* Lesson 12

... about maximising revenue for all revenue streams that are available in the hotel. The goal is to actively increase guest spending and all departments must align their departmental goals to the overall business objective of the hotellace this with your body text.

​Duplicate this text as many times as you would like.

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​TRM is...

All revenue streams such as rooms, F&B, meetings and events, Spa and gym, are taken into consideration for total revenue management. Every revenue stream has a different cost structure, and the profit margin varies. The goal of the hotel is to maximise its profit. Thus, some business decisions are taken at the expense of an individual revenue stream if they benefit the greater good and bring higher profit margins to the hotel

... the value of what you lose when choosing between two or more options. In Revenue Management, instead of opportunity cost, we use displacement cost in evaluating business options. Displacement cost refers to the lost in potential revenue to the hotel by accepting one piece of business over a competing opportunity. When a hotel accepts a group, it may have to refuse some volume of non-group business as a result

This goes back to fundamentals of RM whereby capacity/inventory sold is perishable. The product and services provided in a hotel cannot be stored for the next day. Revenue not collected on the same day or meal period is lost forever and cannot be generated again on the day

​Fundamentals of Revenue Mgt

The hotel needs to inculcate a revenue management culture into the DNA of the hotel. Every department from manager to staff must be trained and understand what is TRM and how to identify guests who bring the best return. This even starts from HR when hiring staff that are familiar with TRM. Only if organisational goals are aligned and a TRM culture is ingrained, a hotel can succeed at TRM