Hotel Retreat: Revenue Management Analysis
Front office manager at Hotel Retreat analyzes daily reports to determine yield percentages based on room occupancy, rates, and revenue generated. Explore how potential and actual revenues are calculated, and how rate spread impacts decision-making for room types.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
E N D
Presentation Transcript
SOLVE THE PROBLEM Front office manager of Hotel Retreat has the following information from his daily report. Total rooms =350 Occupancy= 80% Rack rate = Rs.3000/- 125 rooms sold @ Rs.2700/- 100 rooms sold @ Rs.2500/- 55 rooms sold @ Rs.2000/- Determine yield %
A 300 room hotel with Rs 1000/- as rack rate sells 200 rooms at an average rate of Rs.800/-Calculate yield?
The measuring yield can be measured by yield management. Yield = actual revenue generated / potential revenue *Actual revenue: It is the revenue generated by number of rooms sold. *Potential revenue : It is earned by the hotel if all rooms are sold at rack rate.
Hotel Retreat has 300 guestrooms and collects an average of Rs.2000/- per room and is operating at 70% average occupancy. the hotel offers 100 one bedded and 200 two bedded room. The rates for the rooms are One bedded room tariff Rs.3000/- when sold for single occupancy One bedded room tariff Rs.4000/- when sold for double occupancy Two bedded room tariff Rs.3500/- when sold for single occupancy Two bedded room tariff Rs.4500/- when sold for double occupancy Potential average single rate = Single occupancy room revenue / No of rooms sold as single Potential average single rate = Single occupancy room revenue / No of rooms sold as single PASR= (100*3000 + 200*3500)/300= (300000+700000)/300 = 1000000/300 = 3333.33
Hotel Retreat has 300 guestrooms and collects an average of Rs.2000/- per room and is operating at 70% average occupancy. the hotel offers 100 one bedded and 200 two bedded room. The rates for the rooms are One bedded room tariff Rs.3000/- when sold for single occupancy One bedded room tariff Rs.4000/- when sold for double occupancy Two bedded room tariff Rs.3500/- when sold for single occupancy Two bedded room tariff Rs.4500/- when sold for double occupancy Potential Average Double Rate =Double occ room revenue/ No of rooms sold as double PADR= (100 * 4000+ 200 * 4500) /300=(400000+900000 )/300 = 1300000/300 =4333.33
Hotel Retreat has 300 guestrooms and collects an average of Rs.2000/- per room and is operating at 70% average occupancy. the hotel offers 100 one bedded and 200 two bedded room. The rates for the rooms are One bedded room tariff Rs.3000/- when sold for single occupancy One bedded room tariff Rs.4000/- when sold for double occupancy Two bedded room tariff Rs.3500/- when sold for single occupancy Two bedded room tariff Rs.4500/- when sold for double occupancy Rate spread = Potential average double rate potential average single rate Determination of a room rate spread among various room type is essential to the use of decision making in targeting a hotel s specific market Rate spread = Pot avg double rate Pot avg single rate = 4,333.33- 3,333.33 = Rs 1,000
Hotel Retreat has 300 guestrooms and collects an average of Rs.2000/- per rack room and is operating at 70% average occupancy. the hotel offers 100 one bedded and 200 two bedded room. The rates for the rooms are One bedded room tariff Rs.3000/- when sold for single occupancy One bedded room tariff Rs.4000/- when sold for double occupancy Two bedded room tariff Rs.3500/- when sold for single occupancy Two bedded room tariff Rs.4500/- when sold for double occupancy (105 rooms out of occupied rooms are on multiple occ) Multiple occupancy percentage = No of room sold on multiple occupancy/No of occupied rooms * 100 Multiple Occ % = No of rooms sold on multiple occ/ No of occupied rooms x 100 No.of rooms occupied= 70/100 x 300 = 210 rooms Multiple Occ % = 105/210 x 100 = 50%
Potential Average Rate : (Multiple occupancy % * Rate spread) + Potential average single rate Potential avg room rate = Multiple occ% x Rate spread +Potential avg single rate = 50/100 x 1000 + 3333.33 = 500 + 3333.33 = Rs. 3833.33
Achievement factor = Actual avg room rate (ARR)/ Potential avg room rate The percentage of the rack rate that the hotel actually receives is contained in the hotel s achievement factor. Achievement factor = Actual avg room rate (ARR)/ Potential avg room rate = 2000/3833.33 = .522 or 52%
Yield = Actual revenue generated/ Potential revenue Yield = (Total rooms sold/ Total available room) * (Actual average rate/ potential average rate) Yield = (Occupancy % * Achievement factor) Yield = Occ % x Achievement factor = 70/100 x 52/100 = 36.40 %
Front office manager of Taj view hotel has received the daily report with the following data. Total rooms = 300 Rooms sold = 240 Rack rate 85 rooms sold @ Rs 1,500/- 65 rooms sold @ Rs 1,000/- 90 rooms sold @ Rs 900/- = 2000/- Determine the yield and yield % Solution Yield = actual rev/ potential rev Actual rev=[(85 x 1500)+ (65 x 1000)+ (90 x 900)]=273500 Potential rev = 300 x 2000 = 600000 Yield = 273500/ 600000 = .45 Yield %= .45x100 = 45%
