Hospitality Operations and Revenue Management at the Savoy Hotel

This report delves into the hospitality operations and revenue management practices of The Savoy Hotel in London, UK. It examines the financial contributions of various revenue centers, focusing on the rooms and food and beverage divisions. The report explores the application of pricing principles, evaluating their benefits for the hotel and analyzing the impact of competitive strategies. It assesses methods for optimizing profitability, particularly within a fixed capacity inventory context, while acknowledging technological developments. The report also addresses industry codes of conduct, relevant legislation, and best practices that influence accommodation procedures. Furthermore, it identifies customer expectations across diverse markets and analyzes how The Savoy Hotel meets these needs through effective quality management processes. The report concludes with an overview of the key findings and implications for revenue management in the hospitality sector.

Hospitality Operations and Revenue Management

Abstract
In the hotel industry, revenue management is considered essential and this report has included
the analysis of revenue management and operations for the profitability and competitive
advantages. The pricing principles are applied for the success of the organization. The various
approaches are adopted by the organization which helps in determining the cost of the room and
services. In order to optimize the profitability, the methods are evaluated in the report which is
applied for fixed capacity inventory and technological developments. The legislation and
practices are discussed in the report which directly impact on the procedures of accommodation.
In diverse market , the expectation of different customer are identified and accommodation
services are analysed for meeting the needs.

Contents
Introduction.................................................................................................................................................3
Financial contribution..................................................................................................................................3
Pricing principles and its benefits for the Savoy hotel.................................................................................5
Application of methods for optimizing the profitability..............................................................................6
Code of conduct, legislation, and practices..................................................................................................7
Customer expectations.................................................................................................................................8
Conclusion...................................................................................................................................................9
Reference..................................................................................................................................................11

Introduction
Hospitality operations and revenue management are essential for generating profits and revenues.
This report includes the operations and management of The Savoy Hotel in London, UK. This
hotel is a luxurious hotel and it provides the premium quality services for retaining the clients. In
hospitality, revenue management plays an essential role in the profitability and effective growth.
It is essential for providing the food and accommodation services as it help in analyzing the
actual performance and planning for the operations. This report includes the relationship between
revenue management and hospitality operations of The Savoy hotel. In the hospitality industry,
sustainability is considered important for the development and operations which includes the
impact of environment, economic and social. The Savoy hotel is one of the largest well-known
hotels in the UK which provides luxury services by providing facilities of food and
accommodation. This report includes the process of financial contribution in order to manage the
revenue of rooms and capacity of fixed inventory for the development of technology for
improving the quality services. It includes the practices of legislation which impact on the
services of hotels and customer satisfaction values for quality management. This report will help
in understanding the revenue management in the hotel industry.
Financial contribution
In order to generate income, revenue centers are required to be included for selling the products
and services. It is analyzed that the main revenue centers are the rooms divisions and food and
beverages division. The contribution is considered as the concept of accounting which is used for
the profit of the business. It helps in analyzing the capacity of earning profits and liquidity
position of the business which helps the business in generating ideas for improving and
providing better service quality. Financial contribution is considered an approach that helps in
gaining profits and helps in preparing different strategies. It includes the tools of funding and
funding management for development and innovations. It is analyzed that in the Savoy hotel the
effective profitability helps in achieving the long term profitability and competitive advantages.
It is evaluated that inventory issues are faced at the workplace which affects the facilities like
accommodation, food and dealing with customers (Aernoe, et al., 2015). It impacts the costs and

