Tutorial introduction to revenue management for hotels hospitality seminar what is revenue management in hotel industry course-

Introduction to
Hotel Revenue
Management
Earn More
by Selling the Same
Presented by Tomeu Pons
7 May 2013 | Miami Beach, FL

2222Hotel Revenue Management Seminar – Miami Beach, FL - 7 May 2013 Presented by: Tomeu Pons tomeupons@gmail.com @tomeu_pons
Introduction to Revenue Management
Presentation
The main objective of this seminar is to understand the purpose
of revenue management in both technological and commercial
terms.
With this information, a hotel can evaluate, develop and optimize
its pricing strategy with the goal of maximizing profits.

Presentation
Professor: Tomeu PonsProfessor: Tomeu PonsProfessor: Tomeu PonsProfessor: Tomeu Pons tomeupons@gmail.comtomeupons@gmail.comtomeupons@gmail.comtomeupons@gmail.com
Collaborating ProfessorCollaborating ProfessorCollaborating ProfessorCollaborating Professor –––– Turisme Sant Ignasi TSI, FundaciTurisme Sant Ignasi TSI, FundaciTurisme Sant Ignasi TSI, FundaciTurisme Sant Ignasi TSI, Fundacióóóón ESADEn ESADEn ESADEn ESADE
Tourism Education ManagerTourism Education ManagerTourism Education ManagerTourism Education Manager –––– Cibernarium, Barcelona ActivaCibernarium, Barcelona ActivaCibernarium, Barcelona ActivaCibernarium, Barcelona Activa
Collaborating ProfessorCollaborating ProfessorCollaborating ProfessorCollaborating Professor –––– University of BarcelonaUniversity of BarcelonaUniversity of BarcelonaUniversity of Barcelona
Educated in Hospitality, Marketing, EEducated in Hospitality, Marketing, EEducated in Hospitality, Marketing, EEducated in Hospitality, Marketing, E----commerce and IT Systems incommerce and IT Systems incommerce and IT Systems incommerce and IT Systems in
Escola HotelerEscola HotelerEscola HotelerEscola Hoteleríííía UIB, ESADE, La Salle URL and UPCa UIB, ESADE, La Salle URL and UPCa UIB, ESADE, La Salle URL and UPCa UIB, ESADE, La Salle URL and UPC
Chief Operating OfficeChief Operating OfficeChief Operating OfficeChief Operating Office –––– Flamingo HotelierFlamingo HotelierFlamingo HotelierFlamingo Hotelier
Previously, Consultant ,Director of Marketing and CEO in companiPreviously, Consultant ,Director of Marketing and CEO in companiPreviously, Consultant ,Director of Marketing and CEO in companiPreviously, Consultant ,Director of Marketing and CEO in companieseseses
such as The Perfect Hotels, Sercotel, Hotusa and SAPsuch as The Perfect Hotels, Sercotel, Hotusa and SAPsuch as The Perfect Hotels, Sercotel, Hotusa and SAPsuch as The Perfect Hotels, Sercotel, Hotusa and SAP

Agenda
• Definition
• Price
• Effects on a hotel
• Distribution: direct and indirect
• When it is used
• Factors
• Tactics
• Calculating prices
• Reporting, statistics and tools
• Exercises
• Glossary
• Exam
• Notes

Definition
Revenue Management is a commercial management technique
that helps us to sell the right product at the right moment at the
right price to the right client.
Wikipedia: http://en.wikipedia.org/wiki/Revenue_management

Why use RM?
Revenue Management is a strategy we can use in response to:
• Increased competition
• Increase in channels of distribution
• Transparency in prices
• Increase in special promotions and discounts
• Decrease in expected response time to clients
• 80% of sales are influenced by online channels

Definition
Revenue Management is a method of managing sales of hotel
inventory by applying yield management techniques
Revenue Management:
Commercial management technique that helps us sell the right
product at the right moment at the right price to the right client
Yield:
The techniques, formulas and strategies hotels use to manage
inventory, price and sales policies to maximize revenue
generated from the sale of this inventory

