BAHBM 805: Hotel's Room Revenue Management Strategy and Analysis

This report analyzes the room revenue management strategy of a Park Hyatt hotel considering a potential new location in Oxford. It begins with an overview of the business environment, highlighting factors influencing the hotel's success, such as local regulations and market dynamics. The report justifies the choice of the Park Hyatt brand and its suitability for the Oxford market, emphasizing its luxury positioning and potential for revenue generation. It then delves into market segmentation, outlining how the hotel will target different customer groups based on income, age, and psychographic profiles. The report explores the hotel's room pricing policy, including competitor analysis and dynamic pricing strategies. Finally, it examines the hotel's distribution channel strategy, focusing on its own website, social media, and direct selling approaches to maximize bookings and brand visibility. The report concludes with a summary of the key findings and recommendations for the hotel's revenue management approach.

Hotel’s room revenue
management strategy and key
performance summary

TABLE OF CONTENT
Introduction......................................................................................................................................1
Part -A..............................................................................................................................................1
1. Description of the business environment of the location..................................................1
2. Justification of the hotel chain which are to be opening...................................................1
3. Market segments................................................................................................................1
4. Rooms pricing policy of the hotel.....................................................................................2
5. Distribution channel strategy of park Hyatt......................................................................3
Conclusion.......................................................................................................................................3
REFERENCES................................................................................................................................4

Introduction
Park Hyatt is the luxury hotel and have hotel chain globally. They are famous for their
luxury services. This report will discuss business climate and competitive set of hotel. Further
will analyse market segments, rooms pricing strategy and distribution channels.
Part -A
1. Description of the business environment of the location
The business climate of Oxford is pleasant for opening new resort. It will bring lots of
opportunities for the company. As the resort will be opening in the prime location where many
employment sectors are present. Hotel have to take permission to build resort in the area and
along with that Park Hyatt also have to take various licences for every business activities. Taxes
which are imposed by the government can affect the pricing policy of the company (Mody, Suess
and Lehto, 2019).
Resort also have to carry their marketing according to the nature and spending power of the
customers. Exchange rate changes can influence the demand for hospitality sectors. As per the
demand the occupancy of rooms will increase or decrease. Company can also get support from
the society. As people prefer resort more which are present at Oxford location. For the purpose
of relaxing and for leisure as well.
2. Justification of the hotel chain which are to be opening.
The hotel chain which was going to be open is Park Hyatt. It is five star hotel and resort and
present worldwide. Oxford is the crowded location so opening in that location will help company
in generating good revenue. The architecture and interior of the resort is world famous. In park
Hyatt furnishing is done by designers and ambience of the resort is also soothing. Resort will
attract all age group people.
As it is good for family and for couples. Resort have to face extensive competition in the
oxford location. As it is crowded and luxury location so it attracted many hotels. Numerous
hotels has already present in that location. So if company want to beat the competition then they
have to bring something new which can be in terms of treating customers or providing them with
different menu. Recommended bedrooms will be 250.
3. Market segments
Segmentation:
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It is very important to segment the customers. On the basis of income segment resort
divided the customer. As they have luxury rooms for those customers which belongs to high
income group and are ready to pay for luxury services. Resort will also target upper middle class,
they will build such rooms which have less facilities as compare to luxury rooms. For that rooms
company will get to the customers whose income is less then high class customers. On the basis
of age also they will segment (Dibb, 2017). Company will target couples, family and retired
people. They will provide different package for each age group. Psychographic segmentation
will also adopted in order to see those customers whose psychology is money doesn’t matters for
luxury services.
Targeting:
Company will target most high class customers so that can generate good profits from them.
Along with that upper middle class customers will also targeted as they are more in number so
providing facility to them will help company to achieve objectives.
Positioning:
For the advertisement park Hyatt will use social media platforms as through social media
attracting customers will be easy and cost effective. To position the customers they will also
provide benefits in starting like giving discounts coupons to the customer so that more customer
visit the place.
4. Rooms pricing policy of the hotel
Competitor pricing:
Park Hyatt will adopt competitive based room pricing strategy. For that purpose company
have to research that at what prices competitors are giving rooms. hotels which are present
Around oxford location company have to check their prices and then decide their prices
accordingly. To beat the competition company will decide the prices of the rooms as per the
facility which they will be providing. Resort should also observe that how rival hotels are able to
attract customers and what deals they are providing to them (Fadly, Ridwan and Akbar, 2019).
Keep an eye on the competition that when and why they are changing the prices of the rooms.
Dynamic pricing strategy:
Resort will also adopt this pricing policy which means that deciding the prices of the rooms as
per the demand and supply. This strategy will help park Hyatt to increase their revenue. They can
increase cost of the room when demand is more and decrease the rates when demand is less.
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5. Distribution channel strategy of park Hyatt
Own website:
To encourage the online bookings on their website, company should build website in such a ay
which gives pleasant experience to the guests and attract them to book (5 Effective Distribution
Channels To Keep Your Hotel Alive & Competitive., 2019). On the website they can use HD
pictures and also highlight nearby landmarks which can be beaches, forests etc.
Advertising through social media:
In order to increase the brand recognition and attract more customers social media is adopted by
many hotels. As the users on these platforms are increasing daily and that will help company to
target their audience. To promote on social media is less costly and also consumes less time.
Company can also run hastag campaign so that more customers get awareness about the brand.
Direct selling:
This method is consider old method but still the most effective method. It does not include the
middle men and company can directly contact their potential customers. In this approach
customer who want to stay in the resort will directly comes in the hotel and make bookings for
them. This strategy is also effective for those customers who does not know how to book online.
Conclusion
From the above report it can be analysed that park Hyatt is the grand hotel and want to
expand their business at oxford location. Report has described business climate of location and
hotel chain. Market segmentation and pricing policy is also evaluated. Resort will do social
media promotion, direct sale etc for the purpose of distribution strategy.
6.
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REFERENCES
Book and journal
Dibb, S., 2017. Changing times for social marketing segmentation. In Segmentation in social
marketing (pp. 41-59). Springer, Singapore.
Fadly, M., Ridwan, A.Y. and Akbar, M.D., 2019, September. Hotel room price determination
based on dynamic pricing model using nonlinear programming method to maximize
revenue. In 2019 2nd International Conference on Applied Information Technology and
Innovation (ICAITI) (pp. 190-196). IEEE.
Mody, M., Suess, C. and Lehto, X., 2019. Using segmentation to compete in the age of the
sharing economy: Testing a core-periphery framework. International Journal of Hospitality
Management. 78. pp.199-213.
Online
5 Effective Distribution Channels To Keep Your Hotel Alive & Competitive., 2019. [online].
Available through: < https://www.hotelspeak.com/2019/08/5-effective-distribution-
channels-to-keep-your-hotel-alive-competitive/>
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