Room Sales and Profitability Optimization Report - Hilton Hotel

This report focuses on optimizing room sales and maximizing profitability for the London Hilton on Park Lane, a 5-star hotel with approximately 250 rooms. It addresses strategies such as price variations, distribution channels, and the importance of high-quality service to increase sales. The report explores sales techniques applicable to different staff roles, including the use of social media, customer relationship management, and loyalty programs. It emphasizes the significance of occupancy forecasting, statistical data analysis, and revenue management strategies to achieve financial goals. Furthermore, the report discusses the importance of a well-structured tariff system and the need to adapt to customer profiles and market-based pricing. The report also includes the comparison of actual performance against projected performance and the role of staff motivation in driving sales. The study provides actionable insights into maximizing revenue per available room and achieving overall business objectives.

ROOM DEV OPER
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
Optimizing room sales while maximizing profitability..............................................................1
Techniques of sales that can be used by different staff within room divisions...........................3
The importance of using occupancy forecast and use of statistical data.....................................5
Comparison of actual performance against projected performance............................................9
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
The London Hilton on park lane is a hotel that is located on park lane. Around 250 rooms
are there in this hotel and comes in the category of 5 star hotels. At a very high standards all
rooms are decorated. In the centre of city the hotel is located. The responsibility of room division
manager at this hotel is to monitor food service area, bar area, restaurants and the rooms of the
hotel (Hilton hotel london park lane, 2017). They need to check whether all high standards of
hotel maintained in these areas to provide customers with luxurious stay at this hotel.
This report will discuss the ways by which the room sales can be optimized while
maximizing profitability. In this price variations, distribution channels etc will be discussed. The
techniques of sales that can be used by different types of staff will also be discussed in this report
by giving suitable examples. The customer's loyalty schemes and tariff structure etc will be
discussed. This report will also present the importance of occupancy forecast and use of
statistical data. Some performance indicators regarding room and guest will be discussed. The
comparison of actual performance against projected performance will also be done in this report.
Optimizing room sales while maximizing profitability
Being hired as the room divisions manager of Hilton hotel it is my duty and responsibility
to maximize room sales while maximizing profitability. This will help hotel to earn profit and
will also be good for reputation of hotel. In order to increase the sales of rooms the hotel can do
some variations in their price. For an instance the average rates higher than rivals can be
maintained by hotel in order to generate high revenue per available room. The demands among
customers will increase due to lowering of price of rooms. The hotel will perform better when
the prices are higher than the competition. The quality of service that is offered to customers also
need to be higher to increase a sales. Not just charging higher revenue in comparison with
competition will increase sales. But the manager need to focus on design, service of the rooms
that is given to customers. The high standard services need to be given to customers in hotel. In
order to support the hotel the right technological tools should be selected. As selection of right
tools will help the staff to spent most of their time delighting guest and not facing any issues in
computers or dealing with sheets of paper. The tour operator contract need to be made so that
tour operator can suggest hotel to tourists who visits UK. By contacting with tour operator more
number of people will come to know about this hotel and they will visit this hotel .Due to this the
sales and profit will increase (Solnet, Boztug and Dolnicar, 2016.). The promotions can also be
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done of the hotelier social media sites such as Facebook can be used. In the Facebook a web
page of hotel will be made. In that web page all information regrading services and facilities that
is given in the hotel will be presented through imagesetter the image the facilities and services
that is given in the room such as free Wi-Fi, freeze, air-conditioner etc will be depicted. This
web page will be updated on the regular basis so that people can get the latest updates regarding
this hotel. The local websites ,blogs etc can also be used for promotions. During some festivals
season the hotel can have some offer such as 20% off on rooms and promote these offers through
Facebook, blogs etc. The customers are attracted towards such offers and this will help the hotel
to increase sales. The hotel can have rating system in which customers who have visited hotel
can give their feedback by using these ratings.
