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Financial Contribution and Revenue Management - Marriott International

University: Bucks new University London

  • Unit No: 9
  • Level: Undergraduate/College
  • Pages: 14 / Words 3586
  • Paper Type: Assignment
  • Course Code: HM606
  • Downloads: 432
Organization Selected : Marriott International


Hospitality is the relation with customers and host and such practice can be hospitable. It includes entertainment and reception of guests, strangers, visitors, membership club, attractions, particular functions or events and other facilities for travellers and tourists. The hospitality operation offers various type of products and services to their guest or visitors. The report is based on Marriott hotel is the multinational hospitality organisation which manage and franchise the wide of portfolio of hotel that are related to housing facilities. In this hotel, there are around 195,000 rooms are develop in future time period (Cetin and Dincer, 2014). The main motive of this project is to describe the financial contribution which room's revenue producing areas developing the business unit. Along with this, applied appropriate principles of pricing to the room product and evaluate the methods which can used to optimise profitability in better manner.


1. Explain the financial contribution that room revenue producing areas

Financial contribution is the cost accounting concepts which allow firm for determining the individual profitability of specific product and services. Marriott also earning extra income and revenue by providing other sources which help them in gaining high amount of profitability in better manner. Except from room services, they are also prepare another things which assist them for earning additional income or profit from their guests. Hotels have perishable inventory. The major income generating source in hotel from room rentals, food and beverage sales and conduct meeting in room rentals. In Marriott hotel, there are various sources and method of generating income and revenue by the guests. These are described as follows:

Occupancy and room rate– This is that factor which determining how much income or revenue a hotel can earn from rooms are residency and average rate on regular basis. The hotel provide double bed, single bed room to their guest and their price will set on the basis of peak time period (Walker and Walker, 2016). If guest are come in non peak time so they are cut down their cost of room otherwise they are charging high rate for them in peak time period.

Social media – Social media and online marketing help hotel for attracting domestic as well as international guests towards their hotel services and items effectively. Marriott hotel using Facebook, LinkedIn, google, twitter and other sites which gaining attention of large number of people. This will help in spreading their hotel services or facilities regarding restaurant scene, local events, travel tips and providing special offers and discounts.

Food and beverage– It is another financial contribution source which assist Marriott hotel in enhancing their revenue and income. Most of the people are come for hotel by attracting with their food and drinkable items. The hotel guest does not want to wait in line so they just explore the best hotel and order food as per their requirements (Bowie and et. al., 2016). The hotel staff offer their guest best quality food items which fulfilling all needs and demand of them. Sometime when they try to gain higher income and revenue so they will offer them high price of food item especially to the international customers.

Providing different type of packages– There are many hotels which can developing and offering special deals to their customers that will also other financial contribution factor except with rooms. If hotel situated close to the golf course, then packages includes breakfast, provide two rounds of golf and stay a room for night. Also Marriott hotel provides movie tickets, conduct events, shows for their guests. Some other type of packages that includes Valentine special, birthday and Anniversary special packages prepared for their guests and gain high profitability. The packages will be purchase for guests but this involves additional income to the hotel panel.

Discounts– There are various types of discounts offers which prepare by Marriott hotel for their guests. The hotels generate the high income during peak season and in summer they provide beach location to their visitors (Sloan, Legrand and Simons-Kaufmann, 2014). If they are selling rooms rooms at discounted price in off season so this will help in generating income in occupancy rate.

Room attach with meeting area– If Marriott hotel provide that room where attach meeting space is also available so they will charge additional revenue for guests. This is very easily for them is to conduct meeting on personal basis where not more than one or two people are present. Some people who come other state for business purpose and stay in hotel so they will easily select that room where meeting room is available for their comfort. 

2. Apply principles of pricing to room's product and evaluate potential benefits of effective practices to profitability

In Marriott hotel, there are various type of pricing principles which help in executing in the room's products effectively. Price determine the ability and capability of the business for stay in market place and also generating high level of profitability. At the time, when price need to be recover their hotel costs so this will totally based on customers point of view and reviews. There are four principle of pricing that are described as under:

Prices– This is the first function which recovering the value and cost while doing effective business. It is the leading method which help hotel for increasing profitability and revenue by guests (Van der Wagen and Goonetilleke, 2015). The Marriott hotel set that price of their room product which easily affordable to the people who come from other country. If hotel sell room at high rate so this attracting more people towards their services and facilities effectively.

