Revenue Management Practices at Park Plaza Westminster Bridge Hotel

This report examines revenue management practices at the Park Plaza Westminster Bridge Hotel, focusing on distribution channels, pricing strategies, and the importance of revenue management in the hospitality industry. It assesses the hotel's current practices, including its use of online travel agencies (OTAs), direct channels, and various pricing methods. The report delves into revenue management concepts such as forecasting and segmentation, and explores current trends like technology and big data. It highlights the advantages of implementing revenue management, particularly the financial benefits and opportunities for maximizing revenue and profit. Finally, the report provides recommendations for improving distribution channels to optimize revenue generation for the hotel.

Running Head: Management
0
Revenue Management
3/31/2020

Contents
Introduction.................................................................................................................................................2
Current practices of the hotel...................................................................................................................3
Distribution..............................................................................................................................................3
Pricing.....................................................................................................................................................5
Recommendations regarding distribution channels.................................................................................7
References...................................................................................................................................................8

Introduction
The report is made in regards with the topic revenue management and their theory and practices
in the Park Plaza Westminster Bridge hotel that is a four-star hotel of London. This report
analyses the impact on the revenues and their customers can be evaluated. The different revenue
management practices will be implemented in this hotel. Revenue management is the
application of disciplined analytics which helps in analyzing the behavior of the consumers
which helps the hotel in optimizing their product availability and also maximize the revenue
growth. Revenue management avoids the pricing cannibalism as it maximizes the demand in the
high period and in the low demand it helps in stimulating the demand (Abrate and Viglia, 2016).
It is the long-term strategy which is used in the Park Plaza hotel so that they can consider all the
revenues in their profitability and in the high demand period also they can sell low rates. In this
report the market conditions will be evaluated and then inventory control tactics, pricing
strategies and then customer value assessment will also be evaluated. The selected hotel can
achieve the sustainable financial success by making the appropriate management decision.
In this report the several outcomes will be assessed such as different tools and techniques will be
applied so that effective decisions can be made in the revenue management (El Haddad, 2016).
The importance of the distribution and pricing in the revenue management applications are
evaluated and the applications of the revenue management are applied in the Park Plaza
Westminster hotel so that they attain more profits by increasing their revenues. There are several
revenue managements issues also which will also be addressed in this report.

Current practices of the hotel
Distribution
The Park Plaza Westminster Bridge hotel has the several distribution channels through which
they can attract the customers and can raise their revenues. The major distribution channel is the
official website of the hotel. The customers mainly use the OTA process that is the online travel
agency to use the services. It is the best way of the marketing strategy to increase the revenues
and it contains the details, pictures and other related information of the hotel also (Jerath, et al.,
2010). So, it becomes quite easy for the customers to access the information from the official
sites of the hotels and from online travel agency. The selected hotel uses the sustainability
practices that manages the distribution channel and pricing process. The practices adopted by the
hotel are related to the environment itself.
Online travel agents (OTAs) are the most ways of the distribution channel where the large
number of audiences is available and the customers can easily book the hotels. OTAs includes
the several distribution channels like Booking.com, Expedia, Priceline.com, Orbitz.com, etc. by
using the travel agent the company’s hotels can easily get the numerous benefits but they are the
mostly distribution channels (Wang, et al., 2014). The selected hotel adopts the customers of
OTA to improve their services and distribution.
It is the practice of managing the things of the customers in the hotel through the different distribution
channels so it can be referring to the chain of the intermediaries which the customers use for the
booking the hotel rooms or taking the hotel services. Booking engine is the most important
distribution channel used by the Park Plaza hotel as it helps in determine the potential guest and also
evaluates the user experiment of the customers (Hayes and Miller, 2011). The Park Plaza given the
various practices like managing the channel and overbooking management and managing the profit.
Hotel uses the different practices to provide the 180 standard rooms of rates £99 to £180, 34 superior
rooms – rates range from £130 to £199, 30 executive rooms – rates range from £150 to £299, 5 junior
suites – rates range from £200 to £399 and 1 executive suite – rates range from £299 to £499. To
provide these practices the hotel adopt several sustainability practices and CSR is one of the major
practices adopt by the Park Plaza.

The channel manager or the SEO and the SEA also plays the essential role in the as they are the
direct channels which distributes the room inventory and areas amongst OTAs. The revenues of
the Park Plaza hotel get improved through the different distribution channels as they capture the
customers and focus on the customer’s satisfaction (Sierag, et al., 2015). The hotels can receive
more booking through the online booking centers and it also offer the better booking experience
to the customers better than their other competitors which helps the hotels in increasing their
revenues and ultimately the profitability of the hotels will also be enhanced.
Every distribution channel has carried some benefits and cost so the cumuli nation of research
has been done on the distribution practice so that cost of the Park Plaza hotel can be minimized
and profitability can be increased. The revenues and the profits streams are attained by the hotel
industry through the GDSs and the OTAs as these two distribution channels are majorly used by
the customers and they area also sustainable going forward (Noone, et al., 2015). The
distribution cots of the hotel are rising steadily but they are the channel mix on which the
performance of the hotels is based on. The demands of the hotel room are increasing from the
last few years so the demand is also shifting to the right for the different distribution channels
and it helps in generating the revenues for the Park Plaza hotel of London. The channels adopted
by this hotel helps to improve their revenue in the different process.

