Hotel Revenue Management Strategies

This assignment delves into the realm of hotel revenue management. It examines key concepts such as forecasting occupancy, pricing strategies, and customer segmentation to optimize revenue generation in the hospitality industry. The analysis draws upon various academic sources and real-world examples to illustrate effective revenue management practices.

Room Division

Table of Contents
Introduction .....................................................................................................................................4
A. Analyzing the key aspects of legislation and regulatory requirements in the context of
room division operations (1.3)....................................................................................................4
b. Reviewing the roles and responsibilities of a selection of accommodation and reception
staff (1.2).....................................................................................................................................5
c. Evaluating the variety of services of accommodation and front office department in
different organizations (1.1, 1.4).................................................................................................6
d) (2.1,3.1) Importance of the front of house area and the accommodation services to the.......1
effective management.................................................................................................................1
e) (2.2, 3.2) Key aspect of planning and management of the front of house area and................2
accommodation services.............................................................................................................2
F. Evaluation the operational issues which affects the management and business performance
of front hose and accommodation area or staff (2.3, 3.3)...........................................................4
Task B..............................................................................................................................................5
a (4.1) Revenue/Yield management ...........................................................................................5
b (4.2) Analysis of Sales techniques to maximize revenue.........................................................6
c (4.3) Purpose and use of forecasting and statistical data within rooms division .....................7
d (4.4) Room division performance indicators to measure the success of accommodation ......7
Conclusion .....................................................................................................................................9
REFERENCES..............................................................................................................................10

Introduction
The hospitality industry is growing at rapid pace in present scenario. It is seen that large
number of hotels are developing and achieving significant level of growth. However, it is
essential for the hotel units to support its operations in an efficient manner (Huang, 2013). The
present report emphasizes on evaluating manner in which hotel units can increase their earnings
through effective room division strategies. The first section emphasizes on applying room
division principles on Intercontinental Hotel group (IHG). Further, the second part of report
deals with evaluation of case for five season hotel. The research presented herewith develops
deep understanding of manner in which effective room division strategies can be adopted by
hotel unit.
A. Analyzing the key aspects of legislation and regulatory requirements in the context of room
division operations (1.3)
For the effective room division operations intercontinental hotel requires to follow all the
legal or regulatory requirements. Through this, hotel is able to build distinct position in the mind
of target customers. Key aspects of room division legislation and regulatory requirements are
enumerated below:
 According to the laws and legislation it is the responsibility of management staff of
Intercontinental hotel to maker proper health and safety arrangement for their customers.
In addition to this, according to the Health and Safety act hotel has the responsibility to
provide secured environment to their employees which prevent injury (Woolf, 2015). On
the basis of such legal requirements hotel require to offer standardized, quality and
hygienic accommodation and food product or services to their customers.
 In addition to this, Intercontinental hotel needs to be taken into consideration the needs
and expectations of the customers while designing and diving the room. As per the
regulatory requirements it is the responsibility of the hotel to offer quality and
satisfactorily services to their guest on cost effective rates. Law restricts hotel to charge
higher price form their customers and there by provides protection to guest or customers.
 Furthermore, Intercontinental hotel also requires to make caution arrangements which
provide safety at the time of emergency (Kern and et. al., 2013). Thus, it is the liability
of the hotel to fix the fire bell within the hotel. Besides this, they also needed to possess

