The Impact of Revenue Management Outsourcing on the UK Hotel Industry

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Research Proposal
Exploring the new trend of revenue management
outsourcing in UK hotel industry
Globalisation Topic
Student Name:
Student ID:
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Abstract
The focus of the study is to illustrate about the trends existing in the hotel industry of United
Kingdom in relation to the growing use of outsourcing revenue management services. Most
of the company in the hotel industry are willing to outsource these activities in order to make
use of best technology and avoiding recruitment of revenue managers within the company.
The researcher has developed appropriate objectives to collect data about the topic. Different
methods have been used for gathering data from relevant sources. Along with this, the
researcher will strictly follow the ethical procedures for maintaining transparency and quality
of the study.
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Table of Contents
1.0 Introduction..........................................................................................................................4
1.1 Background to the Study......................................................................................................4
1.2 Research Aim.......................................................................................................................4
1.3 Research Objectives.............................................................................................................4
1.4 Research Questions..............................................................................................................5
1.5 Rational of the Study............................................................................................................5
1.6 The Scope of the Study........................................................................................................6
1.7 Literature Review.................................................................................................................6
1.8 Research Methodology.........................................................................................................7
1.9 Project Planning...................................................................................................................8
1.10 Ethical Issues......................................................................................................................9
References................................................................................................................................10
Appendix..................................................................................................................................11
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1.0 Introduction
The primary reason of implementing revenue management in the hotel industry is as varied as
the hotel industry of the UK itself. However, according to various surveys and analysis, it has
been found that very little percentage of hotel companies makes use of the revenue
management. However, under the global economic crisis, many changes have been witnessed
that signify the emergence of new trends in the hotel industry, where the senior management
is willing to outsource these aspects of the business.
1.1 Background to the Study
Implementation of revenue management in the hotel industry has been witnessed to have
direct links with the generation of 5-10 per cent uplift in sales (Duettoresearch.com, 2019).
Previously, very few companies were found to have adopted this mechanism, due to the
prevalence of several challenges in the area. However, with several technological
advancements these areas have witnessed rapid growth and development leading to new
trends and extensive use of these areas for gaining competitive advantage (Nair, 2018).
1.2 Research Aim
The primary aim of the study is to provide greater understanding about the new trends of
revenue management outsourcing prevalent in the hotel industry of United Kingdom.
1.3 Research Objectives
The research objectives of the study are:
 To explore the trends evident in revenue management outsourcing in the hotel
industry of United Kingdom
 To analyse the corresponding impact of the trends in revenue management
outsourcing on the hotel industry of United Kingdom
 To evaluate the various challenges and issues accompanying the revenue management
outsourcing in the hotel industry of United Kingdom
 To provide suitable recommendations so as to utilise the new trends in favour of the
hotel industry of United Kingdom
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1.4 Research Questions
Research questions of the study are:
 What are the trends evident in revenue management outsourcing in the hotel industry
of United Kingdom?
 What is the corresponding impact of the trends in revenue management outsourcing
on the hotel industry of United Kingdom?
 What are the various challenges and issues accompanying the revenue management
outsourcing in the hotel industry of United Kingdom?
 What will be the suitable recommendations so as to utilise the new trends in favour of
the hotel industry of United Kingdom?
1.5 Rational of the Study
What is the issue?
Hotel industry is diverse sector, as it involves various products and services that need to be
dealt in an appropriate manner to ensure satisfactory customer experiences. However, with
rising global economic crisis, the management of the hotel industry in UK has not been able
to analyse and predict demands, leading to poor financials.
Why is the issue?
Different analysts and market experts have cited different reasons for the emergence of the
issue; however, the most reasonable reason behind the issue is that there has been immense
pressure on the revenue managers and the business owners, which has led to the decline in
the level of expertise.
What is the issue now?
According to various surveys and findings, it has been analysed that weakness in the field of
adequately analysing and predicting the future demands has hit a strong blow on the financial
strengths of the company. Therefore, realising the changing trends of customer behaviour all
the companies in the hotel industry are compelled to introduce structural changes.
