Cornell Finds Pricing Revenue Management Concern Worldwide

Hotel revenue managers worldwide are looking for ways to maintain rates and avoid price wars, according to a new survey published by Cornell’s Center for Hospitality Research. The study, “Hotel Revenue Management in an Economic Downturn: Results from an International Study,” by Sheryl E. Kimes, is available from the center at no charge at http://www.hotelschool.cornell.edu/research/chr/pubs/reports/2009.html. In addition to the results of the survey, the report presents commentary from participants in a revenue management roundtable, held in May 2009 in Singapore.

“I conducted this 2009 survey to capture the changes in revenue management that have come about due to economic challenges between 2008 and 2009,” said Kimes, who is the Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell School of Hotel Administration. “Not surprisingly, the revenue managers’ top concerns were all marketing and pricing related, including customer rate resistance, contract renegotiations, competition, and price wars. Just a year ago, the top issues involved human resources and technology.”

Looking at the results of the survey, participants in the Singapore roundtable agreed that pricing power has shifted considerably toward the customer. However, many hotel revenue management professionals are finding ways to maintain rates by targeting their rate adjustments and focusing on adding value by bundling packages.

In her report, Kimes explains several hospitality revenue management tactics, including those that do not include price manipulation. These non-price techniques include competing on the basis of quality, creating strategic partnerships, taking advantage of your loyalty program, developing additional revenue sources, and developing additional market segments.

Thanks to the support of the Center for Hospitality Research partners listed below, all publications posted on the center’s website are available free of charge, at www.chr.cornell.edu.

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