Revenue Management HAT301A: Hotel Strategies and Market Analysis

This report delves into the revenue management strategies employed by hotels, using Sydney as a case study. It compares Bli Bli House Riverside Retreat with Rumba Beach Resort, analyzing their competitive advantages, book value, and occupancy forecasts. The report examines the factors influencing customer preference, target market identification, and revenue management techniques to address varying demand scenarios. The analysis includes strategies for both slower and higher than anticipated demand, emphasizing the importance of rate minimization, discounts, modern amenities, and digital marketing to optimize revenue generation and customer satisfaction. The study concludes by highlighting the need for continuous monitoring and adaptation of financial plans to ensure sustained success in the competitive hospitality market.

Running head: REVENUE MANAGEMENT
REVENUE MANAGEMENT
Name of the Student
Name of the University
Author Notes

1
REVENUE MANAGEMENT
1. Answer to Question 1
The city which has been chosen in this example is Sydney, one of the major cities and
tourist hubs of Australia in the recent times. The city has been chosen in the example as it is
one of the booming tourist destinations in the recent times and has experienced a considerable
increase in the number of tourists coming to the country from the various parts of the world
including the developing nations of China and India (Hu, Blakely & Zhou, 2013). The
country has seen an increased amount of air traffic from the various countries of the world
and the increase rate has been consistent to cross over 5% in the overall market of tourism
(Hu, 2012). The city is one of the best developed city in the world and is the most flourishing
city in the continent of Oceania with a huge native as well as foreign population base. The
revenue and the financial state of the city is one of the most distinguished in the market
which makes it one of the major tourist attractions on a global platform both in terms of
finance and tourism revenue (Griffit & Hayllar, 2014). The city has been an explicit revenue
to the government in terms of tourism making it one of the best examples suited in the
example.
2. Answer to Question 2
The main hotel that is being chosen is Bli Bli House Riverside Retreat while the
competitor hotel that is being chosen for the comparison is Rumba Beach Resort. Both the
two resorts mentioned in the example are high-end 5 star resorts that are one of the major
tourist attractions of the country. Both have their own set of facilities for their guests and
tourists that range from the fully decorated spa rooms to the exclusive suits that are there for
the utmost comfort of their guests and travellers. Both provide utmost luxury to their guests
and be the ultimate hosts with their line of rooms and suits that provide utmost exclusivity to
the people staying there. Both the hotels provide a luxury experience to their clients like

2
REVENUE MANAGEMENT
giving them the opportunity to indulge in some of the most exquisite experiences offered and
also to give them the required amount of services that can make them the regular visitors of
the hotel. Both the 5 star properties are exclusive in their own rights and have their own ways
to provide their customers and guests with the best of their capabilities. Bli Bli House
Riverside Retreat is a boutique hotel with an old world charm clubbed into the modern
amenities which has its own set of clients ("Bli Bli House Riverside Retreat | Luxury
Accommodation, Sunshine Coast", 2018). Rumba Beach Resort is a modern resort having
their own set of customers, both of them have enough in common in terms of monetary and
the type of occupancy to be considered as competitors in the example ("Rumba Beach Resort
- Caloundra Holiday Accommodation", 2018).
3. Answer to Question 3
Book Value of a property is defined as the price of the assets owned by the company
subtracted by its liabilities. Expanding the concept, it can be said that book value is the
amount of money that a particular shareholder of a company will receive if the company
winds up their business due to certain reasons after solving the liabilities and putting forward
the assets (Penman & Reggiani, 2013). After doing the required in the calculation process of
the Bli Bli House Riverside Retreat, it has been found that the book figure of the said hotel is
225$ which is way lesser than the original market value of the hotel. The book figures have
been decided by calculating the assets owned by the hotel and the liabilities it has upon itself
and thereafter subtracting the same from the assets amount.
Occupancy forecast is defined as the number of rooms that has been occupied or pre-
booked by the guests at a particular time in a particular hotel (Pan & Yang, 2017). The
occupancy rate of Bli Bli House Riverside Retreat has been calculated by taking into account
the total number of rooms that the hotel has and the number of rooms that have been

3
REVENUE MANAGEMENT
occupied or pre-booked by the guests. The number is then calculated on the basis of the days
and is seen that weekends have a better occupancy rates than weekdays. In addition, the price
of the room per night is also considered while deciding on the occupancy rate as with the less
price per night, there is a possibility that more number of rooms will be occupied by the
guests (Lehtomaki, Vuohtoniemi & Umebayashi, 2013).
4. Answer to Question 4
In the market where the competitor consideration is very high, the Bli Bli House
Riverside Retreat Hotel provided in the example case study will perform fairly well in the
business when compared to the major competitor, Rumba Beach Resort. Both of them have a
lot in common and both of them have the same kind of guest category wanting the same kind
of features and amenities from a high end hotel (Cooper & Lemckert, 2012). However, the
Bli Bli House has all of the facilities provided to the guests at a cheaper cost than the Rumba
Beach Resort which is seen in the table stating the price of both the hotels in AUD from 4th
June to 24th June. The date includes weekdays, weekends in one of the most popular seasons
of Australian summers. The Bli Bli House has more or less fixed rates for the different days
of the week with the highest on Sundays and the lowest in the span of Tuesday to Thursday
while for the case of Rumba Beach resort, the rate fluctuates with no particular order making
the guests prefer Bli Bli House more as they have a better idea about the rates and the
facilities provided (Patiar, 2016).
5. Answer to Question 5
Target market is defined as the part of the market and the consumers that the
particular product or service specifies for being their potential customers and clients. The
target market of different companies varies differently and so there is a specific target
audience and market for every kind of product and service stated (Cheng, 2013). The target

