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Publication date: 16 July 2019

James W. Hesford, Michael J. Turner, Nicolas Mangin, Charles R. Thomas and Kelly Hoffmann

This study examines how firms’ use of competitor-focused accounting information, specifically competitor monitoring information, impacts their pricing, demand, and overall…

Abstract

This study examines how firms’ use of competitor-focused accounting information, specifically competitor monitoring information, impacts their pricing, demand, and overall revenue performance. The monitoring activities examined are the scope of monitoring, monitoring above and below one’s own hotel class (i.e., market segment), and the extent of reciprocity of monitoring. Competitor analysis is a central element in strategic management accounting (SMA), yet little empirical research has been done since companies do not disclose competitor monitoring activities. Proving the value of competitive monitoring provides strong support for SMA. Archival, proprietary monitoring information regarding pricing, demand, and revenue were obtained from one of the largest hotel markets in the United States. Using regression, we modeled the relationships between performance measures (pricing, demand, and revenue) and monitoring behaviors, while controlling for quality (hotel characteristics and management skill), competitive intensity, hotel class, geographic location, and ownership type. Our results indicate that two aspects of competitor monitoring impact hotel pricing that, in turn, impacts hotel demand and revenue performance. Specifically, a hotel monitoring more competitors (what we refer to as Scope) achieves higher prices with unchanged demand, resulting in higher revenue performance. Most hotels monitor within their class. However, deviating from one’s class has profound outcomes: looking at lower (higher) quality hotels results in a hotel setting lower (higher) prices, resulting in higher (unchanged) demand and lower (higher) revenue performance. Surprisingly, we did not find support for the reciprocity of monitoring. That is, whether the competitors monitored by a hotel, in turn follow the target, has no impact on hotel revenue performance outcomes. While the SMA literature notes the importance of competitor monitoring, this study fills a gap in an important, under-researched area by documenting the link between competitor monitoring behaviors and organizational revenue performance. This may help promote greater diffusion of SMA practices.

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Article
Publication date: 3 September 2018

Michael Schuldt and Jose Vega

The purpose of this study is to examine the association between revenue-based earnings management in the periods immediately before and after firms’ initial public…

Abstract

Purpose

The purpose of this study is to examine the association between revenue-based earnings management in the periods immediately before and after firms’ initial public offerings (IPOs) and regulatory scrutiny by the United States Securities and Exchange Commission (SEC) during review of IPO firms’ registration statements.

Design/methodology/approach

This paper uses conditional discretionary revenues (Stubben, 2010) as its measure of earnings management, and revenue recognition comments delivered by the SEC as its measure of regulatory scrutiny. The authors use ordinary least squares regression (OLS) models, as well as a supplemental count model, to assess the association between conditional discretionary revenues and revenue recognition comments delivered by the SEC.

Findings

This study finds evidence of a positive association between earnings management measures in the pre-IPO period and the number of revenue recognition comments received by those firms during the SEC’s review. Furthermore, this study provides evidence that greater numbers of comments are associated with declining earnings management measures in the post-IPO period. However, the evidence suggests that these associations apply only to income-decreasing earnings management.

Originality/value

This paper extends the IPO earnings management literature by using conditional discretionary revenues as the measure of earnings management, and contributes to a nascent research stream in the accounting literature by investigating the SEC’s comment letter process and its association with, and impact upon, earnings management in the IPO process.

Details

Accounting Research Journal, vol. 31 no. 3
Type: Research Article
ISSN: 1030-9616

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Article
Publication date: 20 February 2009

Xuan Lorna Wang and David Bowie

This paper aims to explore the links between revenue management and business‐to‐business (B2B) relationships and explains how revenue management can both support and…

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6647

Abstract

Purpose

This paper aims to explore the links between revenue management and business‐to‐business (B2B) relationships and explains how revenue management can both support and damage B2B relationships.

Design/methodology/approach

A single case study method was employed to conduct qualitative research into a company and its key accounts. In‐depth data were collected from three divergent sources (company revenue managers, company account managers and nine of the company's key accounts) through semi‐structured interviews, observations and document studies.

