Case Study: Revenue Management Strategies at Grand Hyatt Melbourne

This report provides a comprehensive analysis of the revenue management strategies employed by the Grand Hyatt Melbourne Hotel. It begins with an introduction to revenue management in the hospitality industry, discussing its importance and addressing relevant social and ethical considerations. The report then offers an overview of the Grand Hyatt Melbourne, followed by a detailed examination of its revenue management tactics, including marketing, branding, yield management, pricing strategies, and the use of distribution channels. The analysis interprets how these strategies contribute to revenue maximization. Furthermore, the report explores the social and ethical issues associated with the hotel's revenue management approach. Finally, it concludes with recommendations for the hotel, aiming to improve its revenue management practices and address identified challenges, supported by academic references throughout.

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REVENUE MANAGEMENT
GRAND HYATT MELBOURNE HOTEL

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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

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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

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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

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include providing the customers in selecting an Impressive club room for in the hotel upper
phase. It also provides complimentary breakfast and mixed drinks in the language of club this
strategy is adopted to motivate and attract large number of customer. However, it is one of the
leading hotels in Australia which also awarded several awards for offering efficient and superior
facilities to the customers (Sachs, 2018).
The hotel has various accommodation choices which include parking of car, gymnasium,
entertainment, facilities of medical, room service and 24 hours facilities of reception, to fulfill all
the requirements of customers. The hotel rooms has Yarra River view with the bathroom of
Italian marble, the hotel provide 84 rooms of club rooms as well as 25 premium suites (Sjoberg,
2016). The hotel offers various choices for occasion festivity like feast, weddings, and
conferences (Tan et al., 2017). In this each staff members as well as representatives of the hotel
are well-prepared to get and serve its clients with high effectiveness and warmth. However,
because of the 24 hours services, it does few tie-ups with several agencies of travel in both the
ways that is offline and online who prescribe a guests stay at any of its lodgings as per their
particular needs and desires.
Revenue management Analysis
Grand Hyatt Melbourne revenue management tactics
Revenue management tactics is considered significant because organization develop the
strategies of pricing, distribution, forecasting as well as other strategies for managing the
revenue and to generate the profits in the organization. It also helps in the development and
expansion; however every organization has different aim to develop the strategy. The objective
of Grand Hyatt Melbourne marketing strategy is to protect as well as construct the value of brand
awareness by adopting the multichannel approach of marketing; it is done to raise the satisfaction
of the guests by taking all the points of guest’s experience (Tan et al., 2017). Grand Hyatt
Melbourne adopted the sales promotion strategy by providing refined business as well as spare
travelers with stylish facility of accommodations, amazing restaurant and bars. It also provides
other facilities of social meeting. The hotel provide various discounts to the consumer, however,
in the year 2019 it give 20% off in the booking. The hotel also offer voucher card to the guests if
the stay more than 2 continuous evenings. However, the most important aspect of increasing the

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sales and to make hotel one of the well-established brands is the method of promotion which is
majorly adopted by the hotel that is mouth publicity. Grand Hyatt Melbourne also offer festival
packages with the additional services such as marvelous background, crafted cuisine for the
guests and the discount of 5% for the rooms, free upgrading of the rooms (Manning et al., 2015).
The yield management is done by the hotel through analyzing the business opportunities and
trends, it focusing on managing the distribution strategy that is putting the similar rates in all the
channels. It used effective tools for the sources of channel that is group buying sites as well as
offers to the executive members. However, hotel develops the strategies according to their
competitors as well as by viewing the existing performance of hotel (Degbelo et al., 2016). It
also used the day to day pricing strategy to increase the sales. The hotel also does advertisement
of the offer in the social media such as Facebook and Instagram. However, the followers of
Facebook page increases in the year 2019 by 27.3k (Russo et al., 2018).
Development through revenue management tactics
Revenue management tactics such as marketing strategies leads in increasing the booking of
hotels, therefore it results raising the revenue of the hotel that is in the 2017 revenue of the hotel
was $4.68 billion. The hotel gets the awards for the superior marketed hotel- Division of
accommodation. In the year 2017, the hotel also gets the Australian hotels alliance award for
their superiority. It becomes the finalist in the division of human resource in service
accommodation as well as also finalist in the Best meeting as well as Venue of Events
(Kjellstrom et al., 2016). The hotel increases their internal infrastructure that is presently the
hotel has 550 guests’ rooms, 15 meeting rooms, large the rooms by 60,246 sq.ft as well as
meeting space is up to 21,087 sq ft. However, in the year, 2018 Grand Hyatt Melbourne is
awarded for being superior luxury hotel in Australia, which have nightly rate up to 13335 for
particular day (Singleton & Flor, 2015). The strategy helps the hotel in targeting the high
business class population as well as upper group division and also leads in adopting the premium
pricing for the target audience. However, the revenue management tactics also helps in
increasing the options of lodging such as full-administration lodgings, selective-service as well
as extensive service lodging in the palace of Hyatt.

