Revenue Management Assignment
Added on 2021-06-18
11 Pages2955 Words125 Views
Running head: Revenue ManagementRevenue Management
Revenue Management 1ContentsIntroduction.................................................................................................................................................2Occupancy Rate...........................................................................................................................................2Average Daily Rate (ADR).........................................................................................................................2RevPAR.......................................................................................................................................................3Based on the STR reports provided, provide 3 key findings about how the hotel is performing against its competitors..................................................................................................................................................3Identify the 2 worst performing days of the month and potentially why..................................................4Show or describe 2 other ways to analyze competitors................................................................................4List and describe 5 yield management strategies and how you could use to improve this property.............5Identify 3 different key stakeholders in the property that you will need to communicate your yield management strategies with. For each different stakeholder provide an overview of how you would communicate with them, the information you need to share and what assistance you need from them.......6Determine 2 other areas of the hotel (not rooms) where you can implement revenue or yield management strategies. Provide 3 examples of strategies you could use..........................................................................7Conclusion...................................................................................................................................................8References...................................................................................................................................................9
Revenue Management 2Introduction Revenue Management is the process of applying the analytics for prediction the consumerbehavior at the market level and maximizing the availability of products for increasing thegrowth of revenue. The main goal is to sell the right product to the right consumer at the righttime in exchange of appropriate price with the correct packing which suits his needs. Theconcept attempts to comprehend the observation of the consumers about the value of the product.Furthermore, it tries to align the availability, positioning and prices of the product in targetedsegments of the consumers (Willie et al., 2015). In the hospitality industry, many hotels apply the concept of revenue management by analyzingthe type of business the hotel can serve in the given market conditions. They also evaluate therates which are applicable for each of the consumer segment. So, the various revenuemanagement strategies applied in the hospitality industry are analyzed below along withidentification of the key stakeholders. Different yield management strategies are also mentionedand explained to improve the performance of the hotel.Occupancy Rate Occupancy Rate is a key performance indicator (KPI) implemented within the hotel industry toanalyze the performance of a hotel. It refers to the occupied percentage of the hotel. It calculatesthe number of occupied rentals at a given time in comparison to the total rentals available at thatpoint of time in the hotel. It is one of the popular KPI in the hospitality industry which indicatesthe quantity of the space being utilized in a hotel. The occupancy rate is calculated as:Occupancy Rate: Number of Occupied rooms/Total Number of available rooms (Rest et al.,2015).
Revenue Management 3Average Daily Rate (ADR)Average Daily Rate (ADR) is a metric which reveals the average rental income in connection tothe occupied rooms per day. By calculating ADR, the owners come to know about the presentoperating performance of the hotel as compared to the other hotels.Thus, it reveals the average rental income paid for each occupied room in a particular timeperiod. However, complementary rooms and house use rooms are not added in the calculation ofADR. The ADR is calculated as:Revenue earned from rooms /Number of Rooms sold (Webb & Schwartz, 2017).RevPARIt is the abbreviation for Revenue per available room. It is used to assess the operational andfinancial performance of the hotel. Since it comprises of both occupancy rate and room revenue,so it is a crucial parameter of the overall performance of the hotel. RevPAR measures the average daily rate of the hotel and its capability to fill the rooms. So, itconsists of both occupancy rate and ADR. So it provides an idea about the present performanceof the hotel and the value charged by the hotel for its rooms. Hence, hotels must endeavor toenhance their RevPAR.The RevPAR is calculated by two methods:RevPAR: Revenue of the Rooms/Availability of the roomsRevPAR: Average Daily Rate* Occupancy Rate (STENDEN, 2016) . Based on the STR reports provided, provide 3 key findings about how the hotel isperforming against its competitors The key findings regarding the performance of the hotel as compared to its competitors are:
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