first aid box which provide assistance to hotel at the time when any guest injured. Hotel
also needs to recruit coach for gym in order to prevent the bad happening.
 Along with it, it is mandatory for each and every hotel to collect the id proof from their
customers. According to the laws and legislation no one hotel can offer the room services
to their guest (Mei and Zhan, 2013). Besides this, hotel also needs to maintain the record
of their customers in relation to their check in and check out time.
 Intercontinental hotel also has accountability to furnish all the fair and full details about
the room to their customers. On the basis of legal or regulatory aspects hotel also requires
to give information to their customers about the complementary services such as food,
cap facility etc. Which are offered by them along with the room services.
Thus, all the hotels who operates in the hospitality industry including Intercontinental
hotel requires to follow all the law and legislation which are framed by the government.
b. Reviewing the roles and responsibilities of a selection of accommodation and reception staff
(1.2)
Accommodation and service staff has to perform several responsibilities which helps in
evolving the satisfaction among the customers. Member of the both the staff play a signification
role in the growth and development of hotel.
Roles and responsibilities of accommodation staff of Intercontinental hotel are as
follows:
 Accommodation staff of Intercontinental hotel has the responsibility to offer clean and
hygienic environment to their customers in room. They needs to ensure that bed sheet,
towel, curtains etc. are very neat and clean. In the present era, hygiene and quality of the
room or other services which are offered by the hotel have high level of influence upon
the decision making aspect of customers (Mauri, 2013).
 In addition to this, member of the accommodation staff also needs to make sure the
provision of toilets as well as other room appliances such as microwave and mini-
refrigerator shall be provided with the room.
 Along with it, accommodation staff also needs to make proper amenities arrangements
for their guest (Wang, 2012).
Besides this, personnel of accommodation staff also plays an important role in delivering
the food products or other kind of product or services as per the needs and order of customers.

Along with the accommodation staff members of reception staff also play various roles
and responsibilities which make contribution in the well being of an organization are
enumerated below:
 Personnel of the reception has the responsibility to convey all the information to their
customers in relation to gym and pool facilities, culture programs etc.
 Staff member of reception also has the obligation to solve each and every query of their
customers in an effective and satisfactorily manner (Tse and Tung Poon, 2012).
Moreover, customers make high level of interaction with the reception staff so they
require to deal with the each problem the guest in the polite manner.
 Furthermore, the receptionist staff collect the id proof proof of the customers as well as
record the entry and exit time of their customers. Thus, staff members of the reception
plays a vital role in managing the business activities of Intercontinental hotel.
Usually staff member of the receptionist act as a hotel or company in front of the guest.
Thus, they also has the responsibility to meet and greet with their guest in the polite manner. On
the basis of all the above mentioned aspect it can be stated that accommodation and staff member
of reception helps organization in building high level of satisfaction among the customers
(Legohérel and et.al., 2015). With the help of such staff Intercontinental is able to achieve
success in the strategic business arena by enhancing their brand value.
c. Evaluating the variety of services of accommodation and front office department in different
organizations (1.1, 1.4)
There are wide range of the services which accommodation and front office department
offers the customer of hospitality industry. Accommodation department of hospitality industry
offers huge number of rooms and housing services to their customers. Whereas front office
department provides information to their guest or customer about the services which are offered
by hotel. Intercontinental offers different types of housing and accommodation services to their
customers such as bed and breakfast etc. Therefore, services which offered by the personnel of
accommodation and reception staff varies on the room services selection of the customers
(Koupriouchina, van der Rest and Schwartz, 2014). Intercontinental offers numerous room
services which include single division room, double bed room, restaurant, bar, gym, pool and
roof top garden facilities. Room division services of Intercontinental are enumerated below:

 Hotels: Intercontinental offers several room division services to their customers
according to their needs, wants and desires. Hotel provides accommodation facility,
private dining room, bar, gym and swimming pool facility to their customers. In addition
to this, they also offer fun zone facilities for the guest or children. Further, hotel also
offers complementary breakfast, parlor and roof top garden facility (Morse and Smith,
2015). Usually large number of guest prefers to experience the hotel services of
intercontinental because it offers quality services to their customer at reasonable prices.
However, it is to be critically evaluated that if guest opt hotel services then he requires to
make arrangements in relation to their food, cab facility etc. Moreover, all these services
are not the part of hotel arrangements or services (Key roles and functions in hospitality
enterprises, 2011).
 Bed and breakfast: Intercontinental also offers bed and breakfast services to their
customers. This type of room division services include wide rage of facilities which
include bed, food services, cab and laundry services etc. In addition to this, hotel also
provides 24 hour WI-fi facility to their guest. In the bed and breakfast room division
services front office staff of Intercontinental provides standardized and quality services to
their all customers (Schipper and et.al., 2013). However, it is to be critically evaluated
that intercontinental charges high prices from their customers for bed and breakfast
services rather than hotel services.
Moreover, bed and breakfast include wide range of hospitality services form cab to food
which may one of the cause due to which Intercontinental charges high prices for bed
and breakfast services (Duties and responsibilities of hotel staff, 2013).
On the basis of all the above mentioned aspect it can be assessed that Intercontinental is
involved in offering the wide variety of quality room division services to their customers.
Through this, hotel is able to meet the expectation of their guest to the large extent. Besides this,
it also enables organization to attain desired level of outcome or results by offering the wide
range of services to their customers. Through this, company is able to attain the competitive
advantage over others.

