MHC604 Revenue Management Term 2, 2017
Created: Asma Usman Policy Owner: Dean Modifed: Term 2, 2017 Version: 2 Review Date: Term 3, 2017 Page: 1 of 9 This online version is a controlled document. Any printed versions are considered uncontrolled versions of the document.
MHC604 Revenue Management
Unit Learning Outcomes a. Analyse and apply the process of revenue management. b. Critically reflect upon the role and function of automated revenue management systems. c. Make judgments upon the operational requirements and effectiveness of the various components of revenue management. d. Create a hotel forecast resort for accommodation. e. Interpret reports and compose recommendations to achieve revenue management targets. f. Assess and argue in merits of group business based on displacement analysis. g. Prepare and manage a revenue management team meeting.
Assessment Summary
Assessment Type Weighting Due Learning Outcomes
1. Learning Portfolio including case studies, revenue management critique, situational forecasting and a revenue management meeting 3,000 words
40% Week 8 a, b, d, e
2. Group Presentation 20% Week 10 c, f, g
3. Final Exam 40% Week 11 a, b, c, d, e, f, g
Assessment 1 – Learning Portfolio (Case Study Analysis)
Pricing is one of the two strategic levers used to optimize revenue and is, arguably, the most critical component of Revenue Management suggesting that consumers are prepared to pay more to hotels delivering service excellence.
For this assignment, you are to write a 3,000 word Case Study Analysis that recommends a Revenue Management strategy for the financial year July 2017 – June 2018. You will prepare your analysis as if you were the Revenue Manager for the Four Seasons Hotel Sydney. The General Manager has already indicated his concern about the transparent nature of pricing and has requested that your strategy specifically addressing this.
Although this report is based on a real hotel and across a future period, it requires a strong theoretical framework with reference to the literature. It must also account for recent changes and predictable events in the area of revenue management. Current market analysis reports should be included as part of the overall strategy. You can use tables, charts, graphs to support your pricing strategy. Aspects that require critical consideration are: An analysis of market segmentation Competitor set Analysis An analysis of the external environment Demand Forecasting Channel Analysis
MHC604 Revenue Management Term 2, 2017
Created: Asma Usman Policy Owner: Dean Modifed: Term 2, 2017 Version: 2 Review Date: Term 3, 2017 Page 2 of 9 This online version is a controlled document. Any printed versions are considered uncontrolled versions of the document.
Submission Guidelines:
Professional layout and presentation, concise, informative and correctly referenced. Graphs and colour can assist in summarising key points in your report. Typed and formatted following the Assessment Structure Style Guide and uploaded to Turn-it-in on time of the due date. To be submitted in electronic form as a word-processed file to http://www.turnitin.com Students must refer, in text, to a minimum of 12 journal articles, plus others as required, in order to show competency in the assessment. All referencing must be in accordance with APA 6th Edition Referencing and Academic Writing Guide on SharePoint. A school assessment cover sheet to be attached with your paper. See marking rubric at the end of this document and remember you do not need to attach this rubric to your submissions.
Assessment 2 - Group Presentation - Revenue Management Team Meeting
To be effective, Revenue Managers must understand theories of Revenue Management and its connections with other functions in the broader business. This assignment provides you an opportunity to develop effective communication and presentation skills. The Scenario: You are members of a Revenue Management Team (RMT) in a hotel. This is your weekly meeting. In addition to your general weekly reports and considerations, you will need to discuss alternatives to future group business based around a specific event. Requirements: A presentation of 20 minutes in class. The first minute should be an introduction of the scene, hotel in terms of facilities and revenue sources and group members with name and title. An agenda must be tabled/presented at the commencement of the meeting. Include displacement analysis of the potential group reservation. Provide at least two to a maximum of six reports tabled in your agenda. Use these reports to discuss performance to date and future measures. Include discussion on your various channels of distribution.
Submission Guidelines: All supporting documents must be submitted in electronic form as a word/excel/PowerPoint-processed file to http://www.turnitin.com.
