Professional Documents
Culture Documents
Featured Panelists Sam Bhandarkar Jamal Aaron Hageb Randy Javer Kushan Abayasekera
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Before we begin
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Overview
1. What type data gathering revenue managers use to anticipate hotel occupancy and market demand to determine acceptance or decline of business What does the hotels RSR (rooms to space ratio) mean How involved hotel revenue managers have become in the sales process and the importance of revenue management Will your RFP (request for proposal) get noticed by the hotel. How can a hotel determine what that "right price" should be? How to attract the right hotels to bid on your event program Key tips for working with your salesperson A word from our Sponsors
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What is GOPPAR?
GOPPAR: GOPPAR, or Gross Operating Profit Per Available Room, is defined as total gross
operating profit (GOP) per available room per day, where GOP is equal to total revenue less the total departmental and operating expenses.
consideration management control and efficiency. In addition, GOPPAR offers an overall more robust performance measure, especially when comparing the financial performances of hotels with different sizes or in different markets. Furthermore, GOPPAR has a significant correlation with a hotels bottom line and thus its underlying value.
How: The GOPPAR of a future group or meeting may be determined by calculating the
Guaranteed Group Revenue pro rated on a per Occupied Room basis (Group GOPPOR). Group GOPPOR is occasionally used by Revenue Managers and Hotel salespeople to choose between two or more overlapping groups or to establish the threshold rate for a future set of dates based on historical performance and market factors.
Market share and Year-Over-Year performance of a hotel. Total revenue per available room (Total RevPAR) is the product of (a) occupancy and (b) Total RevPOR. Rising RevPAR is an indication that either occupancy is improving, or room rates are rising -- or some combination of both. Of the two, rising room rates have a much more dramatic impact on the bottom line than corresponding increases in occupancy. It is not uncommon to see both figures rise together, though, as higher occupancy is usually concurrent with a stronger pricing environment. RevPAR evaluates the strength of only one type of revenue-generating stream, and it is important to note that many hotels derive a substantial portion of their total revenues from restaurants, spas, casinos, conferences, and other incremental revenue streams.
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Any Questions?
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What: A group that consumes significantly more meeting space than the number of
guestrooms occupied is commonly viewed as displacing more profitable group opportunities that may materialize at a later date. Meeting Planners seeking to book such space-intensive groups are often confronted with substantial Meeting Room Rental charges as Hotels seek to recover displaced Rooms Profit via increased Meeting Room Rental in order to strike a balance between the profit goals of the Hotel and the displacement of Occupancy.
How: Rooms vs. Space Ratios are calculated in relationship to the percentage of a Hotels
total Meeting Space occupied by a group vs. the percentage of the Group Rooms allocation of the Hotel occupied by the Group during the same dates.
Groups with extensive breakout or syndicate meeting needs, several days of advance setup for production or exhibitions, and relatively small room blocks are viewed as being less attractive to a Hotel than more profitable groups which utilize less meeting space in relationship to their guestroom usage and overall revenue profile.
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Sales Executives perform a preliminary evaluation of complex opportunities considering a hotel's sales strategy Sales Executives communicate the customer requirements and opportunity details to Revenue Management Revenue Management evaluates complex opportunities against the sales strategy and goals of the hotel and performs a displacement analysis that considers transient, group, and catering displacement Revenue Management communicates availability and pricing options back to Sales
Sometimes, especially for more complex opportunities, the process of evaluation can involve more back and forth dialogue between sales and revenue management as details of the event are uncovered and more availability and pricing options are uncovered.
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Ensure that the function space inventory blocked is the closest to customer requirements Ensure that the most accurate picture of remaining inventory is maintained through diary audits for accuracy and completeness The value of each function space by day and day part is identified and clearly communicated at all points of sale Restrictions for the minimum and maximum amount of space to be used for each day and day part is identified and clearly communicated at all points of sale Controls to balance between inventories are in place such as rooms to space ratios, and space release policies.
