Planning and Evaluating Operations Flashcards
Average Daily Rate
An occupancy ratio derived by dividing net rooms revenue by the number of rooms sold.
Average Rate Per Guest
An occupancy ratio derived by dividing net rooms revenue by the number of guests.
Competitive Set
The group of hotels in a market that provide the most important competition for a hotel
Daily Operations Report
A report that summarizes the hotel’s financial activities during a 24-hour period and provides insight into revenues, receivable, operating statistics, and cash transactions related to the front office; also known as the manager’s report.
What is Forecasting?
The process of predicting events and trends in business; typical forecasting for the rooms division includes room availability and occupancy.
House Count
The forecasted or expected number of guests for a particular period, sometimes broken down into group and non-group business.
Hubbart Formula
A bottom-up approach to pricing rooms; in determining the average price per room, this approach stars at net income then considers taxes, costs, and expected rooms sold to then determine ADR.
Income Statement
A financial statement that provides important information about the results of hotel operations for a given period of time.
Market Condition Approach (as it relates to pricing)
An approach to pricing that bases prices on what comparable hotels in the hotel’s competitive set are charging for a similar product.
Multiple Occupancy Percentage
The number of rooms occupied by more than one guest divided by the number of rooms occupied by guests.
Multiple Occupancy Ratio
A measurement used to forecast food and beverage revenue, indicate clean linen requirements, and analyze daily revenue rate; derived from the multiple occupancy percentage or by determining the average number of guests per rooms sold; also called the double occupancy percentage.
Operating Ratios
A group of ratios that assist in the analysis of hospitality operations.
Overstay
A guest who stays after his or her stated departure date.
Rack Rate
The standard rate the property established for a particular category of rooms.
Revenue Per Available Customer (RevPAC)
A revenue management measurement that focuses on revenue per actual guest.
Revenue Per Available Room (RevPAR)
A revenue management measurement that focuses on revenue per available room.
Room Rate Variance Report
A report listing rooms that have not been sold at rack rates.
Rule-Of-Thumb Approach
A cost approach to pricing rooms in which the room rate is set at $1 for each $1,000 of construction and furnishings cost per room, assuming an occupancy of 70%.
Stayover
A room status term indicating that the guest is not checking out today and will remain at least one more night; a guest who continues to occupy a room from the time of arrival to the stated date of departure.
Understay
A guest who checks out before his or her stated departure date.
Yield Statistic
The ratio of actual rooms revenue to potential rooms revenue.