What light this project will shed upon?
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This project will shed light upon the benefits of outsourcing the revenue management
services on the functioning of the entire hotel industry. Along with this, various trends
observed in this particular area will be highlighted.
1.6 The Scope of the Study
The primary theme of the study is to discuss about the revenue management, the need of
outsourcing these activities and the corresponding effect of these activities on the industry.
This will help the management of different hotel companies to bring about the structural
changes in the company and utilise the opportunities for business expansion and growth.
1.7 Literature Review
Revenue management in the hotel industry
Revenue management can be understood as an approach or practice that enables the
management to predict the demands, optimise the products and services as per the need of
customers and develop appropriate pricing strategies (Xu et al., 2019). Many scholars and
experts define the term revenue management in hotel industry as process for selling the right
room to the right customer at right price through suitable channel as well as with best cost
efficiency.
Need for outsourcing the hotel revenue management
Revenue management is vital part of the hotel industry, due to its inherent changing nature.
Within the hotel industry, the prices of the rooms and other services keep changing as well as
the customers tend to be willing to pay different prices of the same product. Customers find
changes in the prices of the room at different time of the year; they use different channels to
book tickets depending upon when they need it (Denizci Guillet and Shi, 2019). In general,
all the hotel organisations charge higher prices, when the demand is high, while charge low
prices when the demand is low. Therefore, it is evident that the ability to predict the level of
demand and optimisation of pricing strategies will greatly help to propel the business
activities of the hotel companies (Möhring et al., 2018).
The major advantage of outsourcing revenue management rather than carrying it out
internally is that it requires significant amount of investment in technology and recruitment of
full-time revenue managers (Altin et al., 2018). In the case of outsourcing these activities,
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management of hotel industries can gain competitive advantage through availability of up-to-
date technology, market insights and techniques.
Literature Gap
The study provides detailed discussion about the new trends of revenue management
prevalent in the hotel industry. However, the major limitation of the study is that it fails to
provide detailed study of future hotel revenue management methods and tools.
1.8 Research Methodology
Research Philosophy
Researchers have to choose a philosophy of research from pragmatism, positivism, realism
and interpretivism based on which the various process of the research will be conducted to
make it valuable for the future research (Knobe and Nichols, 2013). It also helps in
researching a specified way leading it in the required direction. In the research study, the
researcher will adopt realism philosophy to complete the research study effectively.
Research design
Among the various research designs available such as evaluative, explanatory, exploratory,
and descriptive, researchers choose a specific design for conducting the research. The design
of the research should comply with the topic and study field associated to make the research
successful and valuable for future research (Mitchell and Jolley, 2012). For the research
study, the exploratory design of research will be chosen by the researcher based on the
research topic of exploring new trends in revenue management outsourcing in the hotel
industry of the UK.
Research approach
The approach of research is the process comprising of various steps that help in analysing the
data and information so that it can be interpreted successfully for the effective outcome. It is
based on the problems or issues that the researcher will address in the research study.
Inductive, abductive or deductive approaches can be used by the researcher in their research
study. However, the researcher will use a deductive approach to analyse and address the
issues and problems of the research study.
Data collection technique
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It is essential for the researcher to gather valuable and relevant data and information for
enriching the research study and make it helpful for future researches. The researcher will use
the secondary and primary data collection method for gathering information for the research
study. Secondary data will be collected through available literature, articles and journals
(Maxwell, 2012). On the other hand, primary data will be collected through a quantitative
data collection technique by adopting a survey approach. 100 employees of the hotel industry
will participate in the survey.
Sampling technique
Different types of sampling methods are used for collecting quantitative data based on the
approach or type used for collecting the data. Probability sampling will be used by the
researcher for the study. The 100 employees of the hotel industry will be selected through
random sampling techniques to understand their opinion about revenue management.
