Implementing dynamic revenue management in hotels during Covid-19: value stream and wavelet coherence perspectives

Abstract

Purpose Practicing flexible revenue management (RM) at hotels during Covid-19 is essential. The well-performed hotels ponder how to transform the target from revenue to net profits. This paper aims, first, to develop a value stream mapping (VSM) model for a productive RM based on six key drivers: organizational culture, demand forecasting, dynamic distribution channels, competition breakdown, dynamic and customized pricing and daily reviewing, and, second, to examine the nexus between RM and hotel’s efficiency during Covid-19 using the wavelet analysis (WA) to visualize this relationship’s time and frequency-based lead–lag dynamics. Design/methodology/approach Using time-series data, a multiple case study of 31 luxury hotels in Egypt was applied based on semi-structured interviews and self-administered questionnaires. Findings The first phase results showed that consensus toward the RM framework was achieved, regardless of current challenges, indicating that RM managers and scholars could use it. In Phase 2, the WA confirmed a positive correlation and significant influence between Covid-19 and RM practices at most business cycle frequencies. Furthermore, overall high causal relationships between RM practices and hotel efficiency were discovered in the short and medium terms and through different occurrence cycles. Though, the dynamic pricing in the long term was apart from this relationship. The causal effects between Covid-19 and hotel efficiency are not observable in the long-run spectra, indicating that resilience efforts with Covid-19 perhaps mitigated the impact. Research limitations/implications Hotel managers could use the RM model developed from this study during the downturn to improve efficiency. The outcome may lead to the recovery of the hotel market and the whole economy. WA maps display possible directions for hotel managers to be more efficient based on the time and frequency domains. Originality/value This study shows opportunities for RM implementation during Covid-19 based on the VSM and the WA approaches in hotels.