Revenue management
General information
Conditions:
Fixed amount
Perishable goods
Price can be differentiated
High fixed costs + low variable costs
Rate types:
Bar / Rack rate
Complimentary rate
Government rate
Group rate
Day rate
Target groups:
Business guests
(B)leisure
Government / military
Contract
Tour & travel
Group
IDS = internet distribution system (business to guest)
Expedia
Priceline
Kayak
GDS = global distribution system (husiness to business)
Galileo
Amadeus
Sabre
World span
Terms:
Denial: saying no due to availability
Regret / declined: having potential guest but they do not choose you
Turn away: request not accepted by company
No show
Cancellation
Overbooking
Walk: you have to book them out and walk them to other hotel (+ pay)
Walk out: guest leaves without saying / paying
, BOC: Before other commitments
ARI: Average rate index
RGI: Revenue generated index
MPI: Market Penetration Index
Rank: of competitors (1 = highest, 5 = lowest)
Customer worth: company perspective ( primary revenue + ancillary revenue – total
acquisition costs)
Customer value: guest perspective
Primary research is research designed and conducted by an organization for its own
purpose. – for the potential value to the organization
Secondary research is conducted and published by other organizations.
Wholesaler: purchases travel components – sells them to consumer on retail basis.
Opportunity costs: the loss of an opportunity when taking any alternative action
Calculations:
Occupcancy %
Number of room sold / number of room available * 100
ADR:
Room revenue / sold rooms
RevPar:
Room revenue / nr of rooms available
OR
ADR * occupancy%
Yield: How much the hotel achieved out of what it could have maximum achieved.
Total room revenue / max room revenue * 100
GOPPAR:
Room departmental income / nr of days * total rooms
Price
Maximizing revenue and optimizing profit WITH:
Cost based pricing
Value based pricing
Analytical tool: demand and supply balance.
Optimal price: what you think something is worth
Dynamic price: flexible price for products based on demand (increase of revenue)
Static price: same rate at all times
Daily continuous pricing: prices between the defined maximum and the minimum
General information
Conditions:
Fixed amount
Perishable goods
Price can be differentiated
High fixed costs + low variable costs
Rate types:
Bar / Rack rate
Complimentary rate
Government rate
Group rate
Day rate
Target groups:
Business guests
(B)leisure
Government / military
Contract
Tour & travel
Group
IDS = internet distribution system (business to guest)
Expedia
Priceline
Kayak
GDS = global distribution system (husiness to business)
Galileo
Amadeus
Sabre
World span
Terms:
Denial: saying no due to availability
Regret / declined: having potential guest but they do not choose you
Turn away: request not accepted by company
No show
Cancellation
Overbooking
Walk: you have to book them out and walk them to other hotel (+ pay)
Walk out: guest leaves without saying / paying
, BOC: Before other commitments
ARI: Average rate index
RGI: Revenue generated index
MPI: Market Penetration Index
Rank: of competitors (1 = highest, 5 = lowest)
Customer worth: company perspective ( primary revenue + ancillary revenue – total
acquisition costs)
Customer value: guest perspective
Primary research is research designed and conducted by an organization for its own
purpose. – for the potential value to the organization
Secondary research is conducted and published by other organizations.
Wholesaler: purchases travel components – sells them to consumer on retail basis.
Opportunity costs: the loss of an opportunity when taking any alternative action
Calculations:
Occupcancy %
Number of room sold / number of room available * 100
ADR:
Room revenue / sold rooms
RevPar:
Room revenue / nr of rooms available
OR
ADR * occupancy%
Yield: How much the hotel achieved out of what it could have maximum achieved.
Total room revenue / max room revenue * 100
GOPPAR:
Room departmental income / nr of days * total rooms
Price
Maximizing revenue and optimizing profit WITH:
Cost based pricing
Value based pricing
Analytical tool: demand and supply balance.
Optimal price: what you think something is worth
Dynamic price: flexible price for products based on demand (increase of revenue)
Static price: same rate at all times
Daily continuous pricing: prices between the defined maximum and the minimum
