In the hotel industry, maximizing sales and high-quality service provisions while maintaining a loyal and satisfied customer base can be a daunting task. Vibrant leadership in a hotel enterprise should involve clear guidelines on how the hotel revenue or yield is to be managed (Hotel, Catering & Institutional Management Association, 2002). Such programs should articulately provide an in-depth analysis of the various sales techniques that the management can use in promoting and maximizing revenue and forecasting customers’ preferences.
4.1. Explaining revenue management
The processes of revenue yield management entail forecasting the behavior and indulgence of a customer and influencing this particular behavior predicted to maximize sales and profits (Professional Association of Innkeepers International 2010). The three vital aspects underlying yield management application include; the resource should be recurrent, perishable, and highly demanded in the market.
The demand for a resource is managed and monitored through articulately managed promotional and distributional channels in an organization. These channels include those that directly interface the customers to the hotel products and brands such as using advertisement through the internets, television media, and other social websites (Society of Incorporated Accountants and Auditors (Great Britain), Society of Incorporated Accountants (Great Britain), & Institute of Chartered Accountants in England and Wales 2003). The application of promotional activities using online sites encourages viral advertisements of the hotel brands and services offered. As a result, the customers can search for the hotel products and brands and in the process become knowledgeable about what to expect when they visit the hotel. Similarly, the hotel can employ the services of middlemen and agents in the promotion of the services offered by the hotel to existing customers and potential customers.
In the maximization of revenue, it is paramount that the hotel develops a fixed pricing mechanism and introduction of tariffs based on the standard of service offered, quality, and duration of service, among other factors. The charges should be varied depending on the arrival time of the customer and the length of their stay at the hotel. For instance, during peak seasons, most rooms in the hotel remains fully booked and may attract higher fees due to demand, while in the slump season, the room accommodation prices mostly stay down to attract more customers (Teare, Ingram & Savini 2012). The hotel can apply the price discounting concept, especially in the case of a particular customer who pays the full accommodation fees in advance booking at the time of reservation. In the case of an increase in the waiting time by a client, the hotel may decide to reduce the prices to lure the particular customer into remaining loyal to the hotel.
The evaluation of current bookings and the estimation of reservations made by the customers are done through proper management of the inventories and stock by the hotel management. However, in the management of the hotel revenue or yield, some ethical issues may arise that may jeopardize the operations of the hotel in one way or another. For example, the hotel management may fail to inform its customers about the price changes and the discount services offered by the hotel.
The principal merit of the revenue management system in the hospitality industry is that it enhances hotel productivity, ensures that the resources are utilized optimally, and increases the hotel sales and market share. The main challenge of the revenue management yield system is that most customers consider price differentiations as an unethical practice that only focuses on the generation of income at the expense of customers’ expectations.
4.2. Techniques used in data analysis to promote and maximize revenue
Developing customers’ loyalty programs by providing the hotel with a loyal customer base with loyalty cards, discounts, and other incentives is deemed necessary to retain them in the hotel’s market share (Teare, Ingram & Savini 2012). As a result, the customers will develop a strong attachment to the hotel’s brands and products, and with a strong desire and willingness to return to the hotel time and again.
Proper management of reservations with good access to booking details in the hotel websites that is updated on a regular basis encourages the hotel clients to do more business with the hotel.
The sales representatives can induce the existing customer to upgrade the hotel services to help in the revenue collection (Teare, Ingram & Savini 2012). For example, the customer can be persuaded to consider taking a spacious room with a better view, but at a higher expense.
When a first-time customer is satisfied with the services offered by the hotel, the customer will most likely give referrals in the hotel feedback forms that the hotel management will evaluate to increase performances.
The rates of different services offered by the hotel should be well structured to avoid any discrepancy in room charges, depending on the market in which the hotel operates.
The hotel should provide tariffs on negotiating the final settlements during peak and slump seasons. For instance, a customer who has a corporate package should be charged separately from a family client.