d) (2.1,3.1) Importance of the front of house area and the accommodation services to the
effective management
Front of house area
A good front of house area is very important for hotel businesses. It is the first point of
interaction with the guests and visitors and create an brand image to the customer minds. The
front of area refers to all the hotel divisions that deals directly with the customers at initial point.
It should be very classic and well designed because the first impression is the last impression.
Through designing a good front of area (FOH), hotels can enhance their operating efficiency to a
great extent (Calo and et.al., 2015). Moreover, it is a way to attract large number of customers
and increase business revenues. In addition to it, FOH team must have brilliant knowledge about
the surrounding areas of the hotel. It helps to increase the members ability to offer best options to
customers and satisfy their requirements.
In context to Intercontinental hotel group, the front of house area is very well
infrastructured. It create an good image to the customers mind when they entered into the hotel.
Moreover, the company staff is well trained as formal training is provided to the staff. The
training programme of IHG pay special attention to providing best quality of services to the
guests. Initially, the staff welcome their visitors in an friendly manner. They have a confident
body language, good personality, highly trained, knowledgable and well experienced. They are
enjoying their work and provide required information to the customers and satisfying the guest
queries. Moreover, FOH service audit ensure high quality of service standards for the customers.
It ensure safety, security, emotional attachment and trust upon the business. Moreover, the staff
is receiving customer feedbacks to enhance their operational efficiency on a regular basis. For
encouraging and motivating the staff members, IHG also organized a Celebrate Service Week in
which management appreciate the work of the members. Thus, it is clear that front of house are
and well managed staff at this place helps to give memorable experiences to the visitors. It helps
to encourage repeated customer bookings and ensure customer retention. This in turn, IHG
business can enhance their revenues and the profitability and achieve long term business success.
Accommodation services
Accommodation services plays an significant role in visitors decisions. Hotel industry
provides accommodation services to the visitors and guests who visit at another places for
different purpose. Tourists must be provided with all kind of services in their room. It includes

room interior, ambiance, room furniture, room design, cleaning services and housekeeping
services. In context to Intercontinental hotel group, the guests rooms are designed in a well
manner. All the services are available to the customers in their rooms. It designed the guest
rooms in an impressive and attractive way that provide greater level of satisfaction to the visitors.
All the luxurious facilities are available to the visitors in their rooms. The rooms are well
furnished and decorated with the designer lighting (Sultana, 2015). Qualitative and colorful
fabrics and good smelt flower plants have been used by IHG for room decoration. The rooms are
renovated from time to time to meet customer demands and their preferences. Moreover, rooms
are cleaned, well organized and well managed. Furthermore, housekeeping services are also
provided to the customers that uplift their experiences. All the required services are provided to
the visitors such as television, bedrooms and bathrooms services (Hussain, 2012). IHG designed
the rooms in such a way that provide great level of comfort to the visitors and they feel high
level of satisfaction. This in turn, customers do not feel that they are living outside from their
homes and built good customer experiences. This in turn, IHG can achieve its business goals and
enhance their number of visitors.

