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How to make up for the costs incurred in this process (linking revenue management with other...

How to make up for the costs incurred in this process (linking revenue management with other functional areas)?

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Answer #1

Revenue Management is a function whereby such areas are found and evaluated which may lead to increase in Revenue or better operating margin. An example can be taken up Hotel Business where the Rooms Availability and Customer Demand can be managed so as to increase the Occupency Level of the Rooms throughout the year.

Similarly, Revenue Management can be linked to almost all the functional areas to increase margin and manage costs better.

However,it may be possible that Revenue Management may lead to Additional Costs like Survey Cost, Data Mining Cost, Advisory Cost etc. Such costs are linked to Revenue Management of the particular functional area.

Hence such costs shall be charged again the Revenues of that Functional Department and will form part of Other Costs.

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