In rating system on the scale of 1-10 they can rank. If they are happy with the services
and ambience they can give 10 and 1 is if they are not happy with quality services that is given in
hotel. This rating system will help hotel in 2 ways. Firstly, if the ratings are good then more
number of customers will be there in hotel and secondly they will get to know about areas on
which they ned to work in order to optimize their room sales. In order to sell out rooms the staff
need to be motivated and encouraged where they will walk behind customers to show them
rooms and they will introduce the guests about ambience of the room .The yield management
strategies can be used (Sharma and Sharma, 2015) .In this the product or service can be sold to
correct customer at the right time and at right price. This will not only increase the rates of room
and increase rates of occupancy about also maximize the revenue per available room .The
forecast demand, optimize demand, control demand and monitor demands are four segments of
revenue management that will help hotel to achieve its goals. In order to maximize revenue or
profits the variable pricing strategy can be sued in hotel based on understanding of behaviour of
customers. For several major industrial yield management is a large generator of revenue. This
hotel can use this in order to calculate its rate, rooms and restrictions on sales so that maximum
return can be achieved by hotels (Zheng, 2014).
This will also measure the stay length of customers, non-refundable tax etc. All
constrained and unconstrained demand are measured by this system. The forecast demand will
help the hotel to predict the demand in future situation. At any time of year forecasting can be
done by large hotels around the globe. The calculations can be used to forecast future bookings
and demand. On a month to moth basis also forecasting can be used .The better understanding
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about expectation of customers about the room facilities of hotel will be provided by revenue
management. The insight understanding about requirements and needs of customers will be
provided as research is done in revenue management. With this hotel one find out how to
optimized its sales and earn profit. By this I found out that in my hotel the business travels who
are travelling need easy access to internet so the management of hotel provided free wireless
internet in all rooms of hotel. A competitive pricing strategy of the hotel can be created with
revenue management (Schwartz, Altin and Singal, 2017). Over the rivals it will give the
company an edge. The revenue management will reduce hotel to new market that is
available .For example hotels that pay attention on only business travellers might discover that
there are some family travellers who are visiting UK for popular destination that are located. So,
on the basis of this promotion will be done by hotel to sell out its room and services to them. In
order to target more number of customers sales and marketing representatives can be used to
develop programs .The coordination of division can be done with revenue management in hotel.
Booking forecasts can be used by hotel in order to predict the future booking of hotels. All this
can be don in order to maximize the profit for the hotel and also more number of rooms to
travellers.
Techniques of sales that can be used by different staff within room divisions
The main objective of this hotel is to have all rooms full all year round. So, in order to
achieve this the strategies of sales are used by hotels.
Social media outlets - It is cost-effective methods and can target large amount of customers in
the public. As today all people use social media such as Facebook, twitter, blogs etc so the hotel
can do marketing of its services at these sites. The special pricing promotions can also be
announced by using social media. Any new feature and new services can also be announced by
using these media. The honeymoon special packages and some other packages that are available
in the hotel can be announced through these media. The users that are viewing these sites can
also be trackers and these visitors can then be approached by hotel in order to sell out services.
Customer relation – In order to generate revenue the healthy relations need to be maintained
with customer so that they want to visit hotel gain. All the facilities that are required by
customers need to be fulfilled (Lam and Lei, 2015). The excellent services should be given to
them. Catering must be done in away so that they feel privilege to visit hotel next time as well.
To repeat customers the loyalty program in the form of discounts,loyalty cards etc can be given.
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Membership card
In order to increase sales for hotel loyalty is an essential tool. If the loyalty is given to
among guests by hotels then they will use the same hotel each time when they will travel. The
membership program can be offered to guest that rewards guests who visit the hotel frequently.
In this extra amenities or free nights are given to those guests. The visitors that are visiting hotel
on a regular basis such as business ventures membership need to be given to them (Kimmelman
and Cooper, 2015). So, that with this membership that is given they feel happy and they will
suggest other people also about hotel
Online discounts – For online or smart booking the hotel can offer special rates. A lot of time
and effort of person is saved while booking hotel online. The young customers will more
attracted towards it as they are more tech savvy .The long term relationship with the customer
are build by hotel and there are chances that young people have long filled with future stay at
hotelier, online discounts can be given to them. The online discounts will help the hotel to attract
more number of young customers to hotel.