determination of the products of pricing by savoy for providing the services to customers which
are related to the luxury and rooms. The financial performance of the Savoy hotel helps in
making the position in the market. It helps in evaluating the financial position which is effective
for creating innovative products. With the help of implementing innovative techniques and
efforts, the organization is able to provide the services to customers. To achieve the optimum
utilization of inventory and resources in an organization, it is important for the organization to
analyze the operation factors. In the organization, the slow-down in net income is because of an
imbalance entity that affects the operations of the business. In Savoy hotel, the focus is on a
number of rooms which are approx. 270 in London, UK (Aziz, et al., 2011). It is analyzed that
finance is crucial for producing and manufacturing services like accommodation, food and
customers’ requirements. In order to face the competition for making the competitive strategies
and profitability will help in making the position in the market. In order to provide the services
of accommodation, revenue management is essential for effective luxury services which are
effective with the help of finance in order to improve the economic position of the business. It is
analyzed that sufficient funds are required for proper growth and providing better quality
services. In order to create innovation, finance is required to be generated from different sources.
Financial contribution helps in producing the room's revenue which is presented in the different
forms and sources (Zang and Weatherford, 2016). The allocation of funds is considered as the
key element for the optimum utilization of resources and funding which affects the management
of inventory. It helps in increasing the profits earning capacity in the Savoy with the help of
room facilities like laundry, telephone, room services, and selling other services like tours,
games, etc. which are helpful for providing the maximum satisfaction level to customers. It helps
in generating demand and increasing productivity and profitability for creating a good reputation
for the competitive advantages (Anderson and Xie, 2010). It is effective for reducing the
inventory issues for improving the financial position. The management is required for managing
the room revenue in an effective manner for analyzing the monetary position and potential for
investing funds for bringing more innovations. It is essential for maintaining and sustaining the
customers for attracting the customers towards services that are provided in the organization for
the sustainability and competitiveness. Financial contribution in hospitality helps in producing
the room revenue for the business as it helps in reducing the inventory issues which happens at
the workplace (Webb, 2016).

Pricing principles and its benefits for the Savoy hotel
In the hospitality industry, it is essential to determine the cost of products for improving
accommodation services. It helps the business in achieving the cost-effectiveness and setting the
adequate prices of products which are required for setting the adequate costs for increasing the
profitability and productivity. Competitiveness greatly impacts on the effective demand for the
services of accommodation (Abrate and Viglia, 2016). In the case of a pricing strategy, it is
necessary to determine the prices on the basis of expenses for manufacturing and producing the
services. An expense includes the labor cost and expenses which are considered as additional
overhead for evaluating the prices which help in producing effective services in the hotel. The
adoption of competitive strategy will help in affecting the profit margins and the position of the
organization in the global market. The principles which are required for setting adequate include
the measuring demand with inventory capacity. In this, it is considered for market demand and
analyzing the qualities of products and required to set the prices for producing the goods
(VanBoskirk, et al., 2011). It is analyzed that the price determination can be done with the help
of a tool of competitive market and customer requirements. In this, the deciding prices are
required to be adequate for the customers of the business. The inventories are required to be
managed for productivity and earning profits. Prices are determined with the help of the
requirements of customers and market demand.
Measure price sensitivity is considered as essential for the Savoy hotel for recognizing the
sensitivity. It provides the benefits in making effective decisions which include the competitive
strategoies and costs for accommodation services. In case of costing, the sensitivity and demand
for product services are included. Prices are evaluated for the satisfaction of customers with the
service of the business. For the long term period, the profitability and competitive strategies are
included. In order to improve the profitability, the economic and adequate prices are included
manufacturing and producing the for the operations (van der Rest, et al., 2016). For setting the
effective cost of products and services, the measuring of price sensitivity is effective which also
helps in improving the services of the hotel.
Measuring competitor's prices will be effective for analyzing the competitiveness and
competitive strategies for sustaining in the market. As per the market demand, the fluctuation in
the demand helps in gaining the customers and prices for changing the producing services. It

helps in creating ideas for the position in the market and sustainability. The competitor hotels
like Marriott and Hilton in the UK are evaluated. By setting the effective prices of the rooms to
help the business is facing the competition and making the position in the market. The prices of
the room services are set by measuring the costs of competitors (Sullivan, et al., 2014).
The effective Pricing principle for the savoy hotel includes the methods of pricing for evaluating
the prices of accommodation services. The preferable method or technique for the pricing of
room services is measuring demand with an inventory of the Savoy hotel. With the help of this
method, adequate costs are helpful for producing the affordable services of the accommodation.
It is analyzed that market demand and different income levels are useful for evaluating the cost
of services. In the case of luxury and quality which are used in-room services are required to set
the various price structures for the effectiveness of the business. Customers are required to be
satisfied with the accommodation services. In order to set the prices, the structure will be
effective for the profitability and competitive advantages (Paraskevas, et al., 2011). It is required
to be effective for the proper management of inventory and to enhance the demand for services.
The pricing system which is profitable for the hotel is the market demand and inventory principle
for pricing which helps in maintaining and setting the adequate cost for the rents and services of
rooms. This method of pricing is effective for the organization in the management of inventory
and helps to prepare the systematic plan for improving the profits. It will be beneficial for setting
prices for buying behavior and depends on the income level of the customers for attracting the
customers towards services. It will be beneficial for optimum utilization of resources and funds
for increasing profitability. It will provide the benefit for creating the value for competitive
advantages and maintain the position in the global market (Ogbeide, et al., 2017).
Application of methods for optimizing the profitability
It is analyzed that the preparation of strategies is essential for cost-effectiveness and increasing
the organization’s revenue. It is analyzed that determining the prices of food and services helps
in gaining the customers and demand will be increased at a high level. It is analyzed that for
economic stability and optimizing the profits with the help of a profit optimization approach. It is
essential for the business for using the gained revenue and profits for achieving a better quality
of services and to manage the inventories in an effective manner. This method helps in setting

