Deck 7: Revenue Management

Question 1

The corporate rate at a 600-room downtown east coast hotel is currently $199. The owner would like to see a small increase in the room rates for next year. Put together a room rate structure with at least s ix different rates. Your corporate rate should show a slight increase and the other rate categories should have a logical relationship to the corporate rate.

Answer 1

Current corporate rate of room $199
The chart showing the different room structure is as follows:
The rate for corporate has increased on next year from current $199 to $250.
With the change in corporate rate, the changes will be as follows :
1. Concierge rate will be highest as it includes special amenities and services to similar to first class on airline hence will increase to $300.
2. Regular rate is a base rate which has increased to $270.
3. Special corporate rate are negotiated with some companies.
4. Discount rate is a rate during low demand tenure. Hence, it is lower than the corporate rate.

Question 2

What are the two formulas for Rev PAR?

Answer 2

The two formulas for RevPAR is as follows:
2.

Question 3

For th.is same hotel and the rate structure that you developed in Question 1, answer the following questions:
A. What days of the week do you think demand would be the strongest?
B. For those dates, give examples of a day when your selling strategy would be (1) to close either one or all discounted rates, (2) when you would try and shift the day of arrival, (3) when you would require a two day minimum length of stay. Be specific on which days you would do what strategies. For example, which days would a minimum length of stay be appropriate and which days would shifting the day of arrival be appropriate?

Answer 3

NO ANSWER

Question 4

Why is understanding and using RevPAR information so important to maximizing total room revenue?

Question 5

Discuss a t least three Revenue Management terms that would be used primarily in a 1,000 room convention hotel and three Revenue Management terms that would be used primarily in a 400-room airport corporate hotel.

Question 6

Explain the relationship between room rates and market segments.

Question 7

What is DOA and why is it such an important part of yield management?

Question 8

How is the booking pace used with the historical average in yield management?

Question 9

Who is on a hotel's selling strategy team? Which one is the most important?

Question 10

What selling strategy should a hotel implement when the booking pace is under the historical average pace?

Question 11

What selling strategy should a hotel implement when the booking pace is over the historical average pace?