Findings

The research findings reveal that from the company's perspective, managers acknowledge that revenue management has positively influenced the process of identifying and analysing key account activities and conducting contractual decision making with key accounts. However, from the key accounts' perspective, revenue management practices were found to have significant negative consequences which damage trust and undermine long‐term relationships and commitment.

Research limitations/implications

Although the research findings cannot be generalised to other service sectors because of the single‐case study research method, the implications of this study suggest that the impact of revenue management practice on B2B relationships should be further investigated in a wide range of organisational and industry settings.

Practical implications

The research findings confirm the long‐held assumption that revenue management can negatively affect B2B relationships. The benefits of revenue management primarily reward the company, whilst long‐term B2B relationship development suffers from the short‐term consequences of the company's opportunistic behaviour.

Originality/value

This paper bridges the gap in the literature between revenue management and key account management. It also explores the conceptual incompatibility between revenue management and a long‐term relational approach to B2B relationships and provides evidence to support this proposition.

Details

Journal of Services Marketing, vol. 23 no. 1
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 16 April 2019

Jason Tang, Toni Repetti and Carola Raab

Restaurants typically have small profit margins and with the pressure of increasing food and labor costs, management is looking to revenue as a way to maintain and drive…

Abstract

Purpose

Restaurants typically have small profit margins and with the pressure of increasing food and labor costs, management is looking to revenue as a way to maintain and drive profits. One technique to increase revenue is through revenue management practices, but management needs to be aware of their customers’ reactions to these practices prior to implementation. The paper aims to discuss this issue.

Design/methodology/approach

This study utilizes linear regression to determine the impact of select restaurant revenue management practices, customers’ familiarity with revenue management in general and in restaurants specifically, and customers’ demographics on perceived fairness of revenue management practices in casual and fine-dining restaurants.

Findings

Results indicate that customers find certain restaurant revenue management practices, such as charging premium prices on certain days of the week, fair in both casual and fine-dining restaurants, while others are not in either. Non-refundable reservation fees were found to be fair for fine-dining establishments only. Increased familiarity with restaurant revenue management was associated with higher perceptions of fairness for both casual and fine dining. Age was the only demographic studied that affected perceived fairness.

Originality/value

This study is the only known study to simultaneously evaluate the impact of price and duration restaurant revenue management techniques in combination with customer demographics and revenue management familiarity on consumer perceptions of fairness.

Details

Journal of Hospitality and Tourism Insights, vol. 2 no. 1
Type: Research Article
ISSN: 2514-9792

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Article
Publication date: 4 November 2013

Frederick Ng, Julie A. Harrison and Chris Akroyd

The purpose of this paper is to develop a framework for the systematic examination of management accounting practices in small businesses using a revenue management

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3388

Abstract

Purpose

The purpose of this paper is to develop a framework for the systematic examination of management accounting practices in small businesses using a revenue management perspective. This highlights the multi-faceted nature of size as a contextual factor and emphasises the role of management accounting in supporting profit-oriented decision-making, rather than its traditional role of co-ordination, control, and accountability.

Design/methodology/approach

The framework is theoretically derived from the management accounting, revenue management, and small business literature. An illustrative case study of a small fast-food business is presented to demonstrate the applicability of this framework to practice.

Findings

The paper identifies that various dimensions of business size have different and sometimes opposing effects on management accounting practices. Given heterogeneity is a common feature of small businesses, the framework considers alternative specifications of the size contingency variable.

Research limitations/implications

The synthesis of small business characteristics and revenue management perspective offers a more incisive understanding of what has traditionally been considered a simple practice. The case study illustrates some of the influences of small business characteristics identified in the framework. Given its narrow scope, the findings are used for theorisation rather than offering generalisable results. Further cross-sectional comparisons of small businesses are needed to confirm size influences.

Practical implications

The framework can assist practitioners to gauge the strengths and weaknesses of their management accounting practices and can help assess the value of adopting more sophisticated management accounting practices, given their particular business environment. A synthesis of these small business attributes can help practitioners identify key barriers to implementation.

Originality/value

The revenue management perspective and the inclusion of key characteristics of small businesses provide a new approach to evaluating management accounting practices in small businesses.