Basic Elements of Revenue Management
Basic elements of Revenue Management used to manage inventory:
• Historical data – statistics, demand and trends
• Forecasts
• Price management tools
• Overall strategy
• Pricing policies
With the above, we can address:
• Fixed and perishable inventory
• Anticipated sales
• Customer segmentation

Improve RevPAR and GopPAR
RevPAR
GopPAR
RevPAR
GopPAR
Increase
your
Rooms
ADR
Increase
your
Rooms
ADR
Increase
occupancy
Increase
occupancy
Maximize
Revenue
and profit
Maximize
Revenue
and profit

Desired equilibrium in response to a changing market
Sell at
high prices
Sell at
low prices

The Customer
The customer is the most important factor in determining price.
Each client is different and has their own motivation:
• Different motives
• Different expectations
• Willing to pay different prices
• Interested in different products
To understand this environment we must ‘segment’ the market,
and for each of these segments we must adapt:
• Interested in different products
• Pricing
• Reservation terms
• Marketing along the path-to-purchase

The Product
The product is another of the key factors.
What is it about our product that drives sales?
• Hotel
• Destination
• Experience
• Rooms
• Services
Once we determine this, we can effectively develop our product:
Create additional room types?
Create a range of price points?

The Price
Although the price seems to be a lever we control, this is
completely false:
- Price is determined by demand
- Prices rise and prices fall
- High seasons and low seasons
- Years with low/no demand
- Channels with low/no demand
- Competition, local and international affects demand
However, there are techniques and factors that enable us to
increase prices.

The Moment of the Reservation
The moment of reservation is a key element in the management
of prices and quite often it isn’t take seriously enough
It’s an important moment for the customer just as much as it is
an important moment for the hotel. Both must work together in
the same way.
Many techniques exist for both players.
Forecasts based on historical data help us a great deal.

How it was born …

Where it was born, how and what need it met…

Where it was born, how and what need to it meet
These sales techniques were developed during the middle of the
20th century by American companies.
Once their information systems were computerized, they were
able to apply these methods effectively.
Companies could sell airplane tickets at different prices. They
realized that different clients, at different times, with different
motivations, were willing to pay different prices.
To be able to ‘predict’ how much clients were willing to pay for a
ticket, they developed ‘Yield’ techniques that allowed them to
fixed these prices. It was important for them to computerize and
collect information about supply and demand.

An example

Variability of industry pricing

Evolution of Tourism Pricing Management
History of Pricing
The total acceptance and integration of the Internet as a major
sales channel changed the way hotels price their inventory:
2003 – Some Majors changed to dynamic pricing
2004 – Fixed Consortia pricing disappeared
2005 – Decrease number of Categories and continued change to
dynamic pricing
2006 – Some corporate accounts are already dynamic
2007 – BAR is implemented completely

Definition
Pricing
Techniques to determine prices are developed in the heart of
each company. Setting prices can vary depending on the strategy
of the company.
The main factors in setting prices are:
• Production costs
• Market
• Competition
• Demand
• Product positioning

Pricing
Where do prices come from?
What are customers willing to pay?
$
$
$
$

Pricing
Techniques to set the prices of a good or a service…
Setting of prices can focus on anything from cost of production to
consumer demand.
From the point-of-view of marketing, an ‘efficient price’ is a price
that is close to the maximum price a consumer is willing to pay.
In economic terms, it is a price that transfers the most value
obtained by the consumer to the producer.

Pricing – Where do prices come from?
In the mind of the consumer, they are comparing different
options (substitute products), taking into consideration their
budget and the benefits of the purchase (e.g. pleasure).
This determines, in their minds, the right price they’d pay.
For a company to increase profitability from sales, they must
know in each moment what is the approximate maximum price a
customer is willing to pay for the product or service.
To increase the consumers’ perceived value of our products and
services, we must take in to account factors such as product,
price, distribution and promotions.

