Integrating Customer Relationship Management and Revenue Management: A Hotel Perspective

Abstract

A number of authors have advocated a move towards integrating customer relationship management (CRM) and revenue management (RM). The implications of integrating CRM and RM strategies in the context of the hotel environment, however, have received little attention. The key questions that need to be addressed are: who should be targeted with CRM efforts and how will those efforts affect the RM process? This paper examines the relationship between CRM and RM. By means of the lifetime/profitability approach to customer segmentation proposed by Reinartz and Kumar in 2002, the appropriate customer segments to target with CRM efforts are identified and a supporting RM strategy is outlined for each segment. These include traditional RM, lifetime value-based pricing, availability guarantees and short-term and ad hoc promotions. The impact of these RM strategies on business processes in relation to customer segmentation, demand forecasting, information systems management and human resource management is addressed.