Details

Meditari Accountancy Research, vol. 21 no. 2
Type: Research Article
ISSN: 2049-372X

Keywords

Content available
Article
Publication date: 9 July 2021

Ben Vinod

The static world of flight scheduling where schedules rarely change once published is becoming more responsive with schedule change updates leading up to the departure…

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1741

Abstract

Purpose

The static world of flight scheduling where schedules rarely change once published is becoming more responsive with schedule change updates leading up to the departure date due to demand volatility and unpredictable demand patterns. Innovation in cash flow generation will take center stage to operate the business in these uncertain times. Forecasting demand for future flights is a challenge since historical demand patterns are not meaningful which requires a new adaptive robust revenue management approach that monitors key metrics, detects anomalies and quickly takes corrective action when performance targets cannot be achieved.

Design/methodology/approach

The novel COVID-19 pandemic decimated the travel industry in 2020 and continues to plague us with no end in sight. With the steep drop in revenues, airlines need to adapt to a new marketing planning process of scheduling, pricing and revenue management that is more nimble to adapt quickly to changing market conditions. This new approach will continue to be relevant in a post-COVID-19 world during and after economic recovery.

Findings

A methodology for airline revenue planning: scheduling, airline pricing and revenue management, has been proposed that will also work in a post-COVID-19 era.

Research limitations/implications

The limitation of the proposed model is that it needs to be applied in practice to determine the true benefits of this novel approach to airline revenue planning.

Practical implications

Flight scheduling will rely more on clean sheet scheduling, schedule revisions and close in refleeting to better match demand to supply. The office of the chief financial officer will have a permanent task force to monitor cash flow and come up with innovative solutions to generate cash flow for liquidity. Adaptive robust revenue management workflows will be integrated into traditional revenue management workflows in the future for competitive advantage.

Social implications

In a post-COVID-19 world it is anticipated that airline business processes will transform to be nimbler and more proactive in making timely decisions at a greater velocity.

Originality/value

The approach to airline revenue planning for scheduling, pricing and revenue management is a new business process that does not exist today at scale in the airline industry.

Details

Journal of Tourism Futures, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2055-5911

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Article
Publication date: 14 August 2017

Paul A. Willie

This paper aims to recommend opportunities for professional sport leagues in the USA and Canada to apply the art and science of revenue management in order to minimize…

Abstract

Purpose

This paper aims to recommend opportunities for professional sport leagues in the USA and Canada to apply the art and science of revenue management in order to minimize potential losses and maximize profits.

Design/methodology/approach

The evolution of current key revenue management concepts is presented from their initial stages to their current level of implementation. In addition, the literature regarding the strongest business models is reviewed and examined in the context of current successes and challenges across the major sport leagues in North America.

Findings

Five revenue streams in sports organizations are identified and analysed. Five key elements for revenues are highlighted as strategic tools used to maximize effectiveness in achieving revenue management goals. A series of recommendations is made to best use revenue management including careful negotiation of television contracts, the use of dynamic pricing models, maximization of partnerships and sponsorships, acceptance of new approaches to food and beverage and accessibility of sport merchandise to customers.

Practical implications

At the regional, national and international levels, sports organizations should review their current business practices to identify areas to improve their revenue management in light of the recommendations in this paper.

Originality/value

Although the use of the concept of revenue management in sectors of tourism has evolved since early 1970s, its application in professional sports is relatively new. Therefore, this paper provides value to professional sports organizations to optimize their profitability.

Details

Worldwide Hospitality and Tourism Themes, vol. 9 no. 4
Type: Research Article
ISSN: 1755-4217

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Article
Publication date: 17 December 2018

David Egan and Natalie Claire Haynes

The purpose of this paper is to investigate the perceptions that managers have of the value and reliability of using big data to make hotel revenue management and pricing…

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1334

Abstract

Purpose

The purpose of this paper is to investigate the perceptions that managers have of the value and reliability of using big data to make hotel revenue management and pricing decisions.

Design/methodology/approach

A three-stage iterative thematic analysis technique based on the approaches of Braun and Clarke (2006) and Nowell et al. (2017) and using different research instruments to collect and analyse qualitative data at each stage was used to develop an explanatory framework.

