Revenue Management in Hospitality: Grand Hyatt Melbourne Hotel

RUNNING HEAD: REVENUE MANAGEMENT 0
REVENUE
MANAGEMENT
GRAND HYATT MELBOURNE HOTEL

REVENUE MANAGEMENT 1
Table of Contents
Introduction......................................................................................................................................2
Revenue management in Hospitality...............................................................................................2
Importance...................................................................................................................................2
Social and ethical issue in revenue management.........................................................................3
Company profile..............................................................................................................................3
Revenue management Analysis.......................................................................................................4
Grand Hyatt Melbourne revenue management tactics.................................................................4
Development through revenue management tactics....................................................................5
Grand Hyatt Melbourne social and ethical issues in revenue management................................5
Recommendations............................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................7
Appendix........................................................................................................................................10

REVENUE MANAGEMENT 2
Introduction
Revenue management is the application of disciplined analytics that forecast the behavior of
consumer at the micro-market levels and optimize product availability and price to
maximize revenue growth (Capocchi, 2018). However, it is an important concept because it
helps in understanding the perception of customers regarding the product value as well as aligns
the prices of the product, availability with the segmentation of consumers. The revenue
management helps in making the decision about what, when, whom and how to sell by
developing effective strategy (Blokdijk, 2015). In this report, the importance of revenue
management in hospitality industry and the strategies used by Grand Hyatt Melbourne Hotel is
discussed. In this recommendation is also provided to the hotel by taking the concern of social
and ethical issues.
Revenue management in Hospitality
Importance
Revenue management is considered significant concept because it helps the owners of hotel in
predicting the demand, needs and requirements of the customers with the use of information and
which is related to the performance (Blokdijk, 2015). It also helps in optimization the pricing as
well as availability; this will result in accomplishing the best financial outcomes. However, for
the owners of hotels it provides the capability and ability to develop more through the use of
perishable inventory of hotel rooms, through this hotel will generates more profits. Revenue
management allows the decision maker to develop the informed choices of data driven rather
than focusing on guesswork (Zatta, 2016). However, hotels need to pay the fixed cost, through
this strategy the hotels can make sure that costs and expenditure are met as well as prices and
services, which is offered by hotel is significantly optimized.
Revenue management also helps in maintaining the balance among general executive, revenue
managers as well as all the hospitality executive because this concept brings all of them together
to make the decision about the flow of revenue management to the managers. However, through
this it helps in taking the competitive advantage as well as aware about the market opportunities
and threats (Hereter, 2017). It also leads in maintaining the good business that is in the hotels

REVENUE MANAGEMENT 3
revenue management helps in attracting the best guest while focusing on maximum occupancy
because bad revenue management result in offering the rooms at lower prices, high commissions
etc.
Social and ethical issue in revenue management
The companies adopt the strategy of revenue management for developing various other strategies
which includes pricing and distribution strategy. However, various social and ethical issues arise
through this strategy which includes issue regarding the pricing of product and services (Zatta,
2016). Various organizations providing the opportunity for the consumers to buy the product
online, so that consumer does not waste time in finding the product according to their needs and
requirements. However, they offer various discounts to the customer, who purchases goods
online which made discrimination among the potential consumers (Mason, 2019). The company
does not lower the prices to the consumers, who purchase the goods from the stores because of
maintaining the sustainability and revenue of the organization. This leads in discrimination of the
prices for managing the revenue in the organization.
In the revenue management the organization also face the ethical issues in the distribution
network; the organizations used the distribution channel from the distributor to the final
consumers as well as from the retail to the target consumer while following the ethical
considerations (Asquer, 2017). However, majority of the organization reduces the price of
distribution for the high inventory, in the hotels the organization rely on the franchisees to
develop the strategy of pricing and distribution. The owner moves to the low prices to gain
higher occupancy, this result in increasing the cost which impacted the revenue of per room
available negatively. Therefore hotel follow an unethical network of distribution, for not
following the ethical framework, structure in daily terms.
Company profile
Grand Hyatt Melbourne is situated in the core of Melbourne's business and shopping region. The
brand was revamped in the year 2011, the lodging are near to the hotel for example, arts, theater,
casino and parks. It gives different visitors rooms to the clients that is up to 547 which
incorporates presidential suite, exclusive, strategic suites and different rooms, for example,
official and studio rooms (Sjoberg, 2016). Hotel sometimes offers the some facilities which