The FOM in Action: A Solution
FOMs, in their role as revenue managers, must
often make difficult pricing decisions. In Danielle’s
situation, it is likely she could sell all 12 of her
remaining rooms at the hotel’s rack rate because
of the snowstorm. Doing so would certainly maxi-
mize RevPar on the remaining rooms and that
should be her primary goal. Hoteliers work together,
however, and in this case, her colleague, Tim, is
asking that she honor a reduced rate for the guests
he has to walk because his hotel is oversold. Tim is
implying, of course, that if Danielle needs rooms in
the future, his hotel will reciprocate.
The question of whether to grant Tim’s request
is one that actually should have been addressed
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