Research Summary

I. What is RM?

• (Concept of RM) RM stands for selling the right product to the right customer at the right time through the right distribution channel and at the right price. (Importance of RM) Given the hotel industry's characteristics, where fixed costs are high and variable costs are low, maximizing profit through revenue management rather than cost management is crucial. (Components of RM) RM consists of demand forecasting, price-based RM, and capacity-based RM, and these three components must be organically integrated to achieve profit maximization.

II. Price-based RM

• (Importance of Price-based RM) Hotel room prices are significantly affected by external factors. Therefore, there is a need to maximize profit by responding flexibly when opportunities for revenue arise. 
• (Classification of Price-based RM) Pricing methods can be classified according to strategic priorities.
  • Goal-oriented pricing: Occupancy-based pricing, Sales-based pricing 
  • Market position-oriented pricing: Competitor-based pricing, Customer-based pricing 
• (Scientific perspective of Price-based RM) Traditionally, pricing models have evolved based on optimization methods, but recent advancements in AI technology have led to research on deep learning and reinforcement learning-based pricing models. 
• (Factors influencing room price) Room prices are influenced by a combination of various internal and external variables within the hotel environment. The impact of these variables varies depending on the characteristics of the hotel and the country or region in which the hotel is located. 
• (Performance metrics) Performance metrics for evaluating pricing models include model-oriented, business-oriented, and benchmark metrics.

III. Current State of Price-based RM Utilization

• (Current state of Price-based RM utilization in the hotel industry) The adoption of RM is becoming more active in the hotel industry to respond to uncertain demand and market diversification.
  • Global chain hotels are developing their own RMS for pricing, while hotels without their own RMS are adopting external RMS.
  • Even with the use of RMS, the final price is adjusted by the price decision-maker rather than being the price suggested by the RMS. 
  • Small properties or individual properties that find the introduction of expensive RMS burdensome usually rely on the owner's know-how and experience to determine prices. 
• (Current state of RMS) Various RMSs have emerged to facilitate efficient decision-making, generally offering price optimization, market intelligence and forecasting, dashboards and reporting, and system integration features.

IV. Recommendations and Prospects for Price-based RM

• (Optimal Price-based RM recommendations for different levels of hotels) Depending on the data available for use by hotels and whether they use RMS services, six types can be classified (basic type, big data utilization type, competitor information-based type, basic RMS type, advanced RMS type, and premium RMS type). 
• (Future of Price-based RM) Advances in generative AI will have a significant impact on the RM industry and will continue to develop in new forms.