Assessment 3 – Final Exam
The final examination will be a closed book examination in the timetabled period of Week 11/12. The questions will cover all topic areas covered in the lectures and tutorials, all the named chapters in the textbook and any readings given throughout the term.
MHC604 Revenue Management Term 2, 2017
Created: Asma Usman Policy Owner: Dean Modifed: Term 2, 2017 Version: 2 Review Date: Term 3, 2017 Page 3 of 9 This online version is a controlled document. Any printed versions are considered uncontrolled versions of the document.
Weekly Lecture and Tutorial Schedule / Readings
Week Topic Learning Objectives Readings
2 Lecture:
Introduction to Revenue Management
Topic 1: Revenue Management as a business process
Tutorial:
Review key concepts Discussion Questions and problems practice
• History of RM • Definition of RM • New Synergy Concept • Conditions necessary for RM to occur • Benefits of a Systematic RM Process • Occupancy, ADR and RevPAR – definitions • A Strategic Approach – IDEAs • The RevMAP
Hayes, D.K. & Miller, A.A. (2011). Revenue management for the hospitality industry. Hoboken, NJ: John Wiley & Sons, Inc. Chapter 1.
Tranter, Stuart--‐Hill, Parker (2009). An Introduction to revenue management for the hospitality industry: Principles and practices for the real world. Upper Saddle River, NJ: Pearson Education, Inc. Chapters 1, 2.
E Andrew Boyd (2006). Revenue management in the airline industry: From gumball dispensers to rocket science. Journal of Revenue and Pricing Management Vol 5, Issues 2, pg. 157.
Sheryl E. Kimes (1989). The Basics of Yield Management. Cornell Hotel and Restaurant Administration Quarterly, Vol. 30, Issue 14, pg. 14--‐19.
3 Lecture:
Topic 2: Pricing
The Strategic levers of Revenue Manage ment:
Pricing Duratio n
Dynamic Valuebased Pricing
Differenti al Pricing
Tutorial:
Review key concepts Discussio n Question s and problems
Examination of the concept of price from the perspective of a seller and a buyer Detailed assessment of why RMs who consider only supply and demand or costs when determining their prices will inevitably make poor pricing choices Discussion of the concept of strategic pricing and the role of the RM in it A detailed examination of how buyers utilize personal value formulas when considering a purchase. A discussion of the roles of quality, service and price in a buyer’s value formula. A rationale for the use of data analysis and personal insight when implementing strategic pricing. Detailed explanation of differential pricing Detailed examination of the eight techniques RMs use to applying differential pricing Review of the evolving terminology used to describe the activities and goals of RMs
Hayes, D.K. & Miller, A.A. (2011). Revenue management for the hospitality industry. Hoboken, NJ: John Wiley & Sons, Inc. Chapters 2, 3, 4.
Tranter, Stuart--‐Hill, Parker (2009). An Introduction to revenue management for the hospitality industry: Principles and practices for the real world. Upper Saddle River, NJ: Pearson Education, Inc. Chapters 3, 8.
Ramarao Desiraju, Steven M Shugan (1999). Strategic Service Pricing and Yield Management. Journal of Marketing, Vol 63, pg. 44‐56.
Kimes, S. (2010). Successful tactics for surviving an Economic Downturn: Results from an International Study. The Centre of Hospitality Research, 2010, 10, 7.
Sheryl Kimes, Richard B Chase (1998). The Strategic Levers of Yield Management. Journal of Service Research, Vol 1, No.2, pg. 156--‐166.
Gabriele Piccoli (2006). The Strategic value of Information; A Manager’s guide to profiting from
MHC604 Revenue Management Term 2, 2017
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practice Information: Cornell Hospitality Reports, Vol 6, No. 7. 4 Lecture:
Topic 3: Inventory and Price Management
Tutorial:
Review key concepts Discussion Questions and problems practice
Detailed examination of how RMs optimize revenue when applying inventory management strategies Candid presentation of the pros and cons of overbooking as an inventory management strategy Detailed examination of how RMs optimize revenue when applying price management principles
Hayes, D.K. & Miller, A.A. (2011). Revenue management for the hospitality industry. Hoboken, NJ: John Wiley & Sons, Inc. Chapter 7.