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Any Questions?
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Working with your sales manager on 4 major areas can ensure that Revenue Management augments the process and does not stall it:
Date Flexibility Space Flexibility Meeting Pattern Contracted Food & Beverage
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Consider alternate patterns or dates.. Always ask for the hole or a shift that might be valuable for the hotel to sell
Ask WHY your preferred dates didnt work? (rooms, space, rate?) This will help you with your planning and decisions at future meetings Book further out to get the dates or meeting space you want
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Any Questions?
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Hotel Revenue Management And now a Word from our Sponsors as we thank them for their support!
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Industry Ethics: Gifts, Trips, Parties and Give Aways! / Thursday, November 10th
Effective Business Writing / Wednesday, November 30, 2011 This PowerPoint can be downloaded at: http://PES.YourMeeting.com Click on the PCMA Capital Chapter logo
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Attrition Refers to a reduction, either voluntarily or involuntarily, or a groups contracted room block. Voluntary Attrition (or Attrition Allowance) is normally tied to an agreed percentage of reduction in a guestroom block contractually permitted by a specific date or series of dates prior to group operation. Voluntary Attrition is usually allowed by the Hotel with no financial penalties. Involuntary Attrition refers to attrition in excess of any agreed amounts due to a failure of the forecasted number of rooms to materialize, early departures, or failure to account for group guestrooms that may have been used at the Hotel but are not recorded as part of the group block. Involuntary Attrition usually means that a payment equal to the difference between the Minimum Guaranteed Room Block (net of Allowed Attrition) and the Actual Group Rooms Usage will be paid to the Hotel by the Group. Average Rate or Average Daily Rate (ADR) Average rate is a measure of the weighted average price or rate for a given perishable asset based on the number of units sold at the different price levels. An example in the hotel industry occurs when rooms with two queen-sized beds are sold at different prices (for example, rack rate, corporate discount, tour promoter package, group rate, etc.). In this case, average rate acts as a pricing efficiency measure.
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Occupancy Rate Occupancy Rate in the hotel industry is a measure of the observed occupancy percentage of a hotel property on any given night. Occupancy rate is often used as a measure of performance, especially when the managerial perspective is the Percentage Sold Approach. However, today most firms that utilize modern revenue management practices recognize that this is only a secondary measure compared to revenue yield, which maximizes revenue -- even when some rooms go unsold on a given night.
Opportunity Cost Opportunity Costs occur when a revenue manager sells a room in a hotel at a lower price level and subsequently experiences materialized demand for the same room at a higher rate. Opportunity costs occur either in a real or actual way, or in an expected sense: with stochastic demand, the revenue manager is never quite sure of the actual opportunity costs for a given room, because demand is uncertain to materialize. However, it is possible to compute expected opportunity costs on an ongoing basis from historical marketplace demand data, and then use that information to refine pricing policy and the time of rate closeouts.
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Randy has been with Marriott International for almost 15 years and lived in several cities throughout the country while working in different disciplines. Her career started in the Boston area while at the front desk and she remained in the Front Office in New York City and Chicago as well. In 2004 her Sales Career started when she moved to Denver and was in Marriott's Rocky Mountain Sales Office selling for 26 hotels within Colorado and New Mexico. After leaving Sales, Revenue Management seemed like a great career move (while staying in the great city of Denver!) and she transitioned to an Inventory Management role and eventually Group Strategy. Randy moved again with Marriott back to the East Coast in 2008 as the Director of Group Strategy for the Suburban Maryland Hotels. After a year and a half, Randy transitioned roles and is in her current role of Director of Group Strategy in the Washington DC Revenue Management Office for Marriott Hotels.
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Revenue Management for the Hospitality Industry by David K. Hayes and Allisha Miller
Convention Industry Council, Convention Industry Council Manual, 7th Edition Professional Convention Management Association, Professional Meeting Management, Comprehensive Strategies for Meetings, Conventions and Events, Fifth Edition
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