Introduction
Recent years have witnessed an unprecedented increase in complexity and competition in the hospitality sector, making revenue management an essential component of success ((Hayes et al., 2021). Researchers have employed diverse theoretical frameworks to get the best possible revenue allocation, which aids in identifying crucial elements and strategies for enhancing revenue management. This paper will analyze the theoretical framework employed in an article by Anttikoski (2020) that investigates revenue management techniques in the Finnish hospitality sector.
Article: Anttikoski, T. (2020). Revenue Management Strategies in the Finnish Hospitality Industry.
Theoretical Framework
The revenue management theory serves as the conceptual basis for Anttikoski’s (2020) study. The ultimate objective of this theory, which is centered on the laws of supply and demand, is to achieve maximum revenue by changing prices to satisfy demand. In the aviation industry, revenue management is employed extensively, and in the hospitality sector, it has grown favorably recently. The idea focuses on dynamic pricing, which modifies hotel room prices in response to demand and other outside variables. The study looked at and identified the best revenue management techniques utilized by hotels in the hospitality sector of Finland.
Critique:
Although the revenue management theory appears appropriate given the subject of the study, there are certain shortcomings in its implementation. To begin with, revenue management is an emerging concept in the hotel sector, and not everyone utilizes it (Hayes et al., 2021). The study’s findings may not be as broadly applicable as they may be because not all hotels in Finland may have used revenue management techniques. Furthermore, the theory is predicated mostly on the concept that there is a steady demand for hotel rooms and that pricing can be modified appropriately. This could not always be the case, though, as demand can be greatly impacted by outside variables like political or economic instability. This can lead to incorrect price decisions, which would cost the hotel funds.
Additionally, technology and data play a major role in revenue management methods. Small and independent hotels may lack the funding necessary to purchase advanced revenue management systems (Alrawadieh et al., 2021). This therefore restricts the theory’s application to different kinds of hotels. Furthermore, while the study concentrates on hotel revenue management strategies, it makes no discussion of how hotel management can put these strategies into practice. This might be a serious study gap since, in the absence of explicit instructions and recommendations, hotel managers might find it difficult to put the theory’s ideas into practice.
Deficiencies
The primary shortcomings of the revenue management theory employed in this study, as per the previously noted critique, are its restricted relevance in the hotel sector and the presumption of steady demand. The hospitality sector is highly competitive, as was already noted, and not every hotel has the means or expertise to implement revenue management techniques. Furthermore, especially in uncertain times, the presumption of constant demand might not always hold. This can lead to poor pricing selections, which could negatively impact the hotel’s revenue stream.
Another major shortcoming in the study is the absence of helpful guidance for putting revenue management techniques into practice. The efficient application of revenue management methods is critical to their success, and hotel managers may find it difficult to apply the theory’s concepts in the absence of clear guidelines and recommendations.
Conclusion
In conclusion, the revenue management theory has some significant weaknesses in its application, even though it seems appropriate for the study’s focus. More research is required to examine how other theoretical frameworks or a blend of ideas might offer a more comprehensive grasp of revenue management within the hospitality sector. Furthermore, studies that offer valuable guidance for applying revenue management techniques into practice in hotels could close the knowledge gap between theory and reality.
References
Anttikoski, T. (2020). Revenue Management Strategies in the Finnish Hospitality Industry.
Alrawadieh, Z., Alrawadieh, Z., & Cetin, G. (2021). Digital transformation and revenue management: Evidence from the hotel industry. Tourism Economics, 27(2), 328-345.
Hayes, D. K., Hayes, J. D., & Hayes, P. A. (2021). Revenue management for the hospitality industry. John Wiley & Sons.
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