Please enable JavaScript.
Coggle requires JavaScript to display documents.
Revenue Management - Coggle Diagram
Revenue Management
Specialized Web-Based
Distribution Channels
one of the most popular items sold on the Internet and well over 50% of all hotel reservations are booked online
Net ADR yields from online reservations can be 15–25%
Maintain Rate Integrity
making logical decisions regarding the prices
Monitor the results
Merchant Business Model
Opaque Model:where consumers “bid” an amount they are
willing to pay for a room on a specific arrival date.
Role of the Revenue Manager
Revenue Management
GMs, FOMs, and DOSMs: Establish room rates
RMs: Manage and maximize revenue
forecast future room sales and provide
negotiated rates to certain clients
responsible for
optimizing rooms’ revenue
Room-Rate Management
Guests seek a hotel’s rate-related information
from
Sales and marketing departments
Other distribution channels
Property-level reservation agents
Websites
Central reservation system (CRS)
Room-rate Economics: The processes by which revenue managers’ price rooms
Bottom-Up Selling
Top-Down Selling
Law of Demand: an increase in demand
typically results in an increase in selling price.
Law of Supply: an increase in supply
typically leads to a decreased selling price.
Rate Type: A single rate for a specific type of room sold during a
specific time period.
Revenue Management Essentials
RevPAR
Management
Yield Management: A demand forecasting systems designed to maximize revenue by holding rates high
Yield Management Philosophy: The airline industries varied its pricing in response to changes in consumer demand.
Measures
of Effectiveness
GOPAR Formula: Operating Revenue – (Departmental Expenses + Undistributed Expense) / Rooms available to be sold
Occupancy Index Formula: Hotel's Occupancy rate / Competitive set's Occupancy rate = Occupancy Index
ADR Index Formula: Hotel’s ADR / Competitive set's ADR = ADR Index
RevPAR Index Formula: Hotel’s RevPAR / Competitive set's RevPAR = RevPAR Index
Yield Management Implementation
employed to
Accurately forecast demand
Minimize rate discounts in high-demand periods
Use MLOS and CTO to maximize revenue in high-demand
Increase discounts during low-demand periods
Implement special event rates during periods of extremely heavy demand
Occupancy Management
Minimum Length of Stay (MLOS)
Closed to Arrival (CTA)
Overbooking (oversold)
Walk(ed)
Management Forecast
Purpose/Characteristics
Forecasting
Rooms available to sell
Estimated rooms to be sold
The estimated occupancy rate
The estimated ADR
The RevPAR estimate
Distribution Channel Management
Current
Distribution Channels
Telephone/Smart Phone Apps
E-Mail/Traditional Mail
Global Distribution System:Maximizing GDS effectiveness
Central
Reservation System