adequate prices and making effective decisions for making the process creative for enhancing
competitive strategies (Mauri, 2013).
In the hotel industry, the implementation of inventory management and better services requires
the methods for gaining the profitability which includes finding the best result and price level as
it affects the profitability optimization of the Savoy hotel. Management is required to utilize the
gained revenue in an effective manner for improving performance and competitive advantages.
Management requires to set adequate prices for the services and requires to use the revenue
appropriately for the operations plans. Services are required to be provided for satisfying
customers from different parts of the world for competitiveness. It also requires adopting the
forecasting and decision making technique for profitability and operations (Litman, 2013).
The Savoy hotel is required to adopt the different strategies for preparing the innovations in
order to improve the profitability and sustaining the goodwill for the long term. It will help in
improving profitability in a manner that affects competitive advantages. It requires to allocate the
funds for improving the performance of the business and making effective decisions (Legohérel,
2013).
For technological development, the business requires to adopt the fixed capacity inventory as in
the competitive environment, the technology requires to be changed from time to time for
providing the services. The adoption of new technology in the hospitality sector helps in
providing the services of better quality for dealing the customers as satisfied customers help in
influencing the profit earning capabilities and hospitality services.
Fixed inventories are considered for optimizing the profitability which includes the fixed and
variable costs. In the hotel industry, innovative solutions are required to be designed which
includes loyalty schemes, outstanding service, and tariff structures.
Code of conduct, legislation, and practices
The impact of the code of conduct on accommodation services includes the various social norms,
ethics, laws, and codes that are required to be followed for the welfare of the society. It is
analyzed that the laws and regulations are essential in the hotel industry. When the good codes of
conduct are followed it attest to the professional standards for the organization (Wang, et al.,

2015). The regulations which are required to be followed include the registration of guests,
protection of data, discrimination, management of safety and insurance of public liability. In
business, the ethical code of conduct includes integrity, fairness at the workplace, commitment,
accountability, and confidentiality. It is beneficial for the Savoy hotel to build a society by
providing healthy food to customers. The hotel requires to deal with the people for different
countries for meeting the requirements of the customers. In the hotel industry, providing secured
and hygiene food to customers is considered as a social liability. It is necessary to provide
adequate prices to the customers which must be according to the manufacturing and production
system. It is analyzed that the code of conduct affects society's awareness. The employees are
required to work in an effective manner for dealing with the customers (Guo, et al., 2012). The
legislation and rules are made under legal provisions and practices which are according to the
services of accommodations for customers. Legislation and practices help the organization in
making strong working ethics. The organization is required to follow the code of conduct for
dealing with the customers from different countries and it is the responsibility of the hotel to
provide the proper salary and incentives to employees according to the job agreement. Along
with this, the insurance facility is also required to be provided to employees. It is necessary for
the organization to follow the rules and regulations for building trust in the society which
includes providing the safety food and accommodation according to the culture and social
system of the country (Fu, et al., 2016).
Customer expectations
The savoy hotel can improve the accommodation services with the help of quality management
and customer satisfaction. It is necessary to gain the trust of society by providing food safety and
accommodation services to customers from across the world. In order to increase the demand,
the customers are required to be satisfied with the services which also help in gaining profits and
productivity (Denizci Guillet, et al., 2014). Every customer has a different requirement in
services like family guests, traveler or travelers for luxury leisure. The services which can attract
the customers include the hotel facilities and amenities, location value for money, safety,
familiarity, accommodation style, and quality, availability and customer services.