e) (2.2, 3.2) Key aspect of planning and management of the front of house area and
accommodation services
The management team of Intercontinental hotel group regularly tries to improve its front
of house area and accommodation services. It helps the hotel business to enhance their return and
enjoy higher the success for long term period.
Front office area: It is the starting point of making relationship with the customers.
Therefore IHG managers tries to build up a world class front office area and manage it on a
regular basis. The layout of the reception desk is the most important area under the front offices.
Thus, IHG designs its office and its reception in a well manner. The reception desk furniture is
very good and kept appropriate cleanliness. The reception staff and other members at the front
office express their courtesy and professionalism with the customers (Jones, 2002). It create
positive impact to the visitors mind about the business reputation. IHG's reception area is looking
very attractive and provide a great space to the customers for satisfying their needs. IHG
managers conducts an special training programme for the personnel to trained their employees.
In this programme, each and every important point such as their body language, way of
interaction and communicating with the visitors, eye contact and their personality all will be
learn to the staff. The staff members satisfy all the queries of the customers and provide all the
necessary information required by them. The staff are well dressed and very well trained by the
business. At the front office area, staff facilitates the customers at every point through providing
them qualitative services (Ahmad and Scott, 2014). It provides transportation, baggage handling,
bill settlement, check out, currency exchange, handling guest accounts, issuing keys, room
registration, room assignment and so on. Moreover, service audit programme has been organized
for improving the staff performance and eliminate any negative consequences.
Accommodation services: Along with the front office deigning, Intercontinental hotel
group provides luxurious accommodation services to the tourists. The rooms are well structured
any fulfill all the necessities of the consumers. The management designed bedroom with best
quality of furniture. The equipment are innovative and high quality of technology has been used
by IHG in their room services. The staff provides laundry, cleaning and maintenance services to
the customers. Furthermore, waste management services has been provided to the customers.
The management fulfills the safety and security need of visitors. IHG designed its guest rooms as
per the visitors requirements and providing all the necessary needs of the customers. Moreover,

the rooms are decorated with flowers and plants (Godara, 2012). Fabrics also has been used
according to the customer choices and their preferences. Wider space has been provided to the
visitors in their rooms. Moreover, colorful and qualitative curtains and fabrics are used for room
decorations. Designing lights are using by IHG to decorate the rooms. Housekeeping staff are
also well trained and skilled in their work and satisfy the customer requirements in the possible
way. Televisions services are also provided to fulfill customers entertainment requirements. Air
conditions and heating equipment are also attached to the rooms. Bathrooms are maintained very
clean and providing with necessary needs such as soap, shampoo, lotion, mirror and tissue.
Furthermore, self catering equipment also has been provided to the customers. It helps to build
good relationship with the customers and increase the repeated business and enhance their
profitability (Chaves, Freitas and Vieira, 2012). By doing this, IHG management enhancing their
business and make business growth. Further, high quality of standards are maintained to meet
customer demands in an efficient manner.
F. Evaluation the operational issues which affects the management and business performance of
front hose and accommodation area or staff (2.3, 3.3)
There are several number of operational issues which are faced by Intercontinental that
affects the management and business performance of front house and accommodation staff.
Operation issues consists of those which are faced by the staff of front office and
accommodation department while they deal with their guest. Issues which are occurred at
operational level adversely affects the growth and development aspect of hotel. Problem which
operational level staff faces negatively impacts the profitability aspect of an organization.
Moreover, operational issues consists of the situation when employee faces difficulty in
implementing the policies and strategies of an organization (Ekiz, Khoo-Lattimore and
Memarzadeh, 2012). Thus, hotel requires to make periodical review of the issues which are faced
by the operational level employees. Through this, hotel is able to undertake effective measures
within the suitable time frame and there by helps organization in improving their financial and
non-financial position within the market. Issues which are faced by the personnel of front office
staff and accommodation staff are enumerated below:
 Lack of competent skills and abilities are the main factor which creates difficulty in front
of the employee to perform their activities or functions in an effective manner. It is one of