Tranter, Stuart--‐Hill, Parker (2009). An Introduction to revenue management for the hospitality industry: Principles and practices for the real world. Upper Saddle River, NJ: Pearson Education, Inc. Chapter 9.
Richard D Hanks, Robert G Cross, R Paul Noland (1992). Discounting in the Hotel Industry, A New Approach, Cornell Hotel and Restaurant Administration Quarterly, Vol 33, No. 1, pg. 15‐23.
One eye on the competition: How much should competitors influence your pricing? White paper, IDEAS Revenue Solutions.
5 Lecture:
Topic 4: External Environment Analysis
Tutorial:
Review key concepts Discussion Questions and problems practice
SWOT Analysis Five Forces Model PESTLE Analysis
6 Lecture:
Topic 5: Demand Forecasting
Evaluation of Revenue Management Efforts in Lodging
Competitive Set Analysis
Tutorial:
Review key concepts Discussion Questions and problems
Explanation of why collecting and analysing data about customer demand for lodging products and services are essential for forecasting sales Presentation of the tools RMs use to track historical, current and future demand and for their rooms inventory Examination of how demand forecasts affect decisions on pricing Detailed examination of the primary financial measures of RM performance Explanation of how to read and analyse STAR and similar reports Examination of additional RMrelated performance measures and their uses
Hayes, D.K. & Miller, A.A. (2011). Revenue management for the hospitality industry. Hoboken, NJ: John Wiley & Sons, Inc. Chapters 6, 9.
Tranter, Stuart--‐Hill, Parker (2009). An Introduction to revenue management for the hospitality industry: Principles and practices for the real world. Upper Saddle River, NJ: Pearson Education, Inc. Chapter 6.
Zvi Schwartz and Eli Cohen (2004). Hotel Revenue Management forecasting: Evidence of Expert- Judgement Bias. Cornell Hotel and Restaurant Administration Quarterly Vol 45, Issue 1.
MHC604 Revenue Management Term 2, 2017
Created: Asma Usman Policy Owner: Dean Modifed: Term 2, 2017 Version: 2 Review Date: Term 3, 2017 Page 5 of 9 This online version is a controlled document. Any printed versions are considered uncontrolled versions of the document.
practice
Chih-Chien Chen and Zvi Schwartz (2006). The importance of information asymmetry in customers’ booking decisions: A cautionary tale from the internet. Cornell Hotel and Restaurant Administration Quarterly, Vol 47, Issue 3.
7 Lecture:
Topic 6: Distribution Channel Analysis
Building Better Business
Tutorial:
Review key concepts Discussion Questions and problems practice
Explanation of how distribution channels affect revenue optimization Details about the way lodging industry RMs manage non-electronic distribution channels Details about the way lodging industry RMs manage electronic distribution channels Detailed examination of the keys strategies RMs use to build better business Examination of important revenue optimization issues when market conditions are moderate to strong Examination of important revenue optimization issues when market conditions are weak or distressed
Hayes, D.K. & Miller, A.A. (2011). Revenue management for the hospitality industry. Hoboken, NJ: John Wiley & Sons, Inc. Chapter 8.
Tranter, Stuart--‐Hill, Parker (2009). An Introduction to revenue management for the hospitality industry: Principles and practices for the real world. Upper Saddle River, NJ: Pearson Education, Inc. Chapters 7, 9.
8 Lecture:
Topic 7: Revenue Manager’s Role
Specialized Applications of Revenue Management
Tutorial:
Review key concepts Discussion Questions and problems practice
Explanation of the hard and soft supply constraints faced by RMs in the hospitality industry Examination of the legal and ethical aspects of revenue management Presentation of the typical job responsibilities and reporting relationships of RMs Examination of the characteristics common to those organizations and hospitality-related service businesses that can readily apply revenue management strategies Explanation of the unique responsibilities of multiunit and franchisor-employed RMs Description of the responsibilities of RMs working in the field of destination marketing
Hayes, D.K. & Miller, A.A. (2011). Revenue management for the hospitality industry. Hoboken, NJ: John Wiley & Sons, Inc. Chapters 5, 12.
