Present the concept of competitive set

Explain the meaning and components of competitive intelligence

Describe the process of internal assessment

Identify the elements in a SWOT analysis

Learn hoe to develop strategies based upon the SWOT analysis

3.Economic Principles and Demand Forecasting

Explore the concepts of scarcity and opportunity costs

Illustrate the dynamics of supply and demand and explain how the market reaches equilibrium

Consider the effect of price on substitutes, complements, and inferior goods

Provide the formulas used to calculate the price elasticity of a product or service to determine its price sensitivity

Investigate the impact of price elasticity on consumer spending and revenue

Examine alternative methods for managing demand

Explain the components present in demand forecasting

Answers:

Introduction

Revenue management in the hospitality industry is the process balancing demand and aptitude by antedating prices for the aim of exploiting the usefulness of hotel’s resources. This study would carry out an internal analysis and competitive analysis along with demand forecasting of AccorGroup Hotels (Worldwide) (Lee et al. 2012).

1. An introduction

Price restriction also termed as rate fences, terms and conditions or rate policies can be perceived as logical rules which are developed to allow consumers to divide themselves into proper rate categories according to their requirement, behavior or readiness to pay (Abrateet al. 2012).

Revenue management in hospitality industry is all about becoming the planner of own prosperity. Here, pricing and customer satisfaction remain the most crucial vigorous variable that is theme to hotel revenue management (Yeoman and McMahon-Beattie, 2010).

Revenue management techniques include one-to-one revenue management, total customer value integration and so on. One-to-one revenue management involves predicting the future needs of customers considering their spending behavior and demographics. The second technique focuses on offering rooms based on the present and potential value of every individual guest (Wang, 2012).

2. Internal valuation and competitive analysis

Competitive set is a term used in marketing for recognizing the major group of competitors of an organization. This is applied for market penetration exploration, benchmarking purpose and making positioning strategies (Zhang and Bell, 2012).

Competitive intelligence is the process of outlining, colleting, evaluating and distributing intelligence about goods, competitors, customers and any other environmental side requires to upkeep managers and executives for developing strategic decisions for a company (Line and Runyan, 2012).

Internal assessment is one of the most crucial components of making strategic plans as it includes analyzing data with qualitative material for generating an appropriate outline of past performance. This helps in identifying the key strengths and weaknesses as well as potential opportunities and threats of a company (Leeet al. 2012).

SWOT analysis is also known as SWOT matrix is a organized planning process applied for evaluating strength, weakness, opportunities and threats present in a business venture or project. These components of SWOT analysis can be used for AccorGroup Hotels (Worldwide), the key strength of which, is its presence in over 92 countries and it is one of the leading hotels 2in the world. However, due to catering in all segments, it becomes difficult for customers to connect to Accor as a brand, which is one of its weaknesses. Accord should grab the opportunity of building academies in more nations for introducing an international standard service in every country. The major threat for the organization is rapidly increasing competition in the hotel industry (Accorhotels.group, 2017).

Considering the weakness of AccorGroup Hotels (Worldwide), it can be suggested that, the firm should devise the strategy of concentrating on a particular segment like luxury segment or economy segment. This would help the company to provide more effective services to the guests in order to gain their satisfaction and retention.

3. Economic values and demand estimating

Scarcity is the condition, when a company does not have enough resources to meet the demands and needs of its customers. On the other hand, opportunity cost is the next greatest valued substitute, which is handed over while making a choice (Line and Runyan, 2012).

Market dynamic explains the changing or dynamic price indicators, which results from the constant changes in supply and demand of a specific good or services. Therefore, in hospitality industry, AccorGroup hotels (worldwide) focus on lowering the room rates for increasing demands and to reach to equilibrium (Leeet al. 2012).

With increasing price or decreasing income, customers tend to replace expensive products with less expensive substitutes. Conversely, as income increases, the opposite situation takes place. In terms of complimentary products if the price of the complimentary products goes up, the use of other decrease. For example, if the cost of travelling increases, people will less visit to other countries, which will decrease the hotel business consequently. In the context of inferior goods, the demand goes down when the income of individuals goes up. For example, if income of visitors drops ten they would prefer to take cheaper rooms in AccorGroup Hotels (worldwide). Thus, the demand for expensive rooms would decrease (Zhang and Bell, 2012).

It is an assessment of receptiveness of the amount of a raw material or service necessitated for changing its price. The formula of calculating price elasticity is: e_{(P) = dQ/Q/dP/P} (Wang, 2012)_.

Price reduction may have an indeterminate impact on consumer spending. In some cases, reducing in price is more than balance by a large increase in quantity of demand. If the demand of a product is unit-elastic, price increase does not affect the total revenue. When demand is inflexible, escalation in price leads to increase in revenue (Yeoman and McMahon-Beattie, 2010).

Alternative methods for managing demand include take up action, reduce demand and so on. Demand may exceed the capacity of maximum availability that may loss the potential business (Zhang and Bell, 2012).

Key components of demand forecasting include demand forecasting accuracy, lead-time forecasting, and order-cycle optimization and so on (Abrateet al. 2012).

Conclusion

There are different components and stages involved in revenue management in hospitality industry. Hence, to manage the revenue efficiently and maximizing the profit, AccorGroup Hotels (Worldwide) must consider all the aspects appropriately

References

Abrate, G., Fraquelli, G. and Viglia, G., 2012. Dynamic pricing strategies: Evidence from European hotels. International Journal of Hospitality Management, 31(1), pp.160-168.

Accorhotels.group. (2017). AccorHotels Overview. [online] Available at: https://www.accorhotels.group/en/group/who-we-are/accorhotels-in-brief [Accessed 27 Mar. 2017].

Lee, S.H., Bai, B. and Murphy, K., 2012. The role demographics have on customer involvement in obtaining a hotel discount and implications for hotel revenue management strategy. Journal of Hospitality Marketing & Management, 21(5), pp.569-588.

Line, N.D. and Runyan, R.C., 2012. Hospitality marketing research: Recent trends and future directions. International Journal of Hospitality Management, 31(2), pp.477-488.

Ö?üt, H. and OnurTa?, B.K., 2012. The influence of internet customer reviews on the online sales and prices in hotel industry. The Service Industries Journal, 32(2), pp.197-214.

Wang, X.L., 2012. Relationship or revenue: Potential management conflicts between customer relationship management and hotel revenue management. International Journal of Hospitality Management, 31(3), pp.864-874.

Yeoman, I. and McMahon-Beattie, U. eds., 2010. Revenue management: a practical pricing perspective. Springer.

Zhang, M. and Bell, P., 2012. Price fencing in the practice of revenue management: An overview and taxonomy. Journal of Revenue and Pricing Management, 11(2), pp.146-159.