Customer determined value– This pricing principle is best appropriate for the hotel where customers select their own demanding products in reasonable rate. The hotel required to set or fix that rate of their room products which are suitable for them in any manner. In this pricing principle, customer already decide that how much price they are gave to the hotel management by exchanging services. Through this they can fixed their budget according to the needs and demand. After that, hotel manager need to analyse and examine those customers who are willing to stay in their hotel for spending vacation.

Perceived value– This is the assessment of customers which can bring out to the purchasing experience that includes selection, quality, convenience, surroundings, service, prices (Ortmeier, 2017). They mainly begin for setting the prices when they will developing and creating values also this will help in establishing and adjusting the price in better manner within the Marriott hotel. In this principle, price perception is real. If the rate is not equal or less than the value so the customers does not pay in other corner. At the time, if they are realise that the price is very high, so there is need of level and necessity which will paid more as compared with others.

This principle of pricing is helping guest for selecting their required rooms, if they want best surroundings room where they seen the pool such price is very high in comparison to other rooms. The room should be quality based where television, bar counter, additional services also available for their international as well as domestic guests. On the other hand, the hotel need to provide them appropriate convenience or transportation facilities offer to their visitors through which they can easily move from one place to another in better manner. Marriott hotel will charge extra price to the different type of rooms such as double bed, single bed and other facilities like television, table, attach bathroom, telephone and other services (Sirakaya-Turk, Baloglu and Mercado, 2014).

Product qualities– The Marriott hotel mainly dealing with price perception which required to be considered as logical and emotional. There are such products qualities of rooms are as follows:

  • Desirability– In hotel, customers mainly required that product which very much necessary for stay in the room. Such as lights and fans because they are these room products, without these guest does not survive in the hotel room.
  • Availability – Marriott hotel require to provide available products which need most for the guests such as television, telephone, bed, etc. that are available in the hotel rooms.

Potential benefits of effective practices to profitability

All the above principle of pricing will help Marriott hotel for enhancing the income and profitability level in proper manner. Such factors are directly or indirectly affect on hotel business operations and its functions effectively (Park and Kim, 2014). The four principle of pricing are analysing the guest requirements and needs as well as capacity of hotel management.

3. Evaluate methods used to optimise profitability as applying fixed capacity inventory, recognising dynamic growth

In current time period, Marriott hotel are using and adopting different types of methods which help in enhancing profitability related to applying fixed capacity inventory in better manner. There are various methods that used for optimise profitability as applying to fixed capacity inventory that are described as under:

Focus on forecast performance– The hotel industry require to predict the clear image of future coming functions and operations that assist in identifying and conducting planning regarding actions which are performed by company managers effectively. If hotel has fixed capacity of room so they does not enhancing in the number of rooms at same time. After that, they require to forecast their business performance as well as their staff members in proper manner. With the prediction of necessary resources that includes front office, housekeeping, food and beverage and many other operational managers who enable for gaining proper alignment of their suppliers and also they are providing services to their guests. Also they need to focus on identifying dynamic growth and success that are related to technological development and improvement appropriately.

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Engage with associates– Thee is no surprise for hotel that guest satisfaction is higher which achieved by Marriott hotel. In hospitality business, guest satisfaction generally depend on making relationship with organisation associates as well as their customers in better manner. Hotel manager need to focus on inventory capacity as per this they offer rooms to the guests in peak season (Aragon-Correa, Martin-Tapia and de la Torre-Ruiz, 2015). This type of method is implemented in the hotel industry for analysing the capacity of inventory in effectively. Apart from this, meeting and interaction between associates are used by hospitality businesses. Such type of activities and functions assist associates which mainly concentrate on problem solving. Such type of activities are essential for engage with associates which help them in performing better way. Apart from this, it is that method and techniques which help hotel in getting high level of growth by using technological advancement.

Optimise market segmentation – In Marriott hotel, there are various businesses conduct their market segmentation for accommodate guests. This is that method which help in optimising the profitability so they will applying the capacity of fixed inventory in better manner. If customer are try to force them for giving them room so hotel offer them single room which has not too much services and facilities are available. They also provide them required rooms where they stay for short time period. After that they hotel manager need to evaluating and understanding the customer behaviour that will assist in providing business foundation to concentrate on customer segmentation that mainly perform and also maintain effective business strategies for enhancing optimal profits (Feinstein and Parks, 2014). For instance, during peak season, hotel administer require to focus on attracting, retaining and accommodating desired visitors towards their hotel services or facilities. On the other hand, during low season, it is essential for hotel manager is to analysing what customer need most for attracting them. Such method of optimising profitability can enhancing the growth and success level with the assistance of technological development and improvement.

