Hospitality Operations and Revenue Management

HOSPITALITY OPERATIONS
AND REVENUE MANAGEMENT

Contents
INTRODUCTION...........................................................................................................................1
1. Sources of income or financial contribution from different accommodation service areas1
2. Application of principles of pricing to the room’s product and analysis of potential benefits
................................................................................................................................................2
3. Methods to analyse the optimized profitability in the direction of dynamic growth.........3
4. Code of conducts, rules and legislations subject to best practice affected accommodation
procedures...............................................................................................................................6
5. Effectiveness of quality management in terms of analysing the customer expectation and
meeting their needs.................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Management of revenues within operations has been an utmost requirement in hospitality
operations from past decades (Bodea and Ferguson, 2014). It is considered that adequate
management of revenues helps to increasing reserves for future events as well as forecasting of
revenues of upcoming months. The report covers the sources of financial contribution in
hospitality industry and other revenue generating sectors form the business units. Marriott Hotels
which is one of the reputed hospitality industry is analysed in this report. The pricing policies
and principles elaborated which was used by organisation as an effective practice to enhance
profitability. The profitability optimisation methods are utilised as fixed capacity inventory and
technological development to assess the dynamic growth of organisation. The impact of various
legislations, code of conduct and best practices evaluated upon accommodation procedures. The
quality management process is designed considering the price to analyse how customers’
expectations form diverse markets are fulfilled.
1. Sources of income or financial contribution from different accommodation service areas
The stock of hospitality industry is edible. When an accommodation is vacant for the night,
the chance of earning income by letting it out is lost and cannot be recovered. It's close to a
sector of the airline. For an aircraft which has already taken off, seats could not be resold. Type
of revenue producing services are carried out in hospitality services like room leases, hospitality
sales and conference room rental and so on.
Rooms Revenue and Food and Beverage Revenue: Marriot hotel currently have 729413
licensed, 4735 Contracted rooms and 151 unconsolidated joint ventures with properties of 21196
rooms. Hotel serves different services like spa, garage rental, Wi-Fi, banquet and conference
management and parking facilities. Marriott, often in tandem to hotel growth, uses and licenses
the trademarks for residential property transactions and collects licensing fees for selling of such
marked residential property by others. As per the annual report revenues form rooms, food and
beverage series was recorded as £16,213.55 million (Marriott's Profitability in 2017).
Loyalty Program, Sales and Marketing, and Reservation Systems: Typically, third-
party holders make and sell homes with, if there are any, limited amounts of their investment
capital. Their Ritz-Carlton Reserve, The Ritz-Carlton, W, The Luxury Collection, JW
Marriott, St. Regis, Even, Bulgari, Hilton, Sheraton, Westin, Delta, Four Points and Autograph
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Collection brands including residential property brands were used and approved by the property
(Marriott Annual Report, 2018).
Revenues from Intellectual properties: Marriott operates in a highly competitive market
as labels, products, names, brand names and logos are very important to a promotion of our
properties and services. The brands and other proprietary information are believed to have grown
to represent our buyers, tourists as well as the travel industry with the finest standards of quality,
care, service and cost. It stores and secures and thinks that fits and protects our intellectual
property rights from unauthorized use.
2. Application of principles of pricing to the room’s product and analysis of potential benefits
In the late 1980s, Marriott Hotels was the first one to employ sales optimization. The
business has succeeded in producing great outcomes and developing an effective revenue control
strategy that combines marketing and inventory management actions in individuals, processes
and procedures. Marriott created his own profit system which ultimately concentrated on a "Full
Hotel" plan aimed at improving revenues in all accommodations and commercial areas. In all
hospitality industries, both regional or foreign, that technique is implemented and independently
owned. To implement revenue management in a better way, Marriott has come up with a “Total
Hotel” strategy which was formulated to increase the revenues and profits across all its
properties. Total Hotel offers a unified database for all properties, gives training to employees
based on one program, helps to forecast in a better way about the market situations and is fully
integrated by a reservation system which is common across all the properties of the hotel.
Marriott focusses on offering best product at the right price with the accurate timing to the target
consumer. Some basic principles used by Marriott for pricing used internationally are:
Rational method to Pricing: Hotel set prices based on the value or benefit the customer is
getting and how the value perceived by them (Marriott Business Conduct Guide, 2013). This
pricing reflects the prices which are appealing to the customers and they should feel the worth of
the price they are paying to the hotel.
 Single image inventory: This means whatever channel is used by the customer to book a
room in a hotel, he/she will get the same price at that time for that single accommodation
through all the channels. The technology supports thin kind of feature to the guests.
 Appropriate discount rates: This means that the hotel keeps on providing discounts on
a periodic basis to the guests either for the advanced bookings, bulk bookings, seasonal
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