Xuan Lorna Wang

Revenue Management: Progress, Challenges, and Research Prospects

ABSTRACT This paper evaluates the main developments of revenue management (RM) over the past decade and discusses RM challenges and research prospects. It examines nine notable emerging themes: total hotel RM, big data analytics, distribution, rate integrity, RM and marketing strategies alignment, social media impacts on RM, RM system, applications of RM in non-traditional service sectors, and RM education and training. We argue that these developments have far-reaching implications for real-world RM practice and anticipate that the topic areas will continue to be popular for hospitality and tourism research in the foreseeable future.

Soundscape and its influence on tourist satisfaction

ABSTRACT The soundscape is a relatively neglected area of study in tourism and to a wider extent the service industries research. This paper examines the relationship between soundscape and tourist satisfaction from a tourist sensory experience perspective. Data were collected in a UNESCO world heritage site in China, which is well known for its unique soundscape. The structural equation model analysis shows that there is a significant correlation between soundscape satisfaction and tourist satisfaction. The analysis of the findings also suggests that sound preference has almost no influence on soundscape satisfaction and tourist satisfaction, while soundscape expectation has a strong influence on tourist satisfaction. This study extends tourism multisensory research by offering insights into the relationship between the soundscape perceptions and tourist satisfaction. The findings also make progressive contribution to destination management studies by validating the relationship between the soundscape and its effects on tourist satisfaction.

Opportunity identification and evaluation in franchisee business start-ups

Purpose The purpose of this paper is to examine franchisees’ business start-ups from an entrepreneurial perspective, adopting a process representative of entrepreneurship to examine opportunity identification and evaluation by franchisees and to analyse factors that influence this process. Design/methodology/approach A qualitative study was employed and data collected using semi-structured interviews with a sample of service industry franchisees in Macau. Findings The study identifies that social networks play a key role in opportunity identification and that franchisees’ goals influence the criteria used and information search activities undertaken while evaluating franchise opportunities. Research limitations/implications The study makes two contributions to franchise literature. It identifies that social networks can serve as substitutes for lack of prior knowledge in franchise opportunity identification. It also identifies the interrelated nature of franchisees’ goals based on the activities and criteria used to evaluate franchise opportunities, and the importance of relational criteria when franchisees lack prior industry knowledge. It therefore also contributes to franchise/entrepreneurship literature by identifying the interrelated nature of the factors contributing to the dynamics of franchise chain growth. Practical implications Franchisors should explore how to better use franchisees’ social networks and identify the longer term goals of prospective franchisees to support market penetration and franchise chain growth. Franchisees are advised to use independent information sources to evaluate franchise opportunities using goal-informed objectives and demand and relational criteria. Originality/value The study presents a more comprehensive understanding of franchisees’ decision-making process when joining franchise chains by identifying the activities undertaken and criteria used to identify and evaluate franchise opportunities.

Influence of perceived city brand image on emotional attachment to the city

Purpose This study aims to examine the influence of perceived city brand image on emotional attachment to the city. The study also compares the effects of perceived brand image of the city on the emotional attachment to the city across two groups: local residents and visitors. Design/methodology/approach A total of 207 usable questionnaires were collected from 107 residents of the city of Bratislava, Slovakia and 100 visitors to the city. Partial least square structural equation modeling (PLS-SEM) method was used for data analysis. Findings This study establishes that perceived city brand image significantly influences emotional attachment to the city. The study concludes that affective city image has a greater impact on emotional attachment to the city among the residents than visitors. By contrast, the influence of cognitive city image on emotional attachment to the city does not vary across the two categories of residents and visitors to the city. Practical implications City tourism marketers should focus on improving city brand images to enhance tourists’ emotional attachment to the city to promote repeat visits among visitors. Originality/value This study contributes to improving understanding of the impact of perceived city brand image on emotional attachment to the city across the two groups, residents and visitors, using social exchange theory (SET). Furthermore, the findings come from a relatively under-researched Central and Eastern European (CEE) region.

Special Issue: Revenue management for tourism and hospitality.

