Applying Revenue Management to Palapas

The beachfront palapas described in the accompanying case study represent a scarce resource that should be subject to revenue management applications, just like guest rooms. By setting an appropriate fee structure for the palapas, the Caribbean Palm Resort can end guest confrontations while boosting both guest satisfaction and palapa revenue. A particularly effective approach might be to bundle the palapas with the price of premium rooms. In any event, palapas should be subject to a formal reservation policy, rather than claimed in an informal process. Once the correct pricing and reservation policy is in place for the palapas, the resort must enforce it consistently.