Title: Customer profitability analysis an avant-garde approach to revenue optimisation in hotels

Authors: Anand Iyengar; Ketan Suri

Addresses: Institute of Hotel Management – Aurangabad, Dr. Rafiq Zakaria Campus, Rauza Bagh, Aurangabad 431 001, Maharashtra, India ' InterContinental Hotels Group, 11th Floor, Tower C DLF Cyber City, DLF Phase 2, Gurgaon 122 002, Delhi, India

Abstract: The widespread use of customer relationship management systems has provided hospitality/hotel organisations with detailed insights into the profitability of their individual customers and at the same time have highlighted unprofitable patrons. Critically appreciating contributions in the area of customer profitability analysis (CPA), this paper provides a retrospective (management accounting) and prospective (customer lifetime value) approach to estimate profitability of customer/guest segments in the hotel business environment. The research enumerates antecedents and outcomes of CPA and proposes an integrated framework to render robustness to the prevalent revenue management systems.

Keywords: customer profitability analysis; revenue management; market segmentation; customer lifetime value; ABC; activity-based costing; cost-to-serve; hospitality industry; hotels; customer relationship management; CRM; management accounting.

DOI: 10.1504/IJRM.2012.044519

International Journal of Revenue Management, 2012 Vol.6 No.1/2, pp.127 - 143

Published online: 28 Dec 2011 *

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