Summary of revenu management for stenden module design based upon lectures and the book Introduction to Revenue Management for the Hospitality Industry
Introduction to Revenue Management for the Hospitality Industry
Important calculations
Actual revenue: rooms sold x actual room price
Maximum revenue: rooms available x highest published price
Occupancy: rooms sold / rooms available x 100
RevPar: actual revenue / rooms available
RevPor: actual revenue / rooms sold
Yield: actual revenue / maximum revenue x 100
Fair share: max. revenue own hotel / max revenue market x 100
Actual share: actual revenue own hotel / actual revenue market share x 100
Chapter 4. Market segmentation and selection
Market segmentation: dividing a market into smaller specific segments, sharing the
same characteristics.
Demography: study of characteristics of a population. (Age, gender, education,
income, religion, nationality etc).
Frequent traveller programme: to reward loyal patronage and encourage repeat
business.
Transient: temporary individual hospitality customer
- alone and purchasing a product for a short time
Group business: more than 2 individuals coming together for a common
reason (football team flying together etc).
Sub segments:
Leisure
- Vacation
- VFR (visit friends & relatives)
- special events (weddings)
Business
- Job responsibility
- Attending trainings
- Conferences with co workers
(corporate, government, associates)
See page 44 for more information
Wholesaler: a person who purchases individual travel components at a discount,
based on volume and repackages the components and sells them to a consumer on
retail basis, either directly through the wholesaler organization or via a travel agent/
tour operator.
Free sell: rooms considered to be sold, based upon space
Wash factor: predetermined percentage of usage based upon historical data and
experience.
Environmental scanning: constantly monitoring and assessing the environment to
spot changes and emerging trends.
American generational sub segments:
Silver haired senior aka The silent generation
- born to 1946
- survived 1st/2nd world war
- don’t broadcast purchase intentions
- expect value for their money
, Baby boomers
- born between 1946 – 1964
- anxious and ready to spend
- highest medium income of all generations
- no plans to retire
Generation X aka Baby busters
- born between 1965 – 1976
- very individualistic
- extremely value aware
Generation Y aka Echo boomers
- born between 1977 – 1994
- extremely comfortable with technology
- extremely brand conscious
Millennials
- born after 1994
Based upon market segment & trend analysis, organizations will be able to develop new
products and services to attract and retain their desired mix of customers.
Displacement: replacing one customer for another
Displacement analysis: company assesses the worth of one customer vs. another
Customer worth: how much value a particular customer is to a company
Customer value: how much the customer wants/needs the product (worth of product)
Primary purchase: main purchase made during a single/series of transactions
Ancillary purchase: supplementary or additional purchase made during a single/series
of transactions.
Total CW = (Primary Rev+ Ancillary Rev – Acquisition Cost) x Propensity Y
Propensity Y: How often a guest comes
Example:
Esther comes 10 times a year at hotel Ommen, pays €250 per night per room and eats diner
€35 + breakfast €15. €1 per visit acquisition costs.
CW = 250 + 50 (35+15) – 1 x 10 = €2990
CRM (Customer Relationship Management): to describe strategies and tactics
developed to acquire and retain customers.
Chapter 5. Internal assessment and competitive analysis
Competitor: a rival with whom one competes
Competitive set: an organization’s primary direct competitors
Secondary competitors: not in organization’s competitive set, but must stay visible on
organization’s radar.
Competitive intelligence: the practice of conducting primary research and analyzing
secondary research to understand the characteristics of competitors.
SCIP: Society of Competitive Intelligence Professionals
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