4.3. Evaluating the usage of forecasting and statistical data in the room division
Forecasting is an important aspect in rooms division as applied in hospitality and tourism management. Forecasting as a process deals with estimation, and based on the historical guest turnout, the management gets the opportunity to monitor and estimate the value of both controllable and uncontrollable variables (Kasavana & Brooks 2009). Hotel management uses forecasting techniques to estimate the number of guest based on future expectations for the purposes of adequate preparation through facility and equipment purchases. In other words, managers must plan to take future actions based on the past results of the hotel (Teare, Ingram & Savini 2012). The process of forecasting starts with generation of statistical data for the past operational years, and using such data, the management can design better methods of reaching their potential customers with an aim of establishing better working relationships.
As already stated, forecasting techniques enable hotel managers to determine future successes and/or failure based of the past performances and recent activities of the hotel (American Resort and Residential Development Association 1900). This means that the statistical results used in forecasting makes it possible for make influential decisions that with have impact on future performance of the hotel. Such decisions may include improved marketing strategies, expansion of the accommodation services, creating more departments and engaging in more rooms division to accommodate the growing number of guest. A sufficiently collected and analyzed data will give information, which the hotel management can use to gauge the position of the hotel within the industry and also to design proper plans of making accommodation services more efficient and effective for the purposes of meeting the needs of customers (Hotel Sales & Marketing Association International 2007). Otherwise, hotels can either maintain or improve their operations once they have data on past performance. The data can be used to make improvements where the hotel performed dismally or to maintain standards of performance where the hotel feels satisfied with its past activities. In general, forecasting is affected by the kind of statistical data available, analysis and the final presentation. The major objective of any hotel within the industry is to maximize revenues alongside meeting the taste of consumers. With such an objective, the only way to be sure of a rise in future revenues is by using available information or data as a prediction for future improvements.
4.4. Describing with calculation the performance indicators used to measure accommodation sales success
The May room breakdown for the Five Seasons Hotel in Winchester can be presented in the form of calculations, as shown below for better analysis and forecasting.
Calculation of room occupancy percentages = (Occupancy/Total Number of Rooms) x 100% = (180/215) x 100% = 83.7%
Calculation of sleeper occupancy percentages = (Guests/total beds) x 100% = (260/355) x 100% = 73.2%
Calculation of average rooms rate (ARR) = (11.900/180) = $ 66.11
The calculations presented above are the main performance indicators that could be used to measure the success of accommodation sales.
All the calculations presented on hotel management have indicated significant levels of income and profits generated by the accommodation department. In other words, hotels generate a lot of revenues from their accommodations services due to constant inflow of guest from various parts of the world (DeFranco 2006). Increasing rooms division and relevant accommodation services will therefore lead to further revenue increases, and indications that the hotel is active ad highly competitive within the industry.
Competition is a key factor in the hospitality industry and in different occasions, hotels have resorted to exit the market, especially when they continue to realize losses (DeFranco 2006). Forecasting based on occupancy calculations allows hotels to manage their resources and use every little opportunity to improve the range of services offered.
American Resort and Residential Development Association, 1900, Developments: The news magazine for the resort-recreational real estate and community development industries. Washington, D.C: American Resort & Residential Development Association.
DeFranco, A, L, 2006, Hospitality Financial Management. Hoboken: John Wiley & Sons.
Hotel Sales & Marketing Association International, (Eds.), 2007, HSMAI marketing review. Washington, D.C.: The Association.
Hotel, Catering & Institutional Management Association. (Eds.), 2002, Hospitality. London: Hotel, Catering, and Institutional Management Association.
Kasavana, M, L, & Brooks, R, (Eds.), 2009, Front office procedures. East Lansing, Mich: Educational Institute, American Hotel & Motel Association.
Professional Association of Innkeepers International, (Eds.), 2010, Industry study of bed-and-breakfast/country inns: Operations, marketing & finances. Santa Barbara, CA: The Association.
Society of Incorporated Accountants and Auditors (Great Britain), Society of Incorporated Accountants (Great Britain), & Institute of Chartered Accountants in England and Wales, (Eds.), 2003, Accountancy. London: Society of Incorporated Accountants and Auditors.
Teare, R, Ingram, H, & Savini, S, 2012, Strategic management: A resource-based approach for the hospitality and tourism industries. London:
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