Revenue enhancement,part 1: a straightforward approach for making more money

Revenue enhancement—comprising strategies for increasing the amount of money a business makes—requires that a business solve a guest's problems in such a way that the guest pays to have those needs satisfied and is pleased at the outcome. Involving creative approaches to serving guests, revenue enhancement implies a management commitment to seek guests who are willing and able to pay for solutions to their problems. Revenue enhancement can be as simple as letting guests know what services are available or asking them about their needs so that one can match up desired services to those offered by a hotel or restaurant, or it can be as complicated as applying computer-based yield-management algorithms. In addition to encouraging guests to spend their money, managers committed to revenue enhancement must set up incentives that allow their employees to share in the additional profits brought about by the extra services that the employees offer. Developing new services, repackaging existing services, and shifting peak demand to off-peak times are all tactics that can enhance revenue. This is the first in a series discussing specifically how hotels and restaurants can apply revenue-enhancing strategies.