Competitive Revenue Management (Rm.) Strategies of Five Star Hotels: A Case From Istanbul

Year 2023, Issue: 68, 74 - 84, 20.12.2023

Sahin Osmanoglu , Tevfik Demirciftci

https://doi.org/10.26650/JECS2023-1322784

Abstract

In today’s competitive world, the primary goal of hotels is to generate sustainable profitability. In order to achieve this goal, businesses are required to develop well-designed strategies and policies. Every vacant hotel room leads to a direct loss for the company. Therefore, because of the fixed capacity, capacity utilization and pricing is extremely important for hotels. This study explains the competitive revenue management (RM) practices of 5-star hotels in Istanbul. It investigates how hotels track their competitors, their strategies to gain a competitive advantage, and what factors they consider when determining their prices. The research employed a questionnaire containing pre-prepared RM-related inquiries administered to hotel RM department managers. Additionally, a situation assessment was conducted, drawing insights from the information provided by these managers. This study discovered that every revenue manager involved takes the competition seriously. Revenue managers consider competition to be obtaining the largest share of the available market share. This research anticipates that revenue management will extend its influence beyond room revenue and evolve into a more strategic department. The study underscores the importance of enhancing education and raising awareness about RM to address this gap effectively.

Keywords

Competition, Strategy, Revenue Management, Hotels, Istanbul

References

• Akadiri, S., Eluwole, K. K., Akadiri, A. C., & Avci, T. (2020). Does causality between geopolitical risk, tourism and economic growth matter? Evidence from Turkey. Journal ofHospitality and Tourism Management, 43, 273-277. google scholar
• Aksu, A.A, & Tarcan, E. (2002). The internet and five-star hotels: a case study from the Antalya region in Turkey. International Journal of Contemporary Hospitality Management, 14(2), 94-97. google scholar
• Alrawadieh, Z., Alrawadieh, Z., & Cetin, G. (2021). Digital transformation and revenue management: Evidence from the hotel industry. Tourism Economics, 27(2), 328-345. google scholar
• Buhalis, D. (2000). Marketing the competitive destination of the future. Tourism Management, 21(1), 97-116. google scholar
• Cetin, G., Demirciftci, T., & Bilgihan, A. (2016). Meeting revenue management challenges: Knowledge, skills, and abilities. International Journal of Hospitality Management, 57, 132-142. google scholar
• Chan, C.-S., Nozu, K., & Cheung, T. O. L. (2020). Tourism and natural disaster management process: Perception of tourism stakeholders in the case of Kumamoto earthquake in Japan. Current Issues in Tourism, 23(15), 1864-1885. google scholar
• Creswell, J. W. (2009). Research design: Qualitative, quantitative, and mixed methods approaches (Vol. 4). London, England: Sage google scholar
• Creswell, J. W. (2012). Educational research: Planning, conducting, and evaluating. Boston, MA: Pearson. google scholar
• Creswell, J. W. (2015). 30 essential skills for the qualitative researcher. London, England: Sage google scholar
• Creswell, J. W., & Clark, V. L. P. (2007). Designing and conducting mixed methods research. London, England: Sage google scholar
• Demir, E., & Emekli, G. (2021). Is Airbnb no longer a sharing economy platform? Evidence from Europe’s top 10 Airbnb destinations. Anatolia, 32(3), 470-488. google scholar
• Demirciftci, T., & Belarmino, A. (2022). A cross-cultural study of competitive intelligence in revenue management. Journal of Revenue and Pricing Management, 21(6), 691-699. google scholar
• Demirciftci, T., Cetin, G., & Bilgihan, A. (2017). Coping with RM challenges in hospitality education. Journal of Revenue and Pricing Management, 16, 499-512. google scholar
• Demirciftci, T., Cobanoglu, C., Beldona, S., & Cummings, P. R. (2010). Room Rate Parity Analysis Across Different Hotel Distribution Channels in the U.S. Journal of Hospitality Marketing & Management, 19(4), 295-308. google scholar
• Dimitric, M., Tomas Zikovic, I., & Arbula Blecich, A. (2019). Profitability determinants of hotel companies in selected Mediterranean countries. Economic Research-Ekonomska Istrazivanja, 32(1), 1977-1993. google scholar
• Dorsi, S. (2023). 51 million tourists visited Turkey in 2022. Tourism Review News. Retrieved from https://www.tourism-review.com/greater-number-of-travelers-visited-turkey-news12987 google scholar
• Glaser, B., & Strauss, A. (1967). Grounded theory: The discovery of grounded theory. Sociology The Journal of The British Sociological Association, 12, 27-49. google scholar