Pricing – An Efficient Price
The efficient price is the maximum consumers are willing to
pay. Prices are influenced by multiple factors…
But they are only perceived as ‘the right price for me or not’

Now that we understand that prices are factors affected by
multiple variables and are only perceived as
‘the right price for me or not’
We know we need to work with prices, adjust them and take
advantage of them so they are perceived as ‘the right price for me’
Now that we understand that prices are factors affected by
multiple variables and are only perceived as
‘the right price for me or not’
We know we need to work with prices, adjust them and take
advantage of them so they are perceived as ‘the right price for me’

$$ $$$ $$$$$ $$$$$$ $$$$$$$$$$$$$$$$$$$$
How prices were set and how prices are currently set
Without Yield – Prices based upon cost
With Yield – Prices based upon demand
Cost of Production
Cost of
Distribution
Desired
Profit
Cost of Production
Cost of
Distribution
Desired
Profit
YIELD
Pr
$$ $$$ $$$$$ $$$$$

Real impact on hotels
A hotel has 200 rooms…
If they apply RM for each of their rooms and each room
achieves an increase of €2, the impact on final results is
significant.
200 rooms x 2$ = 400$/day x 365 days = 146.000$
200 rooms x 3$ = 600$/day x 365 days = 219.000$
200 rooms x 5$ = 1000$/day x 365 days = 365.000$

1 Hotel x 100 rooms x 365 days =
36,500 rooms x 1/3 = 12,166 rooms
12,166 x 3 $$$$ = 36,498 $$$$
12,166 x 6 $$$$ = 72,996 $$$$
12,166 x 9 $$$$ = 109,494 $$$$
TOTAL ANNUAL INCREASE = 218,988 $$$$

Nº of Rooms
Price
Pricing Mix

How clients agree to prices…

32323232Hotel Revenue Management Seminar – Miami Beach, FL 7 May 2013 Presented by: Tomeu Pons tomeupons@gmail.com
Consumer Behavior

Fixed Pricing (static)

Booking Engine

Dynamic Pricing – Actions

Distribution – Direct or Indirect

Maintaining Indirect Distribution

38383838Hotel Revenue Management Seminar – Miami Beach, FL 7 May 2013 Presented by: Tomeu Pons tomeupons@gmail.com
Billboard Effect

Implementation

Definitions
Revenue Manager:Revenue Manager:Revenue Manager:Revenue Manager:
Revenue Management:Revenue Management:Revenue Management:Revenue Management:
Yield Management:Yield Management:Yield Management:Yield Management:

Corporate Policy

When is it appropriate to apply ‘Yield’
To implement RM we need:
• Fixed production of stock/products
• Perishable product
• Clear policy on dynamic pricing
• Ability to update prices quickly
• Reservations/sales occur within a time period
• Ability to segment the market or groups of customers
To manage RM actions, the involvment of Management, Sales and Reservations
is required. Their must be a unified vision and mission, and agreed objectives.
It’s necessary to collect information about demand: price paid, reservation dates,
dates of consumption, quantity of demand, events in the destination or origen
location, competitors’ prices, distributors…

Main techniques
The main RM tools:
• Availability management
• Categories
• Groups
• Auto-Allotment
• CTA, Close-to-Arrival
• MinLOS & MaxLOS
• Upselling
• Overbooking

How we set prices
The key point is to have the ‘right price’.
To determine the right price we take in to account:
• Value of our product
• Customers’ perceived value
• Positioning
• Competition

Management of Availability
The correct management of availability is one of the most
important points of good RM
Factors that affect availability include:
• Rates
• Reservations not guaranteed
• Pre-payments
• Categories
• Groups
• Overbooking
• Waiting lists
• Peaks and valleys in planning

Types of Rates
All hotels offer a variety of rate types. The trend is to simplify
them into ‘rate periods’ and apply to BAR ‘discount periods’.
With the current system we lose competitivity and have to work
more hours to organize our work.
Rate types:
• Published rates on hotel website, Booking…
• Negotiated ECI, companies, groups…
• Packaged, Expedia…
• Opaque Atrapalo, Lastminute
• Restricted cancellations, advanced payment, promotions