4
REVENUE MANAGEMENT
market for the Bli Bli House is the higher sections of the foreign tourists who would want to
splurge for a luxury living in their holiday time. They will be the kind of customers who
prefer the touch of heritage and luxury and can pay a huge amount of money for that purpose
(Hsu, Oh & Assaf, 2012).
6. Answer to Question 5.1
When the demand of the hotel is slower than anticipated, there will be an initial tensed
reaction coupled by the need to make the hotel popular in the market thereby increasing the
demand in the course of the time. The demand of the hotel in the market can be increased by
implementing some revenue management measures in the process. Minimisation of rates and
giving considerable discounts and offers to the loyal customers is one of the primary
measures that can be implemented to make sure that the customers of the hotels are getting
attracted towards it (Ivanov, 2014). Introduction of some of the modern amenities can be
done to attract and providing the same with a lower rate than the competitors will surely
make the hotel more prone to customer demands. The generation of good online reviews and
to focus the hotel as being one of the best revenue earning platforms can also create an
illusion in the minds of the tourists making the hotel more prone to tourist attraction and
getting greater revenue from the tourism (Ivanov, 2014). The other revenue management
techniques that can be implemented for making the number of tourists more in the hotel is the
introduction of different types of digital marketing strategies for making the place more prone
to getting tourists and clients of their own value.
7. Answer to Question 5.2
If the demand of the hotel is higher than expected, then the initial reaction of the
managers and the owners will be happiness followed by a satisfaction that their efforts in
attracting the tourists and clients into their hotel has been successful. The revenue

5
REVENUE MANAGEMENT
management techniques that has to implement to keep the situation same in the case is to
make sure that the authorities of the hotel implement the same measures in their future and do
not change their perspectives in terms of business. In addition, the marketing techniques
adhered by the people of the hotel should be the same and improved under certain conditions
implemented. Also, the price of the hotel and the discounts given can be decreased and
increased in accordance to the need and the demands of the customer at different times of the
year (Ivanov, 2014). The financial plan of the hotel should be made on a prior basis expecting
a certain amount of inflow of guests at a particular time of the year which can help to
maintain and guess the amount of revenue that is to be generated in the due course of time.
The revenue of the hotel is to be anticipated in the course of time and taken appropriate
measures related to financial planning wherever needed.

6
REVENUE MANAGEMENT
Reference
Bli Bli House Riverside Retreat | Luxury Accommodation, Sunshine Coast. (2018). Retrieved
from https://bliblihouse.com.au/
Cheng, D. S. (2013). Analyze the hotel industry in porter five competitive forces. Journal of
Global Business Management, 9(3), 52.
Cooper, J. A. G., & Lemckert, C. (2012). Extreme sea-level rise and adaptation options for
coastal resort cities: A qualitative assessment from the Gold Coast, Australia. Ocean
& coastal management, 64, 1-14.
GRIFFIN, T., & HAYLLAR, B. (2014). Sydney: Beyond iconicity. In World Tourism
Cities (pp. 123-147). Routledge.
Hsu, C. H., Oh, H., & Assaf, A. G. (2012). A customer-based brand equity model for upscale
hotels. Journal of Travel Research, 51(1), 81-93.
Hu, R. (2012). Shaping a global Sydney: the City of Sydney's planning transformation in the
1980s and 1990s. Planning Perspectives, 27(3), 347-368.
Hu, R., Blakely, E. J., & Zhou, Y. (2013). Benchmarking the competitiveness of Australian
global cities: Sydney and Melbourne in the global context. Urban Policy and
Research, 31(4), 435-452.
Ivanov, S. (2014). Hotel revenue management: From theory to practice. Zangador.
Lehtomaki, J. J., Vuohtoniemi, R., & Umebayashi, K. (2013). On the measurement of duty
cycle and channel occupancy rate. IEEE Journal on Selected Areas in
Communications, 31(11), 2555-2565.

7
REVENUE MANAGEMENT
Pan, B., & Yang, Y. (2017). Forecasting destination weekly hotel occupancy with big
data. Journal of Travel Research, 56(7), 957-970.
Patiar, A. (2016). Costs allocation practices: Evidence of hotels in Australia. Journal of
Hospitality and Tourism Management, 26, 1-8.
Penman, S., & Reggiani, F. (2013). Returns to buying earnings and book value: Accounting
for growth and risk. Review of Accounting Studies, 18(4), 1021-1049.
Rumba Beach Resort - Caloundra Holiday Accommodation. (2018). Retrieved from
https://www.rumbaresort.com.au/