the main issue which closely impacts the productivity and profitability of an organization.
For instance: If staff members of front office department fails to meet and greet the
customers in the polite and effective manner then it negatively affects the decision
making of the customers. Besides this, it also place impact upon the customer satisfaction
and loyalty in the negative direction. Thus, intercontinental requires to organize training
and development session for their employees. Through this, hotel is able to offer the
quality and satisfactorily services to their customers and there by improving the brand
value as well as market share of an organization.
 In addition to this, operational level employees also facing difficulty in communicate the
pricing policies to their customers if such structure is not properly framed. In this,
employees of Intercontinental are unable to charge the suitable price for the product or
services offered by them and there negatively affects the sales and gross margin of an
organization.
Task B
a (4.1) Revenue/Yield management
The concept of revenue management in case of service industry such as hospitality is
considered to be highly important in nature. In case of hospitality sector, the capability to serve
customers is limited to their size. The businesses operating in hospitality sector emphasizes on
maximizing revenue in similar to that of manufacturing or retail units. However, unlike retail
units the organizations in hospitality sector cannot strive hard to offer more than available
capacities. For instance, as seen in case of five season hotel 215 rooms with 355 beds are
available with the hotel unit. In case, the hotel unit gets an order for after two months to book
160 rooms with 250 beds. The demand arises of 60 twin rooms, 70 single bed rooms and 30
double rooms. However, the customer for such a big order demands discount of approximately
25%. In such a situation, hotel unit needs to revive profits after discount.
The hotel unit needs to revive profits in case it books an order prior to two months after
allowing discount of 25% and profits earned due to demand that arises on immediate basis

without any discounts. The hotel unit needs to consider both the circumstances and forecast
profit for the business into consideration. It is necessary for hotel unit to forecast future revenue
and profits. The hotel unit has an option to either satisfy demand for the current booking in
advance or regular customers. It cannot in any case increase the revenue by satisfying both kinds
of demand due to limited capacity of hotel unit. It can be therefore said that the revenue/yield
management in case of hospitality sector is complex in nature. The business unit can calculate its
yield management in percentage through adoption of following formula:
It is essential for hotel unit to maximize its yield/revenue management so as to support
business growth. The hotel unit needs to ascertain its past occupancy rate and forecast its future
occupancy. This in turn helps in estimating revenue that can be earned by hotel unit in future.
The hotel unit need not only strive at increasing revenue but also on increasing profitability
(Huang, 2013). The business unit should plan its operations in a manner that it is able to
maximize its level of occupancy and profitability. It can be therefore said that efficient revenue
management in hospitality sector results in maximizing profits to the highest level due to lower
cost of operations.
b (4.2) Analysis of Sales techniques to maximize revenue
In order to maximize revenue the business unit in each of sector needs to promote its
products and services. In modern era, customers are highly rationale in nature and demand high
quality of services. Moreover, customers in present scenario have easy access to all information.
The businesses in present competitive environment should therefore adopt effective promotional
strategies. The five season hotel needs to adopt effective sales and promotional techniques to
increase its revenue. The hotel unit can consider following techniques to increase its revenue.
Offers and discounts: The hotel unit can provide distinct range of offers and discounts on
its services. This in turn results in attracting large number of customers. The business unit should
strive to achieve 100% occupancy by offering discounts. Moreover, the hotel unit can design
distinct set of offerings so as to attract customers. It can create a package if services for its
customers. These packages should be offered at reasonable price to customers. The hotel unit can
design combination of distinct categories of services in different package. Each of the packages
thereafter caters to demand of different group of customers. The distinct set of offerings will
result in gaining attention of large number of consumers. This in turn results in increasing
revenue for the business unit.