The various system can be adopted by the management which includes the international
standards organization and quality models which is essential for the satisfaction of customers. In
order to influence the competitive advantages, the organization is required to face the
competition and sustainability in the global market for the long term. It is analyzed that satisfied
customers and comfort services help in attracting customers at a high level. Different guest needs
are different and for delivering the services the procedure is required to be followed by the
management for dealing with the customers. It is required to achieve the trust of customers and
maintain the reputation of the organization across the world. It is required for the organization to
conduct the research in the market which includes the review of the customer on the
accommodation services requirements. In the hotel industry, improvement in accommodation
services helps the organization in gaining profitability and competitive advantage on a large
scale (Denizci Guillet and Mohammed, 2015). The strategies can be followed and implemented
for the facilities of accommodation which are required to be as per the social system of different
countries. It is analyzed that the satisfaction of customers is the key element for building trust in
society.
It is interlinked with inventory management and the full use of resources and funds. This
includes helping to improve your financial situation and provide quality services for proper
hospitalization. In addition, inventory management and design can affect further operations and
competitive strategies. Beyond that, organizations need to develop strategies, including decision-
making processes, to improve their financial position and remain competitive to achieve long-
term market sustainability. The expectations of customers in the various market directly impacts
on the accommodation services which are essential for the competitive advantages and
profitability (Crossn, 2014).
Conclusion
In order to conclude, it is analyzed that in the hospitality industry revenue management majorly
affects the competitive advantages and profitability. Financial contribution plays a significant
role in producing the services of accommodation in the hotel. The various aspects are included
which affects the hospitality operations. For the long term sustainability and profitability, the
various pricing principles are included for setting the adequate cost for producing the services.

For creating innovation, appropriate techniques are used for profit optimization and competitive
advantages. In the hospitality business, social norms and legislation directly impacts on
providing better services of the accommodation. The ethical hotel services require to follow the
legislation and different rules as it affects the effectiveness and health promotion of the hotel. In
the global market, it is essential for the organization to understand the importance of customer
satisfaction as it helps in competitive advantages and long term sustainability. It is analyzed that
revenue management helps the organization in improving profitability.

Reference
Abrate, G. and Viglia, G., 2016. Strategic and tactical price decisions in hotel revenue
management. Tourism Management, 55, pp.123-132.
Anderson, C.K. and Xie, X., 2010. Improving hospitality industry sales: Twenty-five years of
revenue management. Cornell Hospitality Quarterly, 51(1), pp.53-67.
Arenoe, B., van der Rest, J.P.I. and Kattuman, P., 2015. Game theoretic pricing models in hotel
revenue management: An equilibrium choice-based conjoint analysis approach. Tourism
Management, 51, pp.96-102.
Aziz, H.A., Saleh, M., Rasmy, M.H. and ElShishiny, H., 2011. Dynamic room pricing model for
hotel revenue management systems. Egyptian Informatics Journal, 12(3), pp.177-183.
Bacon, D.R., Besharat, A., Parsa, H.G. and Smith, S.J., 2016. Revenue management, hedonic
pricing models and the effects of operational attributes. International Journal of Revenue
Management, 9(2/3), pp.147-164.
Bayoumi, A.E.M., Saleh, M., Atiya, A.F. and Aziz, H.A., 2013. Dynamic pricing for hotel
revenue management using price multipliers. Journal of Revenue and Pricing
Management, 12(3), pp.271-285.
Crossan, M., 2014. Hotel revenue management: Principles and practices.
Denizci Guillet, B. and Mohammed, I., 2015. Revenue management research in hospitality and
tourism: A critical review of current literature and suggestions for future research. International
Journal of Contemporary Hospitality Management, 27(4), pp.526-560.
Denizci Guillet, B., Law, R. and Xiao, Q., 2014. Rate fences in hotel revenue management and
their applications to Chinese leisure travelers: A fractional factorial design approach. Cornell
Hospitality Quarterly, 55(2), pp.186-196.
Fu, Y., Song, L., Lai, K.K. and Liang, L., 2016. Slot allocation with minimum quantity
commitment in container liner revenue management: A robust optimization approach. The
International Journal of Logistics Management, 27(3), pp.650-667.