Findings

Whilst big data-driven automated revenue systems are technically capable of making pricing and inventory decisions without user input, the findings here show that the reality is that managers still interact with every stage of the revenue and pricing process from data collection to the implementation of price changes. They believe that their personal insights are as valid as big data in increasing the reliability of the decision-making process. This is driven primarily by a lack of trust on the behalf of managers in the ability of the big data systems to understand and interpret local market and customer dynamics.

Practical implications

The less a manager believes in the ability of those systems to interpret these data, the more they perceive gut instinct to increase the reliability of their decision making and the less they conduct an analysis of the statistical data provided by the systems. This provides a clear message that there appears to be a need for automated revenue systems to be flexible enough for managers to import the local data, information and knowledge that they believe leads to revenue growth.

Originality/value

There is currently little research explicitly investigating the role of big data in decision making within hotel revenue management and certainly even less focussing on decision making at property level and the perceptions of managers of the value of big data in increasing the reliability of revenue and pricing decision making.

Details

International Journal of Quality & Reliability Management, vol. 36 no. 1
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 9 November 2012

Kate Varini, Pavan Sirsi and Sarah Kamensky

Revenue management has grown in popularity and is now a widely accepted discipline that has brought about significant improvements to businesses worldwide. With…

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1135

Abstract

Purpose

Revenue management has grown in popularity and is now a widely accepted discipline that has brought about significant improvements to businesses worldwide. With globalisation in recent times, there is now space for international hotels, fast food restaurants, automobile companies and other brands to offer their products in India. Educating people who are going to be part of such a process is a huge challenge. The aim of this paper is to present some of the challenges businesses and communities have to overcome.

Design/methodology/approach

The paper uses secondary sources to explore possible approaches to rapidly stimulate the uptake of revenue management through partnerships between hospitality and tourism businesses.

Findings

A growing middle class population and access to better education presents an opportunity to build a wider range of profitable services. Global brands with already established revenue management practices are in a position to share skills and knowledge with new and smaller players. Partnerships will be essential to rapidly and effectively develop the skills and knowledge required, starting with those in educational fields where the resources are already in place.

Originality/value

Revenue management has not been deployed widely in India. Being able to learn from the early adopters would allow Indian firms to leapfrog over issues and barriers, thus implementing practices more rapidly and effectively.

Details

Worldwide Hospitality and Tourism Themes, vol. 4 no. 5
Type: Research Article
ISSN: 1755-4217

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Article
Publication date: 15 February 2019

Basak Denizci Guillet and Xinchen Shi

The purpose of this study is to understand how and to what extent Hong Kong hotels have integrated customer relationship management (CRM) into their revenue management

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1504

Abstract

Purpose

The purpose of this study is to understand how and to what extent Hong Kong hotels have integrated customer relationship management (CRM) into their revenue management (RM) practices at individual customer level.

Method

Semi-structured interviews were used to gather information from experienced interviewees holding hotel RM- and marketing-related executive positions. In total, 11 revenue and 9 marketing executives were interviewed in 2016-2017 over a period of 13 weeks. The data were transcribed and then Nvivo was used for data organization and analysis.

Findings

The hotels do not systematically segment customers by value because of restraints on the RM systems’ capabilities and the industry’s conventional segmentations. The revenue and marketing executives’ attitudes toward integration, IT system infrastructure support to enable integration, loyalty and membership programs as a means for integration and executive management level support for integration influence the hotel’s potential for RM and CRM integration.

Research Limitations/implications

Only the perspectives of revenue and marketing executives were considered. Incorporating the insights of different parties may achieve a more comprehensive result. In addition, because it seems that there is no systematic RM and CRM integration within the Hong Kong hotel industry, relevant decision-makers’ opinions toward the practice may change once they evaluate the performance of the pioneering practitioner.

Originality

This study reveals what has been done in practice to integrate RM and CRM compared with the theoretical approach, proposes an integration framework and discusses the potential for further development together with the challenges to integration.

Details

International Journal of Contemporary Hospitality Management, vol. 31 no. 2
Type: Research Article
ISSN: 0959-6119

Keywords

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