Reception, room attendants - These people also play an important role in increasing sales of
hotel. The receptionist that is attending calls and reserving rooms need to be polite to them and
should provide customers with correct details about rooms. They should try to sale room on the
phone about services that will be given to them during the stay at hotel. In order to repeat
customers again the attends should make sure that all needs of customer regarding water
facilities, cleaning should be fulfilled. At regular intervals they should check customers to make
sure that there are needs are fulfilled. With these customers will be satisfied and will visit hotel
again.
Tariff structure – To sell out the rooms to customers the rates of rooms will be decided. The
single room prices will be class in comparison with double room and triple room. The terms and
condition will also be stated that at age of 10 years the children will not be charged .The
complimentary breakfast will be available at time from 8 a.m.-10.30 a.m. In case of visitors want
extra bed then they will be charged extra for it. As per the rules of UK government tax will be
charged on services that are given to them. The factors that will decide room tariff will be profile
of customers (Kim,Cho and Brymer, 2013). Their social status, capacity of paying etc. Market-
based pricing will decide the
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Source of booking – The hotel will use central reservation, agents, airline in order to expand its
market. The hotel will give some money to the operators and they will suggest traveler who are
travelling hotel about Hilton hotel .They will make traveller aware about room facilities such as
presidential suits, mini-suits and an executive floor for business travellers that is provided by this
hotel. These operators can help the hotel to increase their sales as they will make clients aware
about hotel and its services (Kim and Park, 2017). The hotel can increase its contact with travel
operators in order to increase the sales of rooms
In case of over-booking the policies such as no-shows and cancellation need to be
followed. So, that the booking once made cannot be cancelled and other polices need to be
followed at hotel. Different -different packages as per the requirement of particular season can be
offered by hotel to maximize its sales and gain profit from it. In off season hotel can offer some
offers such as free gifts, special break fast etc to attract more number of customers. As a room
divisions manager,I will conduct a research in order to find out the requirement of customers
during stay at hotel. By using social media sites,internet etc this research can be done to gain
insight knowledge about preference of customer behavior regrading selection of hotel while
traveling or for business venture.
The importance of using occupancy forecast and use of statistical data
In hotel the occupancy forecast and statistical data can be used to find out the number of
rooms that are occupied by the customer and with this hotel will be bale to know about rooms
that are still empty. With statistical information hotels can measure its performance. A means of
boosting can also be provided by statistics. A valuable information about likes and dislike about
customer can be found with use of statistical data. In order to compete with other hotel also this
data can be used.
A report of Hilton hotel
With the revenue and yield management Hilton five star hotel will sell its services to right
customer at right price (KARADAG, 2017). In order to manage yield efficiently many pricing
strategies will be sued at hotel. The strategies of rooms will as follows
 Types of rooms
 Bedding type
 Number of guests booking the room
 Packages
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seasonal strategies
This will depend upon popular and unpopular time
 High rates and low rates
 Day of week rates
This hotel will try to sub-divide the market .It will strategy mainly families and young adults and
business travelers who are visiting hotel for leisure purpose. It will try to make out stay of these
guest lavishing and luxurious. The online ads will be given by hotels and e-mail campaigns to
target segment and will offer them facilities as per their needs.
The pricing strategy that will be used by hotel will be open price strategy. Based on the price of
services the customer can choose and select their brand. This will help hotel to maximize its
profit by making decision of pricing precise. With an open strategy there are some consideration
that is taken into account
Type of room – Based on demand room pricing should be done. The fixed modifiers to
differentiate room price need not be used. The room price based on demand help to achieve
greater flexibility and adaptability. For an instance in the hotel if less demand is there for double
suits then occupancy can be maximized by preferring this suits at lower price to guests.
Similarly, if demand for single suit is more than they can be sold to customers at a high price.
Discounts – Instead of using static percentage off bets available rate one can use flexible
discount at hotel. The room performance can be monitored by offering up to 20% off on room
packages. This will help hotel to know about room package that is more preferred by guest.
Special corporate pricing – Within a short period these commercial guests will book a hotel.
They have a large budget for travel (Hultman, 2016.). One commercial rate for business travelers
in market will be offered as the demand of corporate is limited.
