Global survey of 300 Revenue Managers demonstrates that they are facing the same issues all over the world

1 April 2009 � Revenue management (RM) has been practiced in the hotel industry for over twenty years and has been adopted by nearly all of the major hotel chains and many independent hotels. With the recent economic downturn, many hotel revenue managers have been struggling with how best to manage declining demand and the pressures to reduce rate.

Sheryl E. Kimes, Ph.D., the Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell Nanyang Institute of Hospitality Management presented the findings of a study as to what RM professionals consider to be the most important issues facing RM, how they have changed the way in which they manage revenue and what they view as the future of RM at the recent Eye for Travel conference in Singapore.

Kimes discussed how the Guest length of stay was down significantly the world over and that respondents had reported that customers were booking their reservation much closer to their arrival date, found to be significantly shorter than last year. Not surprisingly, respondents also said that hotel occupancy, ADR and RevPAR were significantly lower than last year.

The current top four issues faced are customer rate resistance, contract renegotiations, competition and price wars. Respondents were also asked three open-ended questions on the most important issues facing RM, the changes in RM practice that they had observed over the previous year, and their vision of the future of RM. By far the most frequent comments had to do with pricing.

One representative comment was that �Hotels that still haven�t learned that dropping rates will not recover enough revenues to cover the discounting. These just cause price wars in the long run.� Price wars were the most frequently mentioned issue. Respondents commented about the pressure they felt to reduce price to maintain market share and stay competitive. Many also talked about how price wars can ultimately affect the brand image of a hotel.

As to Rate Integrity, respondents said that a lot depended on their �ability to convince owners and GM�s to hold rates to protect current and future integrity.� Marketing concerns were represented by the comment that �Given the current and expected economic situation, a major issue will be how to maximize revenues in situations where properties are not always full. Of course looking for new channels will be important and perhaps introducing new very low rates. Just as important at least will be the ability to determine what price or prices to charge to maximise revenue on any given night whether or not this price is one that fills the property.�

Kimes spoke about a number of non-price and price methods that hotel revenue managers can use to successfully survive the economic downturn. The goal of RM is still the same, to maximize revenue; all that has changed is that there is less demand than before. Revenue managers should concentrate on the fundamentals and remember that RM is about selling the right room, at the right price and for the right time so that they maximize long-term revenue.

- ENDS �

Media Contact: Ms Illka Gobius Verve MPR Pte Ltd Tel: +65 6728 3820 Email: pr@verve.com.sg

CNI CONTACT: Ms Sonali Deuskar Cornell-Nanyang Institute of Hospitality Management Tel: +65 6790 5800 Email: spdeuskar@ntu.edu.sg

About Cornell-Nanyang Institute of Hospitality Management The Cornell-Nanyang Institute of Hospitality Management (CNI) is jointly operated and governed by Cornell University�s School of Hotel Administration and Nanyang Technological University�s Business School. Located in Singapore, CNI is strategically positioned to develop leaders, managers and entrepreneurs for the Asian hospitality and tourism industry. CNI offers three hospitality education programs designed to alleviate the severe shortage of qualified talent that is currently plaguing the hospitality industry in Asia and the Middle East.

Equivalent to an MBA, the one year Master of Management in Hospitality (MMH) program prepares students to be theory-based, action-oriented leaders of executive management teams and entrepreneurial ventures in the hospitality and service industry. CNI MMH students spend six months at Cornell University in Ithaca, New York and six months at the Nanyang Technological University in Singapore, thus taking advantage of educational and networking opportunities in both Asia and North America in a single year.

The Professional Development Program (PDP) offers three-day courses that cover different aspects of hotel management. PDP teaches cutting-edge management techniques, presented by internationally recognized faculty members and industry leaders. Participants can earn Cornell certifications in Financial Management, Food, Beverage, and Restaurant Management, General and Strategic Management, Human-Resource Management, Marketing, Operations Management and Property-Asset Management and Real Estate. CNI has hosted over 1000 PDP participants from nearly 40 countries in the last two years. The PDP will be held from July 23 to August 5, 2009 in Singapore.

The General Managers Program (GMP) is designed for hotel general managers of full service hotels and their immediate successors. Participants in this 10-day program concentrate on strategic hospitality management issues, work collaboratively to expand the foundation of their knowledge, and produce new solutions to the challenges they face. GMP 2009 in Singapore will be offered from July 20-30, 2009.

Please visit the Cornell-Nanyang Institute of Hospitality Management website www.cni.ntu.edu.sg for more information.