Revenue Management and CRM at Queen's Hotel

Paper Summary:

This paper examines two management concepts called revenue management (RM) and customer relationship management (CRM) that are increasingly used in the hotel and hospitality industry, where competition is most severe and cutthroat. The author evaluates the appropriateness of a RM model and CRM system for the profitability of the relatively small Queen's Hotel at the British Isle of Wight, which is not part of a chain. The paper explains that software is available to support each system. The author concludes by recommending the viability of RM and CRM for the hotel.

Table of Contents:
Introduction
Queen's Hotel
RM & CRM
Critique
RM Package
CRM System
Recommendation

From the Paper:

"The RM model at Queen's Hotel intends to optimize pricing for its room by considering variability over time and capacity constraints. This is run on Excel spreadsheet whose task is precisely to price hotel rooms and set capacities for various room classes. Operated on three phases, the RM model starts by setting the classes of rooms, identifying prices and expected demand as well as the demand elasticity for each class. Elasticity here refers to the percentage increase in demand with a 1 percent increase in prices."

Sample of Sources Used:

• Aldhizer III, C. & Cashell, J. (2004). "Customer Relationship Management: Risks and Controls." Internal Auditor, December 2004.
• Bearden, J.N., Murphy R.O., & Rapoport, A. "Decision Biases in RevenueManagement: Some Behavioral Evidence." Available online at: http://behavioral-org/files/RMPaper1/pdf7
• Chandler, S., JA, S.S. & Jacobs, T. (2004). "Advantage of Real-Time Revenue Management." Journal of Revenue and Pricing Management, Vol. 3, No. 4.
• Crown (2004). "Customer Relationship Management." Available at: http://www.is4profit.com/com/business-advice/it-telecoms/crm
• Gronroos, C. (2004). "Quo Vadis, Marketing? Building and Managing Relationships asValuable Assets." Journal of Marketing Management 10 (5).

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