Hotel Revenue Management Theories and Applications

How to sustain hotel business operation particularly during the economic recession becomes the most significant concern of hoteliers. Hotel revenue management is discussed in this paper. By analyzing hotel revenue management based on price discrimination and expected marginal revenue theories, the article uses examples in hotel operation to illustrate the applications of hotel revenue management. The study also examines the revenue per available room (REVPAR) as a measurable indicator of hotel revenue management. Industry records show successes of hotel revenue management. This paper concludes that revenue management will provide a critical contribution to the operational effectiveness of hotel enterprises in China with regards to pricing policy and room inventory control.