysis and customer behaviour analysis. Revenue management helps in
managing over staffing and effectively optimizing the manpower of the organization to attain
higher results and outcomes.
P. 2 Revenue management tools to generate and maximise profit.
Property management system: Revenue management tool mainly focuses on four critical
tools which helps in property management system by making workforce easier by effectively
adapting to various technologies to reach higher goals and objectives which leads to higher
attainment of performance, productivity and profitability (Kimes and Wirtz, 2016).
Booking engine: Integration of new and advanced technology into the organization
focuses on integrating new advanced communication and information technology for processing
payments online, easy booking, surfing of room availability and holiday packages, reservations,

online prices, real time update, etc. which helps in higher operational efficiency, productivity and
profitability for TUI group.
Rate shopper: It is an effective tool which helps in evaluating the prices of competitors
on a real time basis. It leads to higher sales, managing competition by integrating effective
revenue management strategies.
M. 1 Impact of differentiated pricing strategies on revenue management in a specific sector.
Differentiated pricing strategies means an effective process of charging different cost to
different customers. This strategy is also referred to as price discrimination or price
differentiation. revenue management. It helps in increasing in overall sales, expand target
audience and build customer loyalty which leads to long term sustainable growth of the business
and higher revenue and profit.
D. 1 Critically analyse the principles of revenue management.
(Abrate and Viglia, 2016)established the fact that, revenue management helps in
managing various customer segments by critically evaluating the market segment to increase the
productivity.(Kimes and Wirtz, 2016) investigated that, revenue management helps in dynamic
pricing, competitor analysis and customer behaviour analysis which leads to higher revenue
growth and profitability for the company.
LO 2
P. 3 Different stages of the HR life cycle.
The Human Resource life cycle comprises of different stages between the employees and
the management of the organization-
 Recruiting and On-boarding- This stage include the role of HR department in relation
to the recruitment and selection of the candidates in order to provide the workforce
stability in an organization. It includes activities such as placing job ads, selecting the
candidates , conducting interviews etc.
 Orientation and Career planning- At this stage the employees that are newly selected
are been guided regarding the policies and procedures as well as mission an objectives of
the company and career planning involves guiding the employees for their long term
career goals with the company(Talias, 2016).
 Termination or Transition- The employees will not be a permanent asset for the
company as some will leave the company after the retirement and some will simply lay

off as they get the opportunities. The role of HR manager here is to execute the
systematic procedure of the termination is being followed and conduct exit interviews as
per the company's policy.
P. 4 Development of a performance management plan for a specific travel and tourism job role.
The performance development plan is a tool which is used by the company in order to
improve the performance of the employees (Yulianto, Ahmadi and Asteria, 2018). The steps of
the plan are as follows-
Plan- the first step is to plan that how the performance of the employees can be improved
by using which techniques and tools.
Act- after making the plan the next step is to act according to the plan made by the
manager.
Track- the next step is to track that whether the planned tools and techniques are applied
in accordance or not.
Review- it is the last step in the performance management plan. This step makes sure that
what the manager has planned is acted in accordance with the same. And if that is not in
accordance then they have to take corrective measures.
M. 2 Evaluate the importance of the HR life cycle in relation to strategic talent management.
The HR life cycle is important in relation to the talent management because of the reason
that the HR cycle ensures that at which stage the employees are working and how they have to
develop their skills and traits so that they can go to next stage in the HR cycle.
D. 2 Effective recommendations and judgement to improve HR processes and documents.
Some of the recommendations are by creating employees development plans, timely
update the job description according to the change going on in the market, improvising the
performance evaluation process and many other practices be used.
LO 3
P. 5 Specific legislation to which travel and tourism industry must adhere.
There are number of legislations and regulations that must be considered by TUI in order
to perform its business activities without any complications. The company needs to follow and
adhere one legislation that is mainly important-
Package Travel, Package Holidays and Package Tours regulations 1992- This
regulation ensures that all the Tours and Travel companies must offer the package holidays as

subject to the rules and policies of Package. This legislation set the responsibilities on Tour
operator company for their customers and also ensures the rights of the customers against the
companies if these regulations are breached. Thus, TUI group must consider these regulations
while designing and offerring the holiday packages to the customers(Hall and et.al., 2015).
P. 6 Impact of employment and contract law in business decision-making.
Impact of employment law in business decision making- The employment and Labour
Law in UK creates various impacts on decision making of Tourism industries. As such the law
states that the employees must be allowed as 28 days of total paid leaves during the year. TUI
group has to follow the same guideline as per the law and execute the same. The company has to
pay its employees even after not receiving the service from employees, this in turn affects their
decision making as loss of revenue along with the loss of productivity over a period of time.
Also, The minimum wages act implies the TUI group to pay the minimum wages to the workers
for their service even aftUI group has to follow and maintain as per the agreement. It affects the
company's decision making regarding several laws for intellectual property rights as well as the
anti-competitive services in different regions. The company has to consider these factors while
initiating its activities for maintaining the terms of the contract. er not earning a desired surplus.
Impact of contract law in business decision making- As in UK, a contract is termed to
be an agreement enacted by law. The contract comprises of various terms and conditions of the
business that TUI group has to follow and maintain as per the agreement. It affects the
company's decision making regarding several laws for intellectual property rights as well as the
anti-competitive services in different regions. The company has to consider these factors while
initiating its activities for maintaining the terms of the contract.
M. 3 Examine the potential implications of legislation, regulations and standards.
The following are different legislation, regulations and standards in Tourism sector
business-
 Development Of Tourism Act 1969- The main objective for this act was to enhance the
Tourism business in UK and Great Britain and providing assistance to the Tourism
business companies to expand its business.
 Disability Discrimination Act (DDA)- This act aims at ending the discrimination among
the people with disabilities and enforce the travel companies to promote the opportunities