Tranter, Stuart-Hill, Parker (2009). An Introduction to revenue management for the hospitality industry: Principles and practices for the real world. Upper Saddle River, NJ: Pearson Education, Inc. Chapters 10.
9 Lecture:
Topic 8: Revenue Management for Food and Beverage Services
Detailed review of traditional menu pricing methods Examination of the shortcomings of utilizing only product cost as the basis pricing menu items Overview of selected factors utilized for
Hayes, D.K. & Miller, A.A. (2011). Revenue management for the hospitality industry. Hoboken, NJ: John Wiley & Sons, Inc. Chapters 10, 11.
MHC604 Revenue Management Term 2, 2017
Created: Asma Usman Policy Owner: Dean Modifed: Term 2, 2017 Version: 2 Review Date: Term 3, 2017 Page 6 of 9 This online version is a controlled document. Any printed versions are considered uncontrolled versions of the document.
Evaluation of Revenue Management Efforts in Food and Beverage Services
Tutorial:
Review key concepts Discussion Questions and problems practice
applying differential pricing to foodservice operations Examination of the ways RMs analyse their sources of income by revenue centre, day part, and service style Presentation of methods RMs use to accurately measure and assess increases and decreases in revenue generation Examination of three alternative methods RMs use to evaluate their efficiency in revenue generation
10 Lecture and Tutorial:
Exam Revision
Everything throughout the course All from above
MHC604 Revenue Management Term 2, 2017
Created: Asma Usman Policy Owner: Dean Modifed: Term 2, 2017 Version: 2 Review Date: Term 3, 2017 Page: 7 of 9 This online version is a controlled document. Any printed versions are considered uncontrolled versions of the document.
Assessment Criteria for Case Study Analysis
Criteria: The outcome shows:
Fail = Unsatisfactory performance
Pass = Just Satisfactory performance
Credit = Good quality showing more than satisfactory performance
Distinction = Superior quality demonstrating independent thinking
High Distinction = Outstanding quality showing creativity and originality
Knowledge of theory 30%
Inaccurate or inappropriate choice of theory.
Selection of theory is appropriate but some aspects have been missed or misconstrued.
Most key theories are included in the work in an appropriate straightforward manner.
Insightful and appropriate selection of theory in key areas.
Assignment demonstrates integration and innovation in the selection and handling of theory.
Analysis 30%
Fails to analyse information.
Can analyse a limited range of information with guidance using classification / principles.
Can analyse with guidance using given classification / principles.
Can analyse a range of information with minimum guidance, can apply major theories and compare alternative methods/techniques for obtaining data.
Can analyse new and/or abstract data and situations without guidance using a wide range of techniques appropriate to the topic.
Conclusions & Recommendations 20%
Unsubstantiated/invalid conclusions based on anecdote and generalisation only, or no conclusions at all.
Limited evidence of findings and conclusions supported by theory/literature.
Evidence of findings and conclusions grounded in theory/literature.
Good development shown in summary of arguments based in theory/literature.
Analytical and clear conclusions well grounded in theory and literature showing development of new concepts.
Presentation and Referencing 20%
Unsatisfactory level of presentation quality. None or almost no photos, diagrams etc. Incompetent level of understanding of relevant software. No evidence of any significant idea for presentation. Incorrect citing. No and/or very poor reference list. Presentation quality to a minimal level. Somewhat reasonable level of graphic use: very few photos, diagrams etc, however no context. Very little evidence of an idea for the presentation. Somewhat reasonable understanding of the relevant software. Incorrect citing. Poor reference list. Presentation quality to a competent level. Reasonable level of graphic use, some photos, diagrams, drawings etc. Reasonable evidence of an idea for presentation. Reasonable understanding of the relevant software. Appropriate citing and reference list. Very effective presentation quality. Good use of graphics. Good level of understanding of the relevant software. Good citing and reference list. Variety of sources
Excellent use of graphics (photos, diagrams, tools etc.) Superior understanding of the relevant software. Extremely creative presentation ideas well resolved and implemented. Excellent citing and reference list. Wide variety of quality sources.
