Revenue Management Exam 3 New

Three types of forecast and their objective:
• Strategic – incorporating occupancy and demand into inventory
• Revenue – using past budgets to predict future trends
• Operational – scheduling
Critical elements to consider for the forecast:
room nights, revenue, booking pace, no shows, group rooms, departures, extended stays, denials, rate changes, cancellations, transient, arrivals, walk-ins, early departures, length of stay
Booking pace and daily pick up:
• Booking pace needs to be monitored for the current and future days to ensure that it is stay on track to achieve the forecasted numbers and to react to any deviations if it is not
• Daily pick up or the ability to monitor the pace statistics should be tracked for transient and groups
Special events:
marketing and advertising events, renovations, city-wide, manual restrictions
Internal and external factor to consider during the development of pricing strategies
• Internal
o Financial goals
o Physical and service products
o Customer appeal
o Historical performance
• External
o Market conditions
o Hotel’s competitive positioning
o Pricing position
o Competitor activity
o Target clients
o Long-term strategic plans
o New product entry
Static vs. Dynamic Pricing:
• Static – charging one price for a product
o Simple
o Single product price
o No segmentation
o Significant demand
o No differentiation to justify price differences
• Dynamic – applying revenue management by selling the same products at different prices
o Understanding of hotels client base
o Different negotiation approach
o Skilled revenue committee
o Strong tech support
o Reliance on operations and processes supporting the technology
Promotional and discount planning :
make sure they are incorporated only during need periods, alleviate last minute planning, consistent with overall strategy
Creating rate structure:
will define the number of rates that the hotel offers and the qualifications it places on each rate, determining when and how the rate is made available
Inventory control strategies:
final step in executing a RM strategy – strategically and tactically determines how much total capacity is available and how much of each product will be sold
Understand a list of most common stay controls:
• Open – free sell, no restriction on availability
• Closed – no availability is for sale
• No arrival or closed – used to extend bookings into the surrounding dates or only accept lengths of stay that will include one or more of the shoulder dates
• No departure/closed – no reservations are accepted that depart on a date
• Max length – goal is to restrict a discounted rate or package
• Minimum length – periods when occupancy of one or more nights surrounding a high demand night is low
• Allocations – specific number of rooms are allowed to be sold
Wash
an estimate of no shows and cancellations
Costs of walking – the result of a guest booking but the hotel oversold
• Tangible – payout to the receiving hotel to which the guests are being sent and transportation costs
• Intangible – ill will or potential loss of customer to competition
• Reputation of hotel
Stay pattern management
to maximize revenue you want to accept the optimal number of reservations for each stay patter, not the greatest number of reservations for each individual day

• The combination of arrival date and length of stay
• To optimize revenue, maximize stay patterns not individual days

Channel management:
• Pricing
• Rate management
• Availability