to these people so that they can roam and travel. The act has also made the government to
reduce the standards and regulations from the tourism companies.
D. 3 Critical examination of potential implications of legislation, regulations, ethical principles
and standards.
Jenkins and et.al., (2015) states that the legislations imposed are mostly in the favour of
tourism companies and helped the Tourism business to grow and expand in several markets. The
Development of Tourism Act 1969 provides the financial assistance to the tourism companies in
UK and also promotes the tourism activities to grow its business. On the other hand Jamal and
Camargo (2018) argues that various regulations related to the Package holidays have created
complications for the Tourism business as it restrains the companies to design the package as per
their policy and make them produce it as per the government rules, which affect their business in
several ways.
LO 4
P. 7 Different types of financial statements and reporting mechanism.
There are many types of financial statements used by the companies in assessing and
evaluating their financial status. These statements are as follows-
Profit and loss account- it is a statement or an account which helps the company in
assessing and calculating the profit or the loss incurred by the company during a financial period.
It is calculated by totalling all the incomes and expenses for the year and then subtracting the
total expenses from the total income (Traina, 2018).
Balance sheet- it is a statement which helps the company in evaluating its assets and the
liabilities for the whole financial year. It includes all the current assets and current liabilities
along with the non current assets and non current liabilities.
Cash flow statement- it is a statement which is used by the company in getting the
information relating to the cash used or spend within the business. The cash flow statement
records all the cash inflows and the cash outflows during the whole financial year incurred by the
business during the whole financial year.
P. 8 Importance and value of budgets.
The budget refers to the planning in advance for all the expected incomes and the
expenses which are going to happen in the near future. It may also be defined as planning in

advance relating to all the incomes and the expenses which may or may not incur in the future.
The budgets are important because of the following reasons-
the main reason is that it helps in properly and optimally allocating the scarce resources because
it helps the company in allocating the funds to those areas where it is more necessary.
Another reason is that it helps in reaching to the ultimate objective because the budget helps in
prioritizing the spending which needs to be done first.
M. 4. Interpretation of financial statements and reports.
The interpretation of the financial statements and reports is very necessary in order to
assess the financial information of the company. This interpretation helps the company in
knowing the profit or loss incurred and the total assets and liabilities and also the net cash flows
for a financial year. Also the interpretation of financial statements helps the company in
comparing itself with the competitors (Tinkelman and Fan, 2018).
D. 4. Evaluation of business performance based on financial statements and reports.
On the basis of the financial statements and the reports the business performance is
evaluated. This is because of the reason that the business performance can be assessed only by
the profit or the loss incurred. If the company earns profits then it means the business
performance is good and vice versa in case of loss.
CONCLUSION
From the above study it has been summarized that revenue management is very necessary
for the business to be very successful. Further it outlined the revenue management tools. Further
it discussed about the different stages of HR life cycle along with the steps in the development of
the performance management plan. Furthermore it highlighted some of the specific legislations
which must be followed by the tourism industry along with the impact of the impact of the
contract and employment law on the decision making. At last the report demonstrated some of
the different types of financial statements and their importance.

REFERENCES
Books and journals
Abrate, G. and Viglia, G., 2016. Strategic and tactical price decisions in hotel revenue
management. Tourism Management. 55. pp.123-132.
Board, S. and Skrzypacz, A., 2016. Revenue management with forward-looking buyers. Journal
of Political Economy. 124(4). pp.1046-1087.
Hall and et.al., 2015. The Routledge handbook of tourism and sustainability. Routledge.
Jamal, T. and Camargo, B.A., 2018. Tourism governance and policy: Whither justice?. Tourism
management perspectives. 25. pp.205-208.
Jenkins and et.al., 2015. Sustainable tourism legislation and regulation. The Routledge
Handbook of Tourism and Sustainability. p.234.
Kimes, S.E. and Wirtz, J., 2016. Revenue management in restaurants: Unbundling pricing for
reservations from the core service.
Talias, M., 2016. Voluntary hotel regulation as a political compromise. International Journal of
Hospitality Management. 56. pp.10-17.
Tinkelman, D. and Fan, X., 2018. What Weekly Sparklines Could Add to Financial
Statements. Journal of Corporate Accounting & Finance. 29(1). pp.46-52.
Traina, J., 2018. Is aggregate market power increasing? production trends using financial
statements. Production Trends Using Financial Statements (February 8, 2018).
Yulianto, B., Ahmadi, A. and Asteria, P.V., 2018, January. Development of short Indonesian
lesson plan to improve teacher performance. In IOP Conference Series: Materials
Science and Engineering (Vol. 296, No. 1, p. 012001). IOP Publishing.