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Grand Hyatt Melbourne social and ethical issues in revenue management
Social media is having high influenced on the marketing of the hotels as well as the revenue
management of hotels which leads social issue because internet based discussions and online
surveys keep on being supporting the hotel to know the needs and requirements of the consumers
to a great extent (Patterson et al., 2017). However, Grand Hyatt Melbourne considers the
conversation mad on social media as one additional point to audit. It put the additional stock to
meets the requirements of the people but presently it become out of their control because of raise
in the expectations with medium-range pricing strategy. It is also become ethical issue because
hotel does not focuses on the legal consideration frequently and offers the different prices from
different consumers (Hereter, 2017). The hotel does not target the medium class section because
it adopts premium pricing strategy.
Grand Hyatt Melbourne also have ethical problem regarding the sustainable practices, because
63% of the strategies made by the hotel for protecting the environment as well as increasing the
value in the society. However, it is the leading brand of Australia, still faces the issue in doing
some of the activities in unethical manner (Bates et al., 2017). The hotel also faces the problem
of culture diversity, that is hotel find difficult to meet the needs and requirements of the guests
and employees because of diverse background and behavior these are some of the major issues
which is faced by the company because through this company finds difficulty in managing the
revenue in effective manner (Jurewicz et al., 2015).
Recommendations
Grand Hyatt Melbourne faces various social and ethical issues, through which the revenue
management does not done efficiently. However, to overcome this difficulty, the hotel can
provide the training to the employees regarding the workplace ethics. The hotel can use the
differed guidance techniques to provide the guidance to the employees about how to address and
resolve moral predicaments. Experiential learning is a powerful method to encourage the training
about the workplace ethics (Johnson, 2018). The hotel can also formulate various situations
about the misappropriation of organization reserves, personal values as well as other unethical
behavior such as not following the regulatory rules. The hotel can also increase the sustainability
practices by decreasing the carbon footprint at higher level and can also use the resources at
optimum manner, by spreading the awareness to reuse the towels, decrease the wastage of water.

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The hotel can also set the expectations within limit, so that it provides the offer to both online as
well as offline customers; this can help the company to set offer the rooms at same prices.
However, no discrimination among the prices of the customer takes place and the strategy for the
expectations is developed according to the mission, vision as well as the code of conduct of the
hotel. For managing the issue of cultural diversity the hotel can adopt the strategy of effective
communication, that is for the local employees and guests same language can be used but for the
employees and guests of different country, managers has to use different forms of word as well
as abbreviations. This helps in reducing misunderstanding and encouraging the members of the
organization (Luger et al., 2016). However, the company can also employ their staff members
from the broad areas to increase the diversity in hotel, so that it can be encouraged and can build
the culture and environment of forgiveness. This helps in solving the social issues in the society
among the employees as well as guests.
Conclusion
From the above it is conclude that revenue management is considered an important approach for
the organization for sustaining in the competitive environment. In this report, revenue
management of Grand Hyatt Melbourne is discussed, however hotel adopt various strategies for
managing revenue such as marketing strategies, pricing strategies and distribution strategies.
From the above it also concludes that it faces several social and ethical issues such as
discrimination in the price, cultural diversity. To overcome this issue it can adopt the strategy of
effective and open communication, setting the expectations for online as well as offline offers.

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Routledge.
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Maxing Out Success. United Kingdom: Complete Publishing.
Capocchi, A., 2018. Economic Value and Revenue Management Systems: An Integrated Business
Management Model. Germany: Springer.
Degbelo, A. et al., 2016. Opening up Smart Cities. ISPRS International Journal of Geo-
Information , 5(2).
Hereter, G., 2017. Introduction to Revenue Management for Hotels: Tools and Strategies to
Maximize the Revenue of Your Property. Scotts Valley: CreateSpace Independent Publishing
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Johnson, C., 2018. The Australian right in the “Asian Century”: Inequality and implications for
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Manning, C. et al., 2015. The emergence of hotel/lodging real estate research. Journal of Real
Estate Literature , 23(1), pp.1-26.
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Impact in the Process Industry. Germany: Springer.

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Appendix
Grand Hyatt Melbourne Facebook Fans
Source: (Bates et al., 2017)

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Internal infrastructure
Source: (Capocchi, 2018)