Mark range out of 100
0- 49.5 50 - 64 65 -74 75-84 85+
MHC604 Revenue Management Term 2, 2017
Created: Asma Usman Policy Owner: Dean Modifed: Term 2, 2017 Version: 2 Review Date: Term 3, 2017 Page: 8 of 9 This online version is a controlled document. Any printed versions are considered uncontrolled versions of the document.
Assessment Criteria for Group Presentation
Criteria: The outcome shows:
Fail = Unsatisfactory performance
Pass = Just Satisfactory performance
Credit = Good quality showing more than satisfactory performance
Distinction = Superior quality demonstrating independent thinking
High Distinction = Outstanding quality showing creativity and originality
Organisation (25%)
Disorganised. Group not businesslike in approach. No evidence of rehearsal, incompetent use of technology, no back-up copies of files. No evidence of coordination, teamwork or a plan of approach.
Some organisation, but still lacking in professionalism and a businesslike approach. Elements of an acceptable level, but execution still lacks in all requirements to impress at Masters level.
Quite well organised, and businesslike. Clear evidence of organisation and rehearsal. All team members are clear on their roles and au fait with the running order.
Well organised. Business ready. A professional approach, smooth flow, all team members contributing professionally. Clear evidence of sound and good quality preparation.
Very well organised and highly professional in approach. All team members contribute to a slick, well organised presentation which is very well prepared and demonstrates an ability to present in a professional manner in a business environment.
Content (25%)
Little or no reference to theory or research. Lacks arguments. Content does not reflect understanding of sufficient levels of research. Non- existent, erroneous, or extremely limited citation. Lack of industry examples or erroneous information provided.
Some reference to theory and some evidence of research. Arguments only supported to a limited degree. Some suggestion of understanding, but only at a basic level. Basic limited citations/referencing. Poor or irrelevant industry examples.
Reasonable attempts to support arguments, but some evidence lacks clarity, accuracy or correct citation. Some breadth to research and basic links between theory and arguments. Basic industry examples.
Arguments well supported by wide research evidenced by numerous, relevant citations and references. Arguments well made and logical. Clear and logical flow. Counter- arguments introduced and well supported. Good industry examples.
Arguments and ideas very well supported, cited and referenced. Well thought through and well structured ideas, reflecting strategic thinking. Very good industry examples provided from a range of sectors. Logical links and conclusions. Business ready.
Presentation (Visual) (25%)
Not all material is relevant and/or is presented in a disorganised manner.
Material presented is relevant but lacks structure or visual impact.
Material included is relevant to topic and has been structured. Visual aspect of presentation is limited.
Material is carefully structured with clear message and visual effect.
Material is imaginatively presented resulting in clarity of message and information.
MHC604 Revenue Management Term 2, 2017
Created: Asma Usman Policy Owner: Dean Modifed: Term 2, 2017 Version: 2 Review Date: Term 3, 2017 Page: 9 of 9 This online version is a controlled document. Any printed versions are considered uncontrolled versions of the document.
Presentation (oral) (25%)
Material is difficult to understand due to poor structure and/or pace and audibility.
Shows some attempt to structure material for presentation, pace and audibility are satisfactory most of the time.
Clearly structured and addressed to audience. Pace and audibility satisfactory. Visual aids used.
Well-structured and signposted presentation. Audible and pace appropriate to audience. Visual aids used to support the presentation.
Imaginative presentation of material resulting in clarity of message and information.
Mark range out of 100
0- 49.5 50 - 64 65 -74 75-84 85+