Introduction to Revenue Management for the Hospitality Industry
Important calculations
Actual revenue: rooms sold x actual room price
Maximum revenue: rooms available x highest published price
Occupancy: rooms sold / rooms available x 100
RevPar: actual revenue / rooms available
RevPor: actual revenue / rooms sold
Yield: actual revenue / maximum revenue x 100
Fair share: max. revenue own hotel / max revenue market x 100
Actual share: actual revenue own hotel / actual revenue market share x 100
Chapter 4. Market segmentation and selection
Market segmentation: dividing a market into smaller specific segments, sharing the
same characteristics.
Demography: study of characteristics of a population. (Age, gender, education,
income, religion, nationality etc).
Frequent traveller programme: to reward loyal patronage and encourage repeat
business.
Transient: temporary individual hospitality customer
- alone and purchasing a product for a short time
Group business: more than 2 individuals coming together for a common
reason (football team flying together etc).
Sub segments:
Leisure
- Vacation
- VFR (visit friends & relatives)
- special events (weddings)
Business
- Job responsibility
- Attending trainings
- Conferences with co workers
(corporate, government, associates)
See page 44 for more information
Wholesaler: a person who purchases individual travel components at a discount,
based on volume and repackages the components and sells them to a consumer on
retail basis, either directly through the wholesaler organization or via a travel agent/
tour operator.
Free sell: rooms considered to be sold, based upon space
Wash factor: predetermined percentage of usage based upon historical data and
experience.
Environmental scanning: constantly monitoring and assessing the environment to
spot changes and emerging trends.
American generational sub segments:
Silver haired senior aka The silent generation
- born to 1946
- survived 1st/2nd world war
- don’t broadcast purchase intentions
- expect value for their money
Baby boomers
- born between 1946 – 1964
Important calculations
Actual revenue: rooms sold x actual room price
Maximum revenue: rooms available x highest published price
Occupancy: rooms sold / rooms available x 100
RevPar: actual revenue / rooms available
RevPor: actual revenue / rooms sold
Yield: actual revenue / maximum revenue x 100
Fair share: max. revenue own hotel / max revenue market x 100
Actual share: actual revenue own hotel / actual revenue market share x 100
Chapter 4. Market segmentation and selection
Market segmentation: dividing a market into smaller specific segments, sharing the
same characteristics.
Demography: study of characteristics of a population. (Age, gender, education,
income, religion, nationality etc).
Frequent traveller programme: to reward loyal patronage and encourage repeat
business.
Transient: temporary individual hospitality customer
- alone and purchasing a product for a short time
Group business: more than 2 individuals coming together for a common
reason (football team flying together etc).
Sub segments:
Leisure
- Vacation
- VFR (visit friends & relatives)
- special events (weddings)
Business
- Job responsibility
- Attending trainings
- Conferences with co workers
(corporate, government, associates)
See page 44 for more information
Wholesaler: a person who purchases individual travel components at a discount,
based on volume and repackages the components and sells them to a consumer on
retail basis, either directly through the wholesaler organization or via a travel agent/
tour operator.
Free sell: rooms considered to be sold, based upon space
Wash factor: predetermined percentage of usage based upon historical data and
experience.
Environmental scanning: constantly monitoring and assessing the environment to
spot changes and emerging trends.
American generational sub segments:
Silver haired senior aka The silent generation
- born to 1946
- survived 1st/2nd world war
- don’t broadcast purchase intentions
- expect value for their money
Baby boomers
- born between 1946 – 1964
