Revenue management – the contribution of the finance function to profitability

Abstract

Literature in the area of revenue (or yield) management concentrates largely on the operational issues of maximising revenues. The issues of profitability have been considered in recent years but practical attempts to implement an approach which recognises the profitability of different market segments have been problematic. This article considers the literature in the area of profitability and revenue management and then addresses the issues regarding its implementation. The need for accurate financial information is crucial and the provision of this relies on sophisticated systems which will analyse and predict appropriate data. Developments in technology are progressing rapidly and will provide the opportunity to expand the use of information for managers. Given the involvement of the finance function in the design and use of information systems their contribution to this development is now emerging as crucial to this process and the resultant increase in hotel profitability.