Contract agreements- When there is a need to supply constant guestrooms then contract
agreements are designed. The foundation for constant occupancy can be provided when hotel
with a large supply of guest- rooms .From these agreements the hotel will benefit.
The revenue cross all departments can be made such as in marketing,sales ,distribution and
loyalty.
Inventory management- The inventory is maintained by revenue managers through “straight line
availability” it is process by which at all times it is made sure at hotel that different types of
guest rooms are made available. The specific room types will be booked by guests by suing this
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Forecasting - The revenue management system that is used in hotel is newest as forecast by
market segment .In the process of pricing and inventory management the historical information
will guide hotel (Guha Thakurta and Guha Thakurta, 2016).
Average daily room rate – With this the hotel can calculate the average price or cots of each
room that is sold by hotel at that particular day. This will help the hotel to calculate their
performance against other hotels that is of same size, occupation and clientele. This can be
calculated
Average daily rate- Rom revenue/room sold
Suppose if the revenue of hotel is $ 100.000 and room sold are 250 then = $400,00
In this house use and complimentary rooms are not included.
Revenue per available room – Within a certain period this will help hotel to find out the revenue
that is made by hotel.
Formula for calculating = Room revenue/total rooms available
With this one can analyze income as percentage of the sales of room .
Cost per available room- In the hotel it will help to calculate the average cost per room that is
occupied. For each room the operating cost can be measured and analyzed (Boahen, Quansah
and Sarpong, 2013.).
Formula- Total cost of rooms or departments/Rooms that are sold
Occupancy forecast for different types of rooms -
Day Date Number of Double-
suits occupied
Number of
Presidential
suits
occupied
Number of
Mini-suits
occupied
Monday 17/08/2017 16 12 13
Tuesday 18/08/2017 12 12 15
Wednesday 19/08/2017 20 14 18
Thursday 20/08/2017 18 13 18
Friday 21/08/2017 12 12 19
Saturday 22/08/2017 8 18 14
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Sunday 23/08/2017 12 12 13
Total
occupied
98 93 110
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Gross operating profit per available room- The performance of hotel can be looked by using this.
In order to achieve the objective of hotel this will help to make modifications. In order to
complete drill down process of revenue management it will allow hotels to apply the laws. The
changes or modification will not only be done in top-line but also it will align bottom-line as
well (Cetin, Demirçiftçi and Bilgihan, 2016). At any given time the value of asset can be seen
with gross operating profit per available room. There are 2 assets in hotel that is real estate asset
and an operating business.
Formula – Gross operating profit/Available rooms
Comparison of actual performance against projected performance
In comparison, with actual performance the hotel performance is good. The marketing
and pricing policy that is made by company is effective as most of the rooms are occupied and
booked (Balakrishnan,Goico and Arjmand, 2015). The company is used using open strategy that
is per the demand of rooms the prices of rooms will be decide and this strategy is working. The
demand for mini-suits is more in comparison with presidential and double-suits so the price of
that room can be made hire by the hotel to earn profiterole occupancy percentage of rooms is
higher that means that rooms are occupied by guests .The marketing policy of hotel to promote
the services that is given at hotel is working as the customers are vising hotel are in more in
number. The receptionist, staff are working well towards their job. They are taking care of needs
of customer and attending them and at continuous period that they are checking whether the
customers needs are fulfilled or not.
CONCLUSION
Thus summing up the above report it can be concluded that efficient tools need to be used
in hotel in order to increase sales of hotel and earn profit. The hotel can use increase their contact
with travel operators so that travellers booking their destination can come to know about services
that is given to visitors in Hilton hotel. The various marketing strategies such as advertisement,
social media site such as Facebook, twitter etc can be used by hotel in order to attract more
number of customers and expand their market. The revenue management will help the hotel to
make strategies in order to sell its room to more customers. The hotel will make use of open
pricing strategy .In this as per the demand of rooms the pricing of rooms will be done. The
occupancy forecast will help hotel in order to find out number of rooms at hotel are occupied in a
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hotel. The performance of hotel can be evaluated by this. The marketing and pricing policy of
hotel is good and most of the rooms at hotel is occupied most of time. In hotel special offers are
given to regular visitors such as membership card and free gifts and free night to stay at hotel.
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