Avant Garden: Exploring Possibilities for Improving Revenue Management

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Case Details:


Case Code : MKTG257 For delivery in electronic format: Rs. 600;
For delivery through courier (within India): Rs. 600 + Shipping & Handling Charges extra


Services Marketing / Revenue Management
Case Length : 18 Pages
Period : 2009-2010
Pub Date : 2010
Teaching Note : Available
Organization : Avant Garden (Fictitious)
Industry : Hospitality
Countries : India


The case deals with the revenue management (or yield management) issues typically related to capacity constrained industries such as the hotel industry. Hotel Avant Garden, situated in Jaipur, India, was an attractive destination for tourists and business people. The hotel had three different categories of rooms (Deluxe, Luxury, and Regular) priced accordingly and discounted on the basis of certain fixed criteria. The customer segments comprised leisure travellers, business people, travel agents, and incentive firms, all of them with distinct tastes and preferences in terms of choice of rooms, period of booking notice, and duration of stay. Eeshita Desai, the newly appointed General Manager of the hotel, took the initiative to remodel the revenue management practices of the hotel.

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In the process of analysis, several issues pertaining to the timing of reservation of the rooms, and to each customer segment, etc., came up. She calculated the booking limits, protection levels, and overbooking limits for the different category of rooms based on 5 years of historic data on demand distribution, and sought to implement the new system in the hotel. However, there were still several other issues that remained a cause for concern.


What yield management is and when it is appropriate.

How the hotel industry and other similar industries fit into the service profile

Customer segmentation and demand forecasting

Calculation of booking limits and protection levels

The concept of overbooking

Yield management controls (capacity management, discount allocation, duration control, variation in mobility, group availability, supply control, and reservations)

Requirements for effective yield management

Comparison of yield management applications across different services (Airlines, Car Rentals, Cruise Lines, Financial Institutions, Hotels, Railroads, Telecommunications, and Tour Operators)


  Page No.
Introduction 1
About The Hotel 1
Room Rates 2
A Need for Effective Revenue Management 2
Demand Patterns 3
Customer Segments 3
Discounting Patterns 4
Developing a Revenue Management Plan 4
Protection Levels and Booking Limits 5
Over Booking Limits 7
Going Forward 8
Exhibits 9


Revenue management, Yield management, Customer segmentation, demand forecasting, booking limits, protection levels, overbooking, capacity management, discount allocation, duration control, supply control

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