The tourism and hospitality industry started to adopt Revenue Management (RM) practices in the 1980s, with academics fully participating in the process. Various disciplines have since contributed to the development of RM concepts, models, and methods. They include diverse areas such as management science, economics, marketing, information technology, human resource, finance, and computer science to name but a few. As RM practices extend from transportation and hospitality to other retail sectors such as restaurants, cruises, golf, spa, and camp grounds, academic research on the topic has increased significantly, addressing new concerns and emerging issues. Recognizing the growing importance of RM, the Journal of Travel and Tourism Marketing (JTTM) published its first special issue on the topic (referred to as “yield management” at that time) in the early 1990 s. A decade later, RM remains a central issue of interest to industry and academia, and a dynamic and fast growing area of activity, innovation, and prospects. Key new foci areas include the move from a “specific” pricing and inventory management orientation to a more global marketing and strategic management approach, the consideration of the consumer’s total and long-term contribution, the shift from revenue to profit management optimization, and the inclusion of big data analytics. A considerable amount of RM research has been published in the past decade. The objective of this second special issue of JTTM is to reflect on traditional and new issues, and to highlight new research perspectives and progress in RM practices. The first paper, authored by the co-guest editors of this special issue, with a contribution from industry executives, is an overview of recent emerging “hot” RM topics. It discusses the RM areas of total hotel RM, modeling forecasting and big data analytics, distribution channels, revenue integrity, information systems, social media, financial issues, human resources, and non-traditional areas of application. The second and third articles deal with strategy and segmentation. Sigala suggests a market approach for developing RM strategies, while Guillet, Law, and Guo demonstrate the

Hotel Revenue Management: From Theory to Practice

Hotel Revenue Management: From Theory to Practice focuses on bridging the gap between theory and practice. It is a timely addition to revenue management learning resources that provides hotel managers, hospitality management scholars and students with a comprehensive guide. The author explains the fundamental concepts and evaluates revenue management practices in a hotel operating context. The comprehensive book contains 16 chapters. It begins with two chapters introducing revenue management and its economic fundamentals. Chapters 3 to 5 cover hotel revenue management systems, process and metrics. Chapter 6 provides a detailed discussion of market segmentation criteria and the specific segments. The seventh chapter elucidates the information that is required for various dimensions in revenue management processes and the importance of having the right information in order to make good revenue management decisions. Chapter 8 explains the various time horizons at which revenue management is performed, and how these horizons differ from each other. This approach is extended in Chapter 9, which describes various (structural) forecasting methods. Chapter 10 introduces the role of value in pricing and how customers select hotels. Chapters 11 to 13 deliberate on pricing, non-pricing and combined hotel revenue management tools. Chapter 14 elaborates on managing revenues in various hotel revenue management centers. Chapter 15 discusses issues related to ethics and relationship marketing. The monograph concludes with a description and analysis of revenue practices of accommodation establishments in Bulgaria.

Future of perceived price fairness research in hospitality

In this chapter we have provided a comprehensive review of literature pertaining to behavioural pricing and perceived price fairness research in hospitality. The findings presented in previous sections have far-reaching implications on real-world customer-centric revenue management and marketing strategies in a number of areas. First of all, personal fairness is the first opportunity for revenue managers to win over guests. As past and competitor prices are often used as anchor points, aligning rates with these references allows customers to quickly consider a price as fair. Competitive price positioning thus also plays an important role in a value-oriented pricing approach. As guests will be much more accepting of differential pricing when they are familiar with revenue management, it will also be worthwhile to educate guests on the pricing policies of hotels. Secondly, revenue managers need to have a detailed understanding of the value of restrictions and benefits to their different segments. Increasing prices drastically, without adding any value for guests, will push guests to consider this pricing as unfair. If there are price differences, the rates need to be restricted and fenced appropriately. Thirdly, since guests look for who is responsible for unfair prices, it will be useful for revenue managers to communicate this information, as guests consider human motives as less fair than a mechanical cause. Moreover, guests who feel they have a voice and choice in the decision-making process will consider a price as more fair. Revenue managers should therefore ensure that, during the reservation process, guests are able to easily choose their rates. Fourthly, higher awareness of restrictions and benefits at the time of booking leads to a higher perception of fairness. The reservation process should therefore be transparent, meaning that all rates, restrictions, fences, and benefits should be clear during the time of reservation to avoid any surprises at check-out (or check-in). Reservation agents and third-party agents should also be thoroughly checked upon to ensure this. Fifthly, trust acts as a heuristic – it makes consumer decision-making easier and faster. A strong correlation between how well expectations were met for value for money and trust in the hotel group shows the importance of winning over the guests’ perceptions of fairness regarding prices. Revenue management is expected to become more customer-centric, focusing on the lifetime value of the customer and the importance of relationship building rather than the one-time transaction. In this respect, sales and revenue managers need to work together towards the same price fairness goal. Thus, an integrated approach to revenue pricing management and customer relationship management is essential to enable sales, marketing and revenue managers to focus beyond revenue maximisation and work together with all stakeholders to co-create value for customers to sustain incremental profit.