Match employees levels to requirements– Marriott hotel need to balancing the customer care with staff levels in different service areas which is very important to managing property and independent hotel proprietor. Therefore, during low season, market demand decreases that will lead to excess in employees levels and otherwise enhancing the value of human capital effectively. In this, human capital is one of the major controllable expenses in the hotels by using various methods and procedures for managing, checking their all employees level with the demand and insure services will be high quality based season and minimising the reimbursement in low seasons. The capacity of fixed inventory also required to match with demand of staff levels so hotel require to focus on customers needs and requirements (Peiró-Signes and et. al., 2014). Along with this, it will assist in recognise the major growth or success relates to advanced technology effectively.

Apply the value of inventory– There are various hotel which are using Run of the House method selling which means that guests will be staying in room for deciding by Marriott hotel as selling method. ROH define that the customers will getting which rooms are available while they are check-in. According to this outcome, the hospitality operation can be easier and flexible for them. This is that method which help in carry out with high level of costs and the value of vacant room reduces after night pass. Along with this, it is very indispensable for hotels is to correct the value of their effective stock at given time frame (Ruetzler and et. al., 2014). Such method also help in identifying dynamic growth which are associated with development of advanced technologies and techniques.

4. Explain how industry code of conduct, legislation and best practice affect accommodation process

In current time period, Marriott hotel can maintain and perform different code of conduct, legislation and best practices which affect accommodation process in proper manner. There are various code of conduct which are affecting the process of accommodation that are very essential for determining the best practices, legislation and accommodation that are described. The code ensure that resident provide advantages to clear all the major strategies and policies that are related to accommodation procedure are as follows:

Health and safety – It is necessary for Marriott hotel is to make sure that all the room should be neat and clean regarding guest views and perceptions (Khan, Garg and Rahman, 2015). They are need to conduct effective methods and techniques which directly impact on accommodation process.

Environmental quality– This is another code of conduct which also affect on accommodation process where most of the rooms should be seen as outside surroundings. They will make sure that all the rooms should effectively quality based in each manner.

Maintenance and repairs– It is another code of conduct that directly affect on accommodation process where they required to maintain and repair all rooms furniture for their guest satisfaction. They need to maintain and control all common accommodation which directly affect on hotel activities and functions.

There are various legislation which directly affect on accommodation process such as health and safety act, employment rights act, customer protection act, etc. such are very essential for Marriott hotel in effective way. There are various best practices that will assist in performing all major functions and operations (Walker, 2015). Along with this, such type of exercises will assist in determining and evaluating all major factors to control all major acts effectively.

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5. Identify the expectations of customers from diverse markets and describe how providers of accommodation reach with their needs

For Marriott hotel, it is required for them is to analysing and examining whole market place as well as desired customers who will willing to acquiring their effective services and facilities and also enjoy with their guests. Along with this, it is essential for them is to determining and evaluating entire market area that will help in gaining attention of large number of customers in effectively. There are various expectation which accept by customers to Marriott hotel such as connectivity, great value, mobile check-in and check-out system, authentic services and facilities, appropriate sustainability and some others. Hotel require to promote their new products and services by using various social media channels such as online marketing, internet, Facebook, etc. Different customers have various expectation in the large diverse market place so hotel will easily conducting new product and services by Marriott hotel in better manner (Gummesson, 2014). It will help in determining and evaluating all major functions by hotel industry in proper way. In this, there are various factors that will assist in directing and controlling all major business operations and its functions effectively. There are various types of customers who will desire to purchase such goods and services which are related to Marriott hotel.

On the other hand, with the usage of quality management process hotel designing the appropriate structure in an organisation. They required to conduct business operations and its major activities that are related to customers expectation such as clean rooms, effective services, sound environment, pool facilities are occurred. Also they are using appropriate methods and techniques that required to be adopted by hotel manager for performing functions in better way. Along with this, the accommodation providers need to achieving with their target and effective needs of their desired visitors. They require to analysing all major usage of high quality based management procedures and also designing different products in proper manner. This will assist in getting high quality based services and facilities that will occurs in high level of income and revenue of the industry.

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From the above mentioned report, it can be concluded that Hospitality is the relation with customers and host and such practice can be hospitable. It includes entertainment and reception of guests, strangers, visitors, membership club, attractions, particular functions or events and other facilities for travellers and tourists. Financial contribution is the cost accounting concepts which allow firm for determining the individual profitability of specific product and services. In Marriott hotel, there are various type of pricing principles which help in executing in the room's products effectively. This principle of pricing is helping guest for selecting their required rooms, if they want best surroundings room where they seen the pool such price is very high in comparison to other rooms. In current time period, Marriott hotel are using and adopting different types of methods which help in enhancing profitability related to applying fixed capacity inventory in bett

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