Price Matrix
StandardStandard
SuperiorSuperior
RACKRACK PREFPREF BAR1BAR1 BAR2BAR2 BAR3BAR3 BAR4BAR4 BAR5BAR5 BAR6BAR6 WKD1WKD1 WKD2WKD2
200200 160160 140140 120120 110110 100100 9090 8080 7070 6060
215215 175175 155155 135135 125125 115115 105105 9595 8585 7575
SuiteSuite 230230 190190 170170 150150 140140 130130 120120 110110 100100 9090
Creation of numerous published rates that pass from one to the
other in function of the level of occupation and expected demand,
and we make if from the level of rates that we consider most
opportune.
¿What is the BAR Best Available Rate?

Price Matrix x Occupation
Demand Profile Nov - Mar Apr - Jun Jul - Oct
Occupation Rate
BAR
Rate Base
High Demand
Moderate Demand
Low Demand
Very Low Demand
>75%
215
205
180
65%
190
175
165
55%
190
170
150
<50%
140
110
75
Occupation Rate
>85%
230
215
195
75%
215
205
180
65%
190
175
165
>55%
150
130
115
Occupation Rate
>95%
250
235
215
75%
235
225
200
65%
210
195
185
>55%
170
150
135
BAR
Base Rate
BAR
Base Rate

Total Demand, Unconstrained Demand
The total demand of a room for a specified day. This figure is
independent of the physical capacity of the hotel.
For the total registered demand for a product, it’s useful to have
a system that permits ‘on-request’, including when all rooms are
already sold.
This demand will allow us to calculate the “Last Room Value”, or
how much somebody is willing to pay for the last room in our
inventory.

Segmentation of the Market/Consumers
Market segmentation is the study of consumers and what their
different motives may be for choosing our hotel.
This allows us to to create different segments or groups of
consumers according to their motives for the visit.
To know these motives we must be able to analyze ways to
increase the demand in each of these segments.
We also must know the segments of our competitors and the
destination in general to make comparisons.

In order to investigate the segmentation of the market and
consumers, we must collect data:
• Duration of stay
• Motive for the stay – source and recipient
• Motive to choose hotel
• How long in advance did they book hotel
• Revenue per room
• Revenue per client
• Distribution channel where booking was made

Price Elasticity
Price elasticity measures the effect changes in price have on
demand. Sometimes an increase in price causes a significant
decrease in the demand and in other instances only a slight
decrease.
Elastic Demand
• High competition
• Standard services
Inelastic Demand
• Low competition
• Differentiated services

Example:

Demand Forecasting
Investigation based on a calendar that allows us to know the
demand that our product will have in the future.
The objective is to forecast the periods of low demand and
stimulate sales, as well as to know the periods of high demand in
which we can increase rates.
Use Google Calendar to collect all of the events that can
influence consumption. This tool is easy to use and available to
all of the team.

Forecasting consists of the estimation and analysis of future
demand for a specific product or service using inputs such as
historic sales, marketing estimates and promotional information.
Price Waterhouse Coopers
Demand Forecasting

To be able to forecast, it’s necessary to know historic consumption
data, referring to:
• Consumption weekdays
• Consumption during events: conferences, festivals…
• Consumption during vacations
• Clients – Business or Leisure
• Changes in demand
It can be easy to make a forecast. If you can, also make a
forecast about your competitors and about the destination.
This document will allow you to know the number of arrivals and
departures, occupation by room and possibly revenue from other
non-room sources.
It’s a great tool to define internal objectives.
Demand Forecasting

Why do we make forecasts?
• Measure demand
• Forsee falls in demand
• React to low demand
• Define commercial strategy
• Apply rates
• Restrict sales
• Control costs
• Control commissions
• Financial planning
• Human Resources planning
Objective of Forecasting

Forecasting: Behavior Patterns of Reservations
Booking Pace
The booking pace must be monitized for the current day and
future days to ensure alignment with the forecast and to be able
to react to any deviations from the forecast that occur.
DailyPick-up
The daily pick-up, and the ability to follow the rhythym of
reservations must distinguish individuals and groups.

