Management Decisions in Hotels

Decisions further set a benchmark upon which the management and staffs are required to act to attain the goals of the business. The model of decision making enables the business to succeed in the market and remain relevant among the customers as well. Reasonable decisions, therefore, have to be made to enhance continued existence and improved performance of the business. The need for profit, relevance in the dynamic market besides quality services to the customers are some of the factors that necessitate the management to make proper decisions that guide the business to perform efficiently and effectively. Consequently, decisions are the backbone for the prosperity of any business and should, in this case, be made after thorough consultation and insight or rather careful consideration of the current market situation.

In cases where the demand is high, the management should capitalize on high rates to generate maximum profits. Room availability and customer demand are the best factors that contribute to the stability of hotel in terms of financial resources. Circumstances, where there is an event in town also boost the demand for hotel rooms and the management, tend to hike rates and limit the time spent in their hotel rooms to increase chances of frequent attendance. The management reduces the time spent in the hotel by a customer and shoots their rates up because they anticipate a high demand for the available rooms. The move to limit time spent by customers and hike rates is aimed at generating the best possible profits based on the current market situation.

This implies that revenue management is a tool that helps to determine the demand that may arise from customers and use this anticipatory advantage to optimize the revenue collected and improve profits from the available rooms. Revenue management is therefore entirely vested in the idea of selling the best rooms at the best time to the best customers and at the best prices in order to maximally utilize the little inventory available. It depends on the nature of the current market situation and takes advantage of demand at that particular time to offer the best rooms at the best prices to the best customers who are willing to pay for their rooms. Revenue management in hotels basically depends on the following circumstances; where there are fixed amount of rooms to sell prompting a serious decision on how well to handle these rooms in order to generate optimum profits, it also works best in situations where rooms on demand are also perishable and the fact that customers are willing to pay different prices to occupy the same rooms (Ivanov, 2014, 12).

The location of the hotel, group bookings, special events, attractive vicinities, conferences, type of the hotel in terms of comfort and leisure among other factors also influences the revenue management aspect. Since the hotel industry faces a dynamic market prone to constant change in demand and supply, it is prudent for a hotel to hire qualified staffs who will enable it to face well in the market and be in a position to compete. Qualified and skilled personnel produce quality goods and offer the best services that will tend to attract customers through which the sales volume will improve hence an increase in profit margin. Customers, on the other hand, get attracted to hotels that offer them the best services and quality products hence making it a necessity for hotels to look for qualified and skilled personnel.

The qualified and skilled personnel apart from offering quality services brings aboard new ideas which the management relies upon to develop more attractive products to enable the hotel to remain relevant in the industry. They further save the business on training costs since they do not necessarily need to be trained hence financial resources the management would have used to train them is vested in other projects that facilitate the ability of the hotel succeed and generate extra profits ( Mauri, 2013, 9). The room rates are one of the major sources of income that the hotel depends on to run its operations such as paying staff salaries, paying rental fee among other several costs that should be settled for the continued existence of the hotel.

However, these rates cannot be optimal if revenue management is not put in place to guide the whole process as required (Wang, Yoonjoung, Schwartz, Legohérel, and Specklin, 2015, 802). It turns out that the hotel management, therefore, applies revenue management skills to ensure the best possible room rates are charged at the most suitable time and to the best customers who are even willing to be offered the rooms at that particular high price level. The relationship between room rates and revenue management is basically the most important lesson one can learn and apply in the normal life situation because it imparts a person with the real experience he may require to successfully run a hotel business for many years. References Altarawneh, I.