The city which has been chosen for completing the project work is Sydney which is one of the booming markets for the hotel industry and the entire work will be based on how a new hotel can generate more revenue by taking revenue management strategy. Along with this, there is a description of the hotel Meriton Serviced Apartments World Tower of Sydney. There is some question which has been discussed in this assignment, in order to make people easily understand the market of Sydney and that can be helpful for them to launch a new business in the hotel industry.
Explain why you chose this city to use in your example
The chosen city is Sydney which is one of the most populous and popular cities of Australia. This is also the state capital of New South Wales. This city has played an important role in world economy map and has been ranked number eleven as per the Global Economy Power Index. Sydney has been considered as the gateway to Australia for many international tourists. It is also one of the popular tourist destinations all over the world. The purpose of the visiting Sydney is many like for entertainment, business, and visiting relatives.
The number of domestic visitors which Sydney received at the end of 2016 is 9.0 million who have spent 24.9 million nights in Sydney, (Travel to Sydney, 2016). Naturally, it became one of the most popular cities where profit can be easily gained from hotels business. The city is ideal for non-operating revenue for the hotel business.
Sydney is one of the popular cities where millions of tourists visit every year and they spend a lot of money, the city has many hotels and they have designed their architecture in a unique way to attract tourist and earn maximum revenue. The market is very strong in terms of revenue generation hence the number of a competitor is high in this market and Sydney can certainly be considered as the paradise for the hotel business (Hoque, 2013, p10).
Explain why you chose those hotels to be part of your competitor set, what do they have in common with your hotel?
The hotel revenue management is about deciding their future. Every hotel in Sydney has almost the same architecture, modern facility so the main dynamic variable of earning more revenue is customer service and pricing appropriately. In order to gain more revenue the hotel structure (Uysal et al, 2016.p.13).The number of hotels in Sydney is very high and most of the hotel rooms are designed in the same way and the prices/rate are similar. To ensure good revenue management from the hotel it is very important to make it unique and serve what the customer demands.
The most important thing should be understanding the market and decide a goal how many sales should be done to generate maximum amount revenue. In the hotel Meriton Serviced Apartments World Tower there are many facilities that can impress the customers. On the other hand, there are some rival hotels of Meriton Serviced Apartments World Tower such as Novotel Sydney Darling Harbour, Swissôtel Sydney, Primus hotel Sydney and so on. These rivals’ hotels almost have the same facilities like Meriton Serviced Apartments World Tower but are unlikely to attract a greater number of customers.
The space within this hotel is much more with the presence of a conference and an exhibition hall unlike the other hotels or restaurants. The presence of a vast swimming pool attracts both kids as well as adults. The swimming pool is much bigger as compared to the other hotels. A wide range of gaming facilities are provided to the customers which makes it unique. They offer complimentary breakfasts to their customers during their stay. Apart from this they also maintain their price structure according to the demands of the customers. If any customer has a habit of reading a book or playing games, then those extra facilities could be added to those particular rooms in order to make it more attractive and comfortable for the customer.
The occupancy forecast can be identified as to forecasting skilful techniques thus in this process the hotels develop their skills to give competition to their rival companies by forecasting their rooms and services to attract customers towards them (Legohérel, 2013, p.17). There is a football match on 22 April 2017 in between Sydney swan’s v/s GWS giants.
The occupancy forecast data will be based on, the number of expected available rooms, the number of expected walk in, the number of night stay, the number of non-arrival, the number of expected check out before date, the number of expected check out of the current guest. As the demand is likely to be high in this period so the pricing will be above average in order to attract the upper class people. As the hotel is expected to be full so the provision of complimentary breakfast will be but with a less variety. The gaming zones will have separate price strategy which needs to be paid when people will be willing to play.
The Sydney market is ever growing the market and the demand of hotels room is increasing every day. As per the report made by Tourism Accommodation Australia, the demand for hotels and rooms will increase by 5000 per annum by 2020 and it will certainly give the market a chance to expand in terms of hotels. As the market will expand the demand will expand in such scenario a hotel which is providing a homely environment to the customer can certainly perform more in the competitive market.
Keeping the main aim in mind the particular hotel will constantly work towards more customer satisfaction and with the increasing demand of hotel industry, it will invest in more room which can help the hotel to generate more revenue (Bodea and Ferguson, 2014, p.10). For the hotel, the main focus should be to work on the customer feedback and rectify if there are any flaws in customer service. A successful hotel runs by it goodwill or brand value so the target hotel will continually work towards setting more customer value and will be able to sustain in future competitive hotel market of Sydney and will generate more revenue.
The target market is the most important strategy in terms of revenue generation as target market first separates the proposed market into groups as per their demand and the market which is closest to the product or service can be considered as the target market (Hollensen, 2015, p.10). The target market of Meriton Serviced Apartments World Tower involves the business class people who look for a suitable place for carrying out their conferences.
