ROOMSDIV- MIDTERMS Flashcards
eight (8) revenue streams:
- packages
- corporate
- OTA (online travel agencies)
- FIT (Foreign independent Travelers) Wholesale
- Long staying Guests
- Individual Others
- Group
bundled deals offered by hotels that include accommodation along with additional services or amenities
packages
these are designed to enhance the guest experience
- provides a combination of services at a discounted or promotional rate compared to booking each service separately.
packages
ex.
4 night stay with breakfast and dinner for PHP 20,000
packages
bookings made by business clients, companies, or organizations for their employees or
guests.
corporate
this is usually negotiated and discounted based on the volume of bookings the company is expected to make over time.
corporate
three (3) characteristics of corporate bookings
- negotiated rates
- value-added services
- flexible policies
a characteristics wherein hotels often provide special rates to companies based on their expected number of room nights or the frequency of bookings. These rates are typically lower than standard rates.
negotiated rates
characteristic wherein corporate bookings might
include additional amenities like free Wi-Fi, complimentary breakfast, access to business centers, or meeting room facilities.
value-added services
a characteristics wherein companies require more flexible booking and cancellation policies to accommodate changes in travel plans.
flexible policies
bookings made through third-party online platforms like Booking.com, Expedia, Agoda, or similar websites.
OTA
these platforms allow guests to search for and book hotel rooms, often at competitive rates, from a wide selection of hotels.
OTA
three (3) characteristics of OTA bookings:
- wide reach
- commission-based model
- flexible pricing
these provide a vast marketplace for
hotels,
wide reach
Hotels typically pay a commission to the OTA for each booking made through their platform. This commission can range from 10% to 25% of the booking value.
commission-based model
Hotels can adjust their rates dynamically on these platforms to remain competitive and attract more bookings.
flexible pricing
Bookings made by travelers who arrange their trips independently rather than as part of a pre-arranged group or tour.
FIT Wholesale
These travelers typically book their hotel stays through travel agents or wholesalers that offer discounted rates for longer stays or larger volumes.
FIT wholesale (foreign independent travelers)
three (3) characteristics of FIT wholesale:
- discounted rates
- flexibility
- partnership with travel agencies
the rates are usually lower than standard room rates, as they are often negotiated in bulk by travel agents or wholesalers.
discounted rates
have more control over their travel plans, allowing them to customize their stay according to their preferences.
flexibility
Hotels partner with travel agencies or tour operators to reach a wider audience of independent travelers.
partnership with travel agencies
refers to hotel guests who stay for an extended period, typically longer than the average guest.
LSG
- These guests usually book rooms for a week, a month, or even longer.
- they provide a steady source of revenue and help maintain occupancy rates over a longer time.
LSG
for LSG, a stay is considered a long stay if it lasts ___.
7 nights or more
14 nights or 30 nights (extended- stay properties)
characteristics of LSG:
- extended duration (min stay is 7 nights)
- discounted rates (incentive for extended stay)
- value-added services (additional amenities)
VC (50%) is often referred to as:
visitor commission
Revenue split with partners or commissions
with the hotel retaining 50% of the revenue.
ex. ₱10,000 booking with 50% retained by the hotel.
VC (50%)
Revenue generated from bookings made for groups of guests, often for specific events or purposes.
groups
these often come with negotiated rates and special arrangements, which differ from standard individual bookings.
groups
- handled as a unit to simplify reservation, pricing, and billing processes
- represents a significant portion of the hotel’s revenue due to the volume of rooms reserved.
groups
booking is usually classified as a group booking when it involves ___
5- 10 or more rooms
- refers to a miscellaneous category in hotel revenue
- income from various guest-related services that do not fall under the main revenue streams.
individual others
characteristics of individual others:
- additional service (include charges for services requested)
- incidental fees (fees for parking and late check-out)
- one-time revenue
This category under individual others often represents one-time or occasional revenue that is not directly tied to room occupancy.
one-time revenue
these are expenses that change directly in proportion to the level of business activity or guest occupancy in a hotel.
variable costs
- these costs increase when the hotel is busier (higher occupancy) and decrease when the hotel is less occupied.
variable costs
seven (7) variable cots in a hotel
- housekeeping & cleaning supplies
- laundry and dry cleaning
- utilities
- f&b costs
- operating supplies
- COGS for minibar and gift shops
- guest transportation services
Revenue remaining after variable costs, covering fixed costs and profit.
contribution margin analysis
a financial metric used to evaluate how much revenue remains after deducting variable costs from sales.
contribution margin analysis
the remaining amount in the margin analysis is called
contribution margin
- contributes to covering the fixed costs and generating profit for the business
- vital tool in understanding the profitability of a hotel’s Rooms Division or any business operation.
contribution margin
a crucial financial tool that helps hotels and businesses understand the relationship between costs, pricing, and profitability.
contribution margin analysis
in contribution margin analysis, this helps determine how much money from each unit of sale contributes to covering fixed costs and profits.
profitability assessment
Aids in setting prices that cover both variable costs and fixed costs while ensuring a profit margin.
pricing decisions
Allows managers to identify areas where cost reductions are possible without affecting product quality or customer satisfaction.
cost control
Used to calculate where total revenue equals total costs, meaning the business neither makes a profit nor a loss.
break-even analysis