Pricing
This includes the several current pricing methods which were used by the Park Plaza hotel to
raise the revenues of the hotels. The multiple prices are offered by the hotels depending upon the
requirements of the customers. As per the ratings of the hotels and as per their services also
prices are charged by the consumers. As the competition in the hospitality industry is increasing
so the competitor’s hotel gets monitored and consistent prices are displayed to the customers in
the hotels so that transparency can be maintained (Korzh and Onyshchuk, 2018).
Generally, the pricing in the Park Plaza is based on the combination of certain factors in the hotel
such as demand, location seasonality, value of services, amenities, star ratings and the other hotel
competition in the market (Ivanov, 2014). Mainly, the Park Plaza includes the sustainability
pricing which cannot affect the environment at any cost. The inventory of this hotel is changing
so the prices of the hotel rates are fluctuates. The prices of the room rates are based on the supply
and demand. The different rooms include different pricing as the hotel includes 180 standard
rooms which is based on the different prices, 34 superior rooms which have different pricing
structure and executive and suites have different pricing structure. These price structures are
changes as per the quality and services of the different rooms. If the demand of the rooms is
higher and their supply is lower than the hotel will charge the higher prices but if the demand is
lower in the off season and the supply is more so generally the hotel industry reduce their prices
to attract more customers.
The hotel prices are also higher these days as the taxes of the room have increased which affects
the revenue of the hotels. There were many underlying real estate taxes which the hotel guest
needs to pay on the special excise taxes and the sales taxes. The current practices of the pricing
hotels are based on the forecasting the things and then prices are set in the hotels based on the
anticipated demand (Aubke, et al., 2014). At the online distribution channels the price strategy of
the Park Plaza are maintained so that the transparency of the consumers can be attained.
The price per segment is also used by the pricing industry and it is the most common strategy of
the pricing is used by the selected hotel and offers the different prices to the different customers
of the same product. The hotel also offers the packaging prices to the consumers which help in
increasing the revenues for the company (Cetin, et al., 2016). In the package there were several

things are included such as meals, amenities, hotel services, etc. so all those packages include in
the lower process to attract the customers.
The Park Plaza Westminster hotel have to make the attractive pricing options so that new
audience can be attracted. At the time of the weekends the prices of the hotel increase and helps
the hotel industry to increasing their revenues (Forgacs and Dimanche, 2016). This hotel also
offers the discount in the pricing when there is the off season so that more audience can be
gathered. But the main aspect of the pricing strategies of Park Plaza hotel is based on the
different sustainability practices.

Recommendations regarding distribution channels
The Park Plaza Westminster hotel needs to use some recommendations to improve the revenue
management by using the different distribution channels. This hotel needs to include several
aspects which are discussed below:
 Choosing channel Intermediaries
The hotel increases the efficiency of a distribution channel by increasing the overall
profits and benefits of the channel intermediaries and the intermediaries also get
increased. By choosing this intermediary, the Park Plaza hotel helps to achieve their goals
and objectives.
 Using consolidation
The consolidation is also responsible to increase the overall efficiency of the Park Plaza
hotel. This is recommended to the hotel to adopt this distribution channel for managing
the cost of managing the channel in a proper manner. By this the Park Plaza four-star
hotel focus on the key components of business.
 Maintain supply chain management
The supply chain management is also important for the four-star selected hotel to
manage their distribution of services in the proper manner. The focus on the supply chain
management increases the proper use of distribution channel and also decreasing the
costs of inventory.

References
Abrate, G. and Viglia, G., 2016. Strategic and tactical price decisions in hotel revenue
management. Tourism Management, 55, pp.123-132.
Aubke, F., Woeber, K., Scott, N. and Baggio, R., 2014. Knowledge sharing in revenue
management teams: Antecedents and consequences of group cohesion. International Journal of
Hospitality Management, 41, pp.149-157.
Cetin, G., Demirciftci, T. and Bilgihan, A., 2016. Meeting revenue management challenges:
Knowledge, skills and abilities. International Journal of Hospitality Management, 57, pp.132-
142.
El Haddad, R., 2015. Exploration of revenue management practices–case of an upscale budget
hotel chain. International Journal of Contemporary Hospitality Management.
Erdem, M. and Jiang, L., 2016. An overview of hotel revenue management research and
emerging key patterns in the third millennium. Journal of Hospitality and Tourism Technology.
Forgacs, G. and Dimanche, F., 2016. Revenue challenges for hotels in the sharing economy:
facing the Airbnb menace. Journal of Revenue and Pricing Management, 15(6), pp.509-515.
Hayes, D.K. and Miller, A.A., 2011. Revenue management for the hospitality industry. Hoboken,
NJ: John Wiley & Sons.
Ivanov, S., 2014. Hotel revenue management: From theory to practice. Zangador.
Jerath, K., Netessine, S. and Veeraraghavan, S.K., 2010. Revenue management with strategic
customers: Last-minute selling and opaque selling. Management science, 56(3), pp.430-448.
Korzh, N. and Onyshchuk, N., 2018. Selection of the optimal set of revenue management tools in
hotels. Technology audit and production reserves, (1 (4)), pp.16-21.
Noone, B.M., Enz, C.A. and Glassmire, J., 2017. Total hotel revenue management: A strategic
profit perspective.

Sierag, D.D., Koole, G.M., van der Mei, R.D., Van der Rest, J.I. and Zwart, B., 2015. Revenue
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journal of operational research, 246(1), pp.170-185.
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