Their main target is the tourists who come for a vacation here. So, for instance, it can be easily said that the particular hotel should target the main tourist for their marketing campaign, it will certainly help them to gain more customer for their business (Hollensen, 2015, p.15). The business class mainly visits this hotel due to the enormous and spacious conference which accommodates more than one thousand people which is not available in any other hotel (Kotler et al. 2015, p.10)
5.1 How would you react and what revenue management measure would you put in place the demand is slower than anticipated?
The hotel market in Sydney has the highest chances to increase within next few years and definitely all the competitors will work towards producing more and more room and accommodation facility and if the Australian government fails to take control over hotel market then there is a high chance that production will go beyond demand and that will decrease the amount of revenue the particular hotel can earn (Chang, 2016, p.5).
There are few revenue management strataegies which can be taken in order to maintain the revenue generation rates. Basically with the help of RM the hotel can measure their changes which can provide them positive impact. Along with Meriton Serviced Apartments World Tower other hotels of Australia also use this process. There are other measure processes like PAC, Room Type Pace and so on. With the help of 3 strategies like quality innovations, rewards and attending the customers personally. These strategies will help them to gain the loyalty of the customers making them return to this hotel whenever they visit this country. Thus these techniques can be helpful for the hotels to manage their each and every process so that they can attract the customers towards them and also maintain their profit as well.
5.2 How would you react and what revenue and what revenue management measure would you put in place the demand is higher than anticipated?
There are two scenarios which can be taken under consideration for revenue management one is when the demand is slower than anticipated and when the demand is higher than anticipated (Campbell, 2015, p.9). High demand is always good for any business. With the help of revenue management, this hotel has been successful to measure their demands. As the hotel has adopted several facilities in their business as the in this situation the demand of this hotel has become high. In recent days the hotel has been got successful to get the demand of 80% customers. This measure can be done by the hotel with the help of RM process. On the other hand, RM process also makes the hotel understand that they recently sold 413 rooms in a day with occupancy forecast in this forecast they declared that they will give 24/7 services, on the other hand, they also provide Wi-Fi facilities as well.
Conclusion
Sydney has been considered as the booming market of the hotel industry. In Meriton Serviced Apartments World Tower they adopted several segmentations like locally, age and so on and this process helps them to target their customers according to their needs. On the other hand, RM helps the hotels to measure their services and profitability as well. However other hotels of Australia have some similarities with this hotel, thus they need to be very careful on their service quality as well.
References List
Ajspur, M.L. and Jensen, R.M., 2016. Using Fourier-Motzkin Elimination to Produce Efficient Cargomix Models for Revenue Management. In The 28th European Conference on Operational
Bodea, T. and Ferguson, M., (2014). Segmentation, revenue management and pricing analytics. Routledge.
Campbell, J.D. and Reyes-Picknell, J.V., (2015). Uptime: Strategies for excellence in maintenance management. CRC Press.
Chang, J.F., (2016). Business process management systems: strategy and implementation. CRC Press.
Kotler, P., Keller, K.L., Manceau, D. and Hémonnet-Goujot, A., (2015). Marketing management (Vol. 14). Englewood Cliffs, NJ: Prentice Hall.
Legohérel, P. ed., (2013). Revenue management for hospitality and tourism. Woodeaton: Goodfellow Publishers.
McMahon-Beattie, U., McEntee, M., McKenna, R., Yeoman, I. and Hollywood, L., 2016. Revenue management, pricing and the consumer. Journal of Revenue and Pricing Management, 15(3-4), pp.299-305.
Ng, F., Rouse, P. and Harrison, J., 2016. Classifying Revenue Management: A Taxonomy to Assess Business Practice. Decision Sciences.
Putcha, C., Putcha, V., Khani, M. and Tabba, A., (2015). Financial Aspects of Determining Optimal Occupancy Factor (Rate) for hotels based on Probabilistic Analysis. IJMMR, p.39.
Hollensen, S., (2015). Marketing management: A relationship approach. Pearson Education.
Hoque, K., (2013). Human resource management in the hotel industry: Strategy, innovation and performance. Routledge.
Hollensen, S., (2015). Marketing management: A relationship approach. Pearson Education.
Hung, W.T., Shang, J.K. and Wang, F.C., (2015). Exploring the Determinants of Hotel Occupancy Rate: A Dynamic Panel Data Approach. Abstract of Economic, Finance and Management Outlook, 3.
Uysal, M., Schwartz, Z. and Sirakaya-Turk, E. eds., (2016). Management Science in Hospitality and Tourism: Theory, Practice, and Applications. Apple Academic Press.
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