The impact of revenue management on hotel key account relationship development

Abstract

Purpose

This paper aims to address an identified gap in hospitality literature. It examines hotel key accounts' perceptions towards revenue management practice and its impact on key account relationship development.

Design/methodology/approach

A qualitative research approach was adopted for the investigation through in‐depth interviews with account managers from an international hotel company and its key accounts from nine international companies across three main market segments: airlines, corporate and leisure.

Findings

The findings of this study show that revenue management practice has reduced relationship stability and the trust between hotels and their key accounts due to a number of reasons. These include: opportunistic behaviour such as unexpected contract rate increases and/or blocked room availabilities during high‐demand days; imposed contractual restrictions; and undisclosed cheaper rates being available via other distribution channels from the same hotel.

Research limitations/implications

The findings provide limited evidence of total commitment between the two parties and support the “states theory” of relationship development, which appears to be more applicable than the “stages theory” since the hotel key relationships did not necessarily follow a predictable stage‐by‐stage development process and any major incidents could lead to an abrupt termination of the relationship. The in‐depth research findings are limited to one international hotel company's key accounts, which cannot be generalized since it lacks the breadth required for comparability with other organisations.

Originality/value

This paper bridges the gap between revenue management and key account relationship management literature by providing an insight into the key clients' perceptions towards the effects that hotel revenue management practice has had on relationship development.

Citation

Lorna Wang, X. (2012), "The impact of revenue management on hotel key account relationship development", International Journal of Contemporary Hospitality Management, Vol. 24 No. 3, pp. 358-380. https://doi.org/10.1108/09596111211217860