Author: Sun, Li
Title: What can small and medium-sized independent hotels do to improve revenue management ? An empirical study from China’s hotel industry
Advisors: Hon, Alice (SHTM)
Degree: DHTM
Year: 2023
Subject: Revenue management -- China
Hotel management -- China
Small business -- China
Hong Kong Polytechnic University -- Dissertations
Department: School of Hotel and Tourism Management
Pages: ix, 134 pages : illustrations
Language: English
Abstract: Revenue management (RM) initially applied by the airline industry and later implemented in hotel chains in late 1980. The concept of RM adoption by hoteliers contributes to the hotel’s financial results. However, RM-related research is sparse in China. Studies about small and medium-sized (SMS) independent hotels are even fewer. RM is one of the widely researched topics in Europe and North America. The main topics are pricing strategy, demand modeling and forecasting, business analysis, performance analysis, evaluation, inventory and price optimization, setting booking controls, and distribution channel management. Few research published focuses on the RM organizational structure in the SMS independent hotels sector.
This study uses qualitative research methods to study the RM organizational structure of SMS independent hotels in China to fill research gaps and find guidance for SMS hotel operators to design or improve their RM-related organizational structures. After interviewing 21 hotel practitioners, five RM consultants, and four account managers of online travel agencies (OTA), the results show that the development level of the RM of the interviewed SMS independent hotels is seriously uneven. Some hotels implement RM by hiring a dedicated revenue manager and using specialized software. In contrast, most hotels still have a severe lack of awareness of RM. Currently, there are three basic structures in SMS independent hotels in China, which are as follows: (a) employing a dedicated revenue manager to report directly to the general manager(GM) or to the director of sales and marketing(DOSM); (b) no dedicated revenue manager; and (c) RM is undertaken by the GM and head of sales and marketing or by the front office manager. The main reason hotels do not hire a dedicated revenue manager is that a hotel is too small and does not need one or needs to save labor costs.
From the interviews with hotel practitioners, RM consultants, and OTA account managers, the general advice was that RM can be positioned in the sales and marketing department, with reports going to the DOSM for SMS independent hotels if the hotels have such a position. However, there was no unified organizational structure for all the hotels. How to position RM in SMS independent hotels and clearly distinguish the business control authority of the leaders of RM and sales and marketing, who both report to the GM, may be the key to solving the structural problems related to hotel RM. Hotel practitioners should understand the difference between job description and position description. Moreover, SMS independent hotels in China start RM in the context of digital technology, which is different than chained international hotels. A framework is established as a tool for hoteliers to examine RM-related organizational design based on the literature. RM activities for SMS hotels during COVID-19 are also discussed.
It is not clear if the conclusions of this study can be extended to the whole industry in China. The hotel sample size is small for this study, as 21 hotel practitioners were interviewed, but all questions were answered thoroughly. Perhaps, a longitudinal study would be helpful in this kind of study, as hotel staff are cautious about interviews. It may be better to adopt a mixed method to collect enough questionnaires for quantitative analysis, then combine this with qualitative research and interviews to get a more accurate judgment.
This study filled the research gap of more minor academic studies on RM-related organizational structures in SMS independent hotels in China and provides suggestions for future research.
Rights: All rights reserved
Access: restricted access

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