Revenue Management: Ethics, Segmentation, and Pricing Strategies

This report provides an analysis of revenue management within the hospitality sector, focusing on ethical considerations, traveler segmentation, and pricing strategies. It explores the importance of fair pricing and the segmentation of travelers based on class, including economic, premium, and leisure treatments. The report also discusses the concepts of last-room availability and rate parity, highlighting their significance in hotel management. The references cited include works by McGill et al. (1999) and Mattila et al. (2005), which provide insights into revenue management research and the impact of pricing policies on customer satisfaction. This report aims to provide a comprehensive understanding of revenue management in the hospitality industry, offering valuable information for students and professionals alike.

DISCUSSION
REVENUE MANAGEMENT

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1. Revenue management is ethical as the customer has to be confident that the price which
is offered to them should be reasonable or right now and will be exactly the same in the
future. Employees should have a feeling that they are contributed in the revenue and
another type of gain. On the other hand, owners should also have a feeling that they are
receiving desire money and their business would not get affected. In the end, traveler
wholesaler should be sure that what they are selling should not affect the business as a
whole negatively. (McGill, et.al.1999)
2. In hotel management, the owner will do segmentation as per the type of traveler. Type of
traveler is basically the class of the customers. According to the class i.e. the low class.
Middle class, higher class traveler owner will segment. If the traveler is low class, then
economic treatment will be given to them, for middle-class people premium class
treatment will be given and at the end, if a higher class traveler comes then leisure
treatment will be given to them.
3. Last room availability refers to that if the room is available for the sale, even one room
then the parties who has an LRA contract only have the right to buy that room on the
hand Rate parity means that preserving same consistent rates for the similar products in
the all distribution channels of online including Expedia, Hotwire, Orbitz. Irrespective the
commission of the OTA will charge. Last room availability is beneficiary to the hotels.
(Mattila, et.al.2005)

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REFERENCES
McGill, J. I., & Van Ryzin, G. J. (1999). Revenue management: Research overview and
prospects. Transportation Science, 33(2), 233-256.
Mattila, A. S., & Choi, S. (2005). The impact of hotel pricing policies on perceived fairness and
satisfaction with the reservation process. Journal of Hospitality & Leisure Marketing, 13(1), 25-
39.