Promotional strategies: The organization needs to create awareness about its services and
products through varied range of promotional strategies. The business unit can advertise its
services and offerings through print media. Moreover, the organization can publish its
advertisements on social networking sites. In present scenario, consumers tend to spend
maximum of their time on social networking sites. The business unit needs to create online portal
for booking and interacting with customers (Woolf, 2015). The easy accessibility in turn results
in attracting large number of customers from different parts of the world.
Core competencies: The business unit should strive to promote its core competencies.
Five season hotel needs to promote itself on quality of services offered to customers. It is the
quality of services that provides hotel unit an edge over its competitors. The organizations should
therefore promote its offerings on the basis of its quality. Moreover, business unit should deliver
the same quality to its customers. This in turn results in not only attracting large number of
customers but also retaining them for long run.
c (4.3) Purpose and use of forecasting and statistical data within rooms division
The forecasting is considered to be highly important in case of rooms division. Five
season hotel needs to forecast its future demand so as to plan its operations in an efficient
manner. The business unit needs to review its statistical data so as to achieve growth in long run.
The manner in which forecasting and statistical data plays an important role in room division is
described underneath.
Price structure: It is through forecasting of future demand and access to all kind of
statistical information that the business unity is able to decide its pricing structure in an efficient
manner. It is essential for the organization to fix up the price that is highly competitive in nature
and guarantees sufficient profitability (Kern and et.al., 2013). In order to fix up the appropriate
price, the organization needs to have access to the information regarding competitors’ prices,
previous demand levels and future demand. Henceforth, it can be said that the forecasting
information and statistical data supports pricing decision of the hotel unit.
Anticipate profitability: It is through forecasting of future demand that the hotel unit is
able to anticipate level of profitability that can be earned in future. It is with anticipation of
profitability that the five season hotel can judge feasibility of future operations. Further, the
organization can evaluate its efficiency on the basis of financial information. It can be therefore

said that the forecasting future information is necessary to anticipate earnings and return
generated through the operations.
Facilitate comparison: The businesses within hospitality sector can compare their
performance through availability of financial figures. It is on the basis of facts and figures that
the businesses are able to compare their performance. Moreover, the standards can be set within
hospitality sector. It can be therefore said that the financial forecast and statistical information
will help in facilitating comparison and setting industry standards.
d (4.4) Room division performance indicators to measure the success of accommodation
The five season hotel can measure business performance through adoption of various
performance indicators. It is through estimation of various performance indicators that the
organization is able to evaluate effectiveness of its operations.
Occupancy rate: It determines the percentage of rooms that are occupied by hotel unit. It
determines the extent to which hotel is capable of employing its total capacity (Mei and Zhan,
2013). The occupancy rate for five season hotel is estimated underneath.
Table 1: Room occupancy rate
Types of rooms
Total
available
Total
occupied
Single rooms 75 55
Twin rooms 60 55
Double rooms 80 70
Total number of
rooms 215 180
Room occupancy
rate
Occupied rooms/ Total number of
available 83.72%
Table 2: Sleeper occupancy rate
Types of rooms
No. of beds
available
Number of beds
occupied
Single rooms 75 55
Twin rooms 120 105
Double rooms 160 100
Total number of
sleepers 355 260
Sleeper Occupied beds/ Total number of 73.24%

occupancy rate beds available
Average daily rate: It indicates the daily rate that is charged per occupied room. It is
calculated by adoption of following formula
Table 3: Average daily rate
Types of
rooms Total available Total occupied Price
Revenu
e
earned
Single rooms 75 55 £ 100 per person/room 5500
Twin rooms 60
50 occupied by
two & 5 by one
£150 per room & 100
in case of single
occupancy 8000
Double rooms 80
30 occupied by
two & 40 by
one £200 per room 14000
Total revenue
earned 27500
Total number
of rooms
available
Average daily
rate
Daily revenue/
number of room
occupied 152.78
In order to calculate average daily rate, the prices for different categories of rooms are assumed.
As per the assumed values and estimations, £ 152.78 is charged preoccupied room by five season
hotel.
Yield percentage: It is the yield percentage that is generated by hotel unit as compare to
potential revenue. The same is calculated for five season hotel underneath.
Table 4: Yield percentage
Revenue earned Potential revenue
5500 7500
8000 9000
14000 16000
27500 32500
Yield percentage (Revenue earned/ potential revenue) 85%

As per the yield percentage, it can be said that the five season hotel is generating
sufficient amount of yield. The business unit is therefore considered to operate in an efficient
manner.
Conclusion
From this project report it has been concluded that Intercontinental requires to follow all
the rules and regulations which are imposed by UK government. Besides this, it can be
concluded that front and accommodation staff perform several role and responsibility which
helps organization in getting success in the dynamic business arena. Intercontinental undertakes
promotional strategies and campaign to maximize their sales and revenue aspect.

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