Occupancy in the hospitality sector

Revenue
Management

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Table of Contents
Answer to question 1.............................................................................................................................1
Part A................................................................................................................................................1
Part B.................................................................................................................................................1
Part C.................................................................................................................................................1
Answer to question 2.............................................................................................................................1
Answer to question 3.............................................................................................................................3
Answer to question 4.............................................................................................................................3
Answer to question 5.............................................................................................................................4
Answer to question 6.............................................................................................................................5
References.............................................................................................................................................7

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Answer to question 1
Part A
While analysing in the hospitality sector, the occupancy indicates the number of rooms that
are occupied by the customers (Sturman, Corgel & Verma, 2011). The performance of hotel
is found by checking the percentage of available rooms and the beds that are booked. It is
necessary to keep track about the bookings regularly this helps hotel manager to calculate the
average daily rate and check the future demand.
The formula for calculating the occupancy is done by simply applying the following formula:
Occupancy (OCC) = Number of rooms that are sold/ Available number of rooms
Part B
ADR stands for average daily rate, which is also known as KPI that is basically used to
measure the performance of hotels. The average price of each room is calculated everyday so
that it is sold accordingly(Landman, 2018). ADR is a factor that is used by hotels to improve
their performance so that revenue and profit margins could also be increased.
The formula that is used for calculating the ADR is:
ADR= Revenue of the room/Total number of rooms old
Part C
Revenue per available room is denoted by RevPAR, it is one of the important factors to
calculate the key performance of the hotel. It is a key factor that is used to determine the
revenue earned by a hotel at a specific time period (Landman, 2018). The performance can be
evaluated by comparing the figures calculated using PrePAR and the computed set of the
hotel.

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The formula that is used for calculating RevPAR is as follows:
Revenue per available room = Rooms revenue / Number of rooms available
Answer to question 2
The STR report of hotel can be calculated by following three findings that helps in analysing
the hotel performance and conditions (Chathoth, Ungson, Harrington & Chan, 2016). Listing
the three key findings:
By analysing the STR report, it can be said that RevPAR is quiet well of the hotel.
From the analysis it was found that, revenue is increased by 25.5% of the week and on
the other had the comp set of hotel that is the market contribution has increased only
by 3.3%. If analysing the performance of hotel in terms of revenue it is quiet
satisfying (Chathoth, Ungson, Harrington & Chan, 2016).
Considering the average daily rate it was found that ADR of hotel has shown a huge
change and it was found that it got decreased by 9.8% in the whole week. If it is
calculated of the competitors it was observed that it got reduced only by 3.4%. The
reduction in ADR directly impacts the occupancy of the hotel. This factor somewhere
degraded the performance of hotel (Baum, et. al, 2016).
As last comparing the occupancy factor of the hotel as compared to other hotels, it
was found that occupancy is better than the other competitors. It is seen that the
occupancy increased by 39.1% and came to 91.8%. This happened because of low
ADR ratio during the recent week. The market occupancy also changed and it was
increased by 6.9% (Baum, et. al, 2016). Thus, from the analysis it was found that
hotel has performed well as compared to the compset.