Revenue Management for Service Organizations

Chapter 1

Revenue Management: An Overview

Introduction

Revenue management provides organizations with new opportunities to improve their profitability and cash flows. It does this through a combination of sophisticated methods and more refined ways of examining organization processes. We will explain and illustrate these in this book where the focus is on transferring knowledge about revenue management to managers who wish to implement them in practice. Although revenue management is relatively new, whether we know it or not, we encounter revenue management practices almost every day. Consider the following scenarios.

1. A two-star hotel with 120 rooms has two rates: a high rate of $200 per night and a discount rate of $110 per night. Ideally, ...