Unit 2 - Revenue Management - Part 1 Flashcards
____ is the technique of planning to achieve maximum room rates and the most profitable guest. This concept originated with the use of ______.
Revenue Management
Yield Management
Yield management was borrowed from the ____ industry to assist hoteliers in becoming better decision makers and marketers
Airline Industry
Yield management forced hotel managers to develop _____ policies that would build a profitable bottom line.
reservation policies
As with other businesses, pricing for the lodging is based on ____ and ___.
Supply and demand
The period between peaks and valley, is called ___, during which hotels build business and offer a variety of rates.
Shoulder time
Revealed the success of a hotel staff in attracting guests to a particular property.
Occupancy Percentage
Formula for Occupancy Percentage
(No. of rooms sold ÷ no. of rooms available )× 100 = Single Occupancy Percentage
_____ is a measure of a hotel staff’s ability to attract more than one guest to a room.
Double Occupancy
Formula for Double Occupancy Percentage
[(no. of guests - no. of rooms sold )÷ ( no. of rooms sold)] × 100
___ is a measure of the hotel staff’s success in selling available room rates.
Average Daily Rate or ADR
Formula for ADR
total room sales ÷ no. of room sold
____ and ____ are essential parts of revenue management because they challenge hoteliers to maximize occupancy and room rates.
Occupancy Percentage and ADR Computations
____ allows you to recognize it as one of the financial determinants that hoteliers use in discussing revenue management.
RevPAR or revenue per available room
____ is determined by dividing room revenue received for a specific day by the number of rooms available in the hotel for that day.
RevPAR
Formula for RevPAR
Room revenue ÷ no. of available rooms
or
Hotel occupancy × ADR
___ answer the question, “How many dollars is each room producing?”
RevPar
What airlines and hotels share similar features that need the practice of yield management?
Hotel rooms and airline seats
One major difference in how yield management is used in airlines and hotels.
Airline passengers usually don’t have the opportunity to spend money for other products and services unlike in the hotel.
3 basic factors of yield management to navigate their way through revenue management.
Room rate categories, room inventory, and group buying power
The goal of revenue management is two fold: _____ and _____.
To maximize profit for guest room sales and to maximize profit for hotel services.
The ____ reports directly to the general manager, work closely with the marketing, and sales department, and consults with the front office manager.
Revenue Manager
The job of the ____ is to oversee the room inventory and room rates offered throughout the year to groups and individuals and through various channels; CRS, GDS, third-party reservation system, toll-free reservation number, and so on.
Revenue Manager
Jobs of revenue Manager
- Monitor, analyze, and report on demand patterns, sales, and losses.
- Develop, implement daily, and improve sales strategies as needed.
- Work with Sales, Catering, and Conference Planning to balance transient and
group business. Provide feedback about potential new customers. - Analyze no-shows, cancellations, early departures, and unexpected stayover
patterns. - Direct weekly revenue meetings.
- Assist with product development and marketing of transient packaging.
- Adjust all rates and restrictions on property and through all transient channels.
- Provide weekly reports about business pace and changes in consumer behavior
that affect revenue.