1.9 Project Planning
Complete planning of different activities has been done; this has been presented below in a
tabular form:
List of Activities 4th Feb-
25th Feb
26th
Feb
12th
Mar
13th
Mar-
2nd
Apr
3rd
Mar-
26th
Apr
27th
Apr-
20th
May
21st May-
24th May
Topic of the project is
identified
Data for the project will be
gathered
Layout of the project is
outlined
Literature review
Project structure is outlined
Various methods will be
outlined
Analysis of information will be
carried out
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Conclusions on the topic will
be developed
Final draft submitted
Table 1: Gantt chart
(Source: Created by the learner)
1.10 Ethical Issues
Ethical issues involve the overall aspect of the study, according to which the researcher
makes sure that all procedures and steps are taken accordingly. In this study, the researcher
will make sure that the study is carried out in a adequate manner such that the information is
gathered only from the reliable sources. Along with this, Data Protection Act, 2018 will be
followed strictly.
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References
Altin, M., Koseoglu, M.A., Yu, X. and Riasi, A., 2018. Performance measurement and
management research in the hospitality and tourism industry. International Journal of
Contemporary Hospitality Management, 30(2), pp.1172-1189.
Denizci Guillet, B. and Shi, X., 2019. Can revenue management be integrated with customer
relationship management?. International Journal of Contemporary Hospitality
Management, 31(2), pp.978-997.
Duettoresearch.com. (2019). [online] Available at:
http://www.duettoresearch.com/resources/Effective-Revenue-Management-in-the-
Hospitality-Industry-Report.pdf [Accessed 25 Feb. 2019].
Knobe, J. and Nichols, S. eds., 2013. Experimental philosophy(Vol. 2). Oxford University
Press.
Maxwell, J.A., 2012. Qualitative research design: An interactive approach (Vol. 41). Sage
publications.
Mitchell, M.L. and Jolley, J.M., 2012. Research design explained. Cengage Learning
Möhring, M., Keller, B., Schmidt, R. and Zimmermann, A., 2018, June. Revenue
Management Information Systems for Small and Medium-Sized Hotels: Empirical Insights
into the Current Situation in Germany. In International conference on intelligent decision
technologies (pp. 120-127). Springer, Cham.
Nair, G.K., 2018. Dynamics of pricing and non-pricing strategies, revenue management
performance and competitive advantage in hotel industry. International Journal of
Hospitality Management.
Xu, X., Zhang, L., Baker, T., Harrington, R.J. and Marlowe, B., 2019. Drivers of degree of
sophistication in hotel revenue management decision support systems. International Journal
of Hospitality Management, 79, pp.123-139.
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Appendix
Q1. What is your work tenure in the hotel industry?
o Less than a year
o 1 to 3 years
o 3 to 5 years
o More than 5 years
Q2. Does your organisation have revenue managers?
o Yes
o No
o Not sure
Q3. What skills does a revenue manager should have?
o Experience
o Analytical skills
o Knowledge of market
o Expertise in revenue management
Q4. How does revenue management benefit your organisation?
o Competitive advantage
o Optimisation of the organisational revenue
o Increased focus on operations and sales
o Latest techniques and methods
Q5. Does your organisation outsource revenue management to the third party?
o Yes
o No
o Not sure
Q6. How can the revenue management of your organisation be improved?
o Better insight into market trends
o Latest technologies
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o Management
o Development of solutions for issues and problems
Q7. What are the challenges faced by your organisation for efficient revenue
management?
o Lack of expertise
o Outdated technologies and methods
o Pressure by senior executives
Q8. How far do you agree that outsourcing revenue management will benefit your
organisation?
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
Q9. How will outsourcing revenue management help an organisation functioning in the
hotel industry?
o Better talent
o Access to the broad think tank
o Better functioning of the workforce
o Expertise and better management of issues and problems
Q10. What trends in revenue management is adopted by your organisation?
o Shift to the management of profits
o Direct hotel bookings
o Enhancement in the use of technology
o Efficient use of the data
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