• Guillet, B. D., & Chu, A. M. C. (2021). Managing hotel revenue amid the COVID-19 crisis. International Journal of Contemporary Hospitality Management, 33(2), 604-627. google scholar
• Hossain, M. S., Hussain, K., Kannan, S., & Kunju Raman Nair, S. K. (2022). Determinants of sustainable competitive advantage from resource-based view: implications for hotel industry. Journal of Hospitality and Tourism Insights, 5(1), 79-98. google scholar
• Istanbul Directorate of Culture and Tourism (2022). Statistics and report. Retrieved from https://istanbul.ktb.gov.tr/TR-276883/istatistik-ve-raporlar.html google scholar
• Jin, S. T., Kong, H., & Sui, D. Z. (2019). Uber, public transit, and urban transportation equity: a case study in New York City. The Professional Geographer, 71(2), 315-330. google scholar
• Kimes, S. E. (2011). The future of hotel revenue management. Journal of Revenue & Pricing Management, 10(1), 62-72. https://doi.org/10.1057/rpm.2010.47 google scholar
• Kimes, S. E. (2017). The future of hotel revenue management. Cornell Hospitality Report, 17(1), 3-10 google scholar
• Koseoglu, M. A., Mehraliyev, F., Altin, M., & Okumus, F. (2021). Competitor intelligence and analysis (CIA) model and online reviews: Integrating big data text mining with network analysis for strategic analysis. Tourism Review, 76(3), 529-552. google scholar
• Kotler, P., Bowen, J. T., & Makens, J. C. (2006). Marketing for hospitality and tourism. Pearson google scholar
• Lam, C., & Law, R. (2019). Readiness of upscale and luxury-branded hotels for digital transformation. International Journal of Hospitality Management, 79, 60-69. google scholar
• Li, H., Liu, Y., Tan, C.-W., & Hu, F. (2020). Comprehending customer satisfaction with hotels: Data analysis of consumer-generated reviews. International Journal of Contemporary Hospitality Management, 32(5), 1713-1735. google scholar
• McCain,A. 25 hotel industry statistics (2023): Hotel rate trends and market data. Zippia. Retrieved from https://shorturl.at/jwH49 google scholar
• Michael, N., Reisinger, Y., & Hayes, J. P. (2019). The UAE’s tourism competitiveness: A business perspective. Tourism Management Perspectives, 30, 53-64. google scholar
• Mohammed, I., Guillet, B. D., & Law, R. (2014). Competitor set identification in the hotel industry: A case study of a full-service hotel in Hong Kong. International Journal of Hospitality Management, 39, 29-40. google scholar
• Okumus, F., Altinay, L., Chathoth, P., & Koseoglu, M. A. (2019). Strategic management for hospitality and tourism. Routledge. google scholar
• O’Neill, J. W., & Mattila, A. S. (2010). Hotel brand strategy. Cornell Hospitality Quarterly, 51(1), 27-34. google scholar
• Pascual-Fernandez, P., Santos-Vijande, M. L., Lopez-Sanchez, J. Â., & Molina, A. (2021). Key drivers of innovation capability in hotels: implications on performance. International Journal of Hospitality Management, 94, 102825. google scholar
• Rosario, A., & Raimundo, R. (2021). Consumer marketing strategy and E-commerce in the last decade: a literature review. Journal of Theoretical and Applied Electronic Commerce Research, 16(7), 3003-3024. google scholar
• Sanchez-Perez, M., Illescas-Manzano, M. D., & Martmez-Puertas, S. (2020). You’re the Only One, or Simply the Best. Hotels differentiation, competition, agglomeration, and pricing. International Journal of Hospitality Management, 85, 102362. google scholar
• Savoy, K. (2023). Hilton unveils new brand, spark by Hilton, a value-driven offering that proudly delivers reliable essentials and friendly service. Hilton. Retrieved from https://stories.hilton.com/releases/spark-by-hilton-announced google scholar
• Uzar, U., & Eyuboglu, K. (2019). Can tourism be a key sector in reducing income inequality? An empirical investigation for Turkey. Asia Pacific Journal of Tourism Research, 24(8), 822-838. google scholar
• Xia, H., Vu, H. Q., Law, R., & Li, G. (2020). Evaluation of hotel brand competitiveness based on hotel features ratings. International Journal of Hospitality Management, 86, 102366. google scholar
• Xiang, Z., Magnini, V. P., & Fesenmaier, D. R. (2015). Information technology and consumer behavior in travel and tourism: Insights from travel planning using the Internet. Journal of Retailing and Consumer Services, 22, 244-249. google scholar
• Xie, K. L., & Kwok, L. (2017). The effects of Airbnb’s price positioning on hotel performance. International Journal of Hospitality Management, 67, 174-184. google scholar
• Yeoman, I. S., & McMahon-Beattie, U. (2017). The turning points of revenue management: a brief history of future evolution. Journal of Tourism Futures, 3(1), 66-72. google scholar