Exploration of revenue management practices – case of an upscale budget hotel chain

The purpose of this study is to investigate the implementation of revenue management (RM) pricing practices and managers’ perceptions towards this practice in a budget hotel chain and to provide recommendations for improving the adoption of and perception towards this practice.

A single case study method was adopted to conduct an in-depth qualitative research in a hotel organization. In-depth data were collected through semi-structured interviews, observations and documentation.

The research findings indicate that the implementation of revenue management system (RMS): needs to be clearly communicated and made tangible to employees; can impact the profitability of the budget hotel sector and not only mid-scale or luxury sectors; and remains a profit-oriented decision with little consideration for customer outcomes.

The findings may not apply to mid-scale or luxury properties, as the results cannot be generalized to other hotel chains in other countries that apply complex pricing structures. Future research might develop multiple case study design to increase the rigor of the research by focusing on themes or patterns uncovered in a single case study.

The practical application of the study is twofold: the recommendation to maintain ongoing implementation activities, such as designing operational plans and training programs; the recommendation for a RM pricing strategy that maintains positive price fairness perceptions and results in positive behavioral intentions.

This study helps advance our understanding of the characteristics that influence the success of RM implementation in the budget hotel context and provides us with useful insights to design effective dynamic strategies to enhance the implementation process both for the organization and its stakeholders.