Room Capitalization to Customer Capitalization

Research Paper (undergraduate) from the year 2007 in the subject Tourism, grade: A, University of Huddersfield, course: Revenue Management, language: English, abstract: Customers today are in a fast advancing world and are nowadays considered to be hotel's biggest asset. As without a demand there is no sense in running a hotel. Customers play a huge role in today's hotel industry, as hotels earn revenue from customers, hence they should be the focus to provide consistency with regards to business, and making them assets to the hotel. But by just making them assets to the hotel, it is not good enough for this ever changing industry and with the advent of technology the value of customers increase as it would also be easier to establish their current worth and plan for the future. Hence hotels would have to look beyond their customer's money, with a view of customers as a measure of their overall performance apart from their physical assets. This performance indicator namely REVPAC (Revenue per available customer) could be used to analyze the hotels revenue per customer with regards to its status in a market share and customer capitalization.

The focus and importance of customers is therefore becoming a glaring significance in the hotel industry. Hotels with efficient customer relationship management systems are able to breach all sorts of customer related problems. With the ever increasing demand for rooms in India, the need to satisfy the customers with what is available in the hotel is an extremely tough job, which is what customer relationship management techniques are aiming at by stressing on the importance of customers. This in turn would help hotels understand as to why they need to use customers as a base in a performance indicator to measure their overall performance.

The researchers have studied the works of prominent researchers to compile a literature review. The researchers have used the works of prominent researchers to support the argument. The literature review was followed by a primary research. To make the study more relevant, the primary research revolves around Aurangabad, an Indian city which serves as a perfect example, a city with a good mix of tourist cum business clients. The study revolves around Taj Residency Aurangabad which was chosen, as it is a five star hotel and is a part of the Taj Group of Hotels.

A trend analysis has been made between the basic turnover of the hotel and the REVPAC of the hotel. Thus showing that, REVPAC is similar to the hotel's turnover and can be used as an "overall" performance indicator in hotels.