Pick-Up
The pick-up is the figure that tells us today how many confirmed
reservations we have for a specific day.
This figure shows us in a detailed way, by day or room type, the
% already sold.
This figure allows us to guide our decisions to increase or
maintain rates for a specific day and what we must already apply
today.
The ideal is to be able to analyze and act daily, in all distribution
channels, with this information.

Pick-Up
Difference in the number of reservations between one date and another.
Example: Reservations made yesterday for the month of June.

Forecasting Elements
To record:
• Objectives reached vs. objectives set
• Reservations on the books
• Pick-up realized vs. expected pick-up
• Expected segments
• Average rate
• Total revenue
We should forecast:
• Once per week for the next 4 weeks
• Once per month for the next 3 months
• Once per month every 3 months for the whole year
• Once per year for the next year

Demand Curve vs. Advanced Reservation
Individuals
Companies
FIT
Groups
-60 -30 -15 -5 Days before arrival

Demand Curve

Groups
We should take note of all Group requests in our statistics, so we
can evaluate profitability and apply RM to group pricing.
• Provider
• Type of contract
• Revenue per room
• Revenue per guest
• Revenue per group
• Group sub-segments
• Purpose of the visit
• number of and motive for cancellations

Demand Curve

Tour Operators
Tour operator contracts are the most difficult to apply RM to
since the system of prices and sales is already fairly static.
Technically, it is a segment ‘not yieldable’.
Hotels should insist the tour operators agree to dynamic
prices, but these companies and their ‘packages’ business
model make it very difficult commercially to use dynamic
pricing methods.
From the analysis of these contracts we can reason that there
are months hotels benefit from them and months where sales
opportunities are lost due to them.

Shoulder Days
What is the impact of closing sales for a specific day?
The impact of closing sales of a room type for specified dates
could be larger than what we believe.
The “Shoulder days” are the days of ‘closed stays’ that imply
a reservation. In other words, the 2 or 3 days the client would
have stayed in the hotel.
This statistic helps us to calculate the impact on revenue
when a room type isn’t available.
Some segments like groups and tour operators can produce a
large number of ‘shoulder days’.

What actions should we take?

Tactics – How to act during high demand
High Demand
• Close or restrict discounts
• Apply a minimum of nights, but with caution
• Reduce groups and ‘shoulder days’
• Reduce ‘late check out’, and in moderation, if possible, ‘late check in’
• Increase guarantees and cancellation charges
• Increase rates in accordance with those the competition
• Increase the cost of packages and hotel services
• Apply the full cost of suits and executive rooms
• Select dates that are ‘closed to arrivals’
• Evaluate the total profit of the hotel and try to increase it
• Invoice for all of the nights in case the client shortens their stay

Tactics – How to act during low demand
Low demand:
• Sell added value and special benefits
• Offer packages including internal and external products
• Don’t close sales of the cheapest category of rooms
• Incentivize upgrades
• Offer better prices at adjusted budgets
• Don’t use ‘stay restrictions’
• Motivate hotel staff to be especially attentive
• Monitor competitors’ actions
• Lower prices

Consistency
Consistency in applying prices…
It’s very important to be consistent with our product, services
and the value we offer.
We must align our value, price and quality, in order to not
disappoint our customers.

Tactics – Four Revenue Management
Principal points to remember:
•
•
•
•
•
•
•
•
•
•
•
•

Questions
When should we reject a sale?
Is it useful to know how much customers spend?
When should we offer a discount?
When should we use overbooking?

How do we measure our Factor Yield / RM
Revenue per Available Room
RevPAR
Room Revenue
o
Average Rate x Occupation
Number of Rooms Available

How do we measure our Factor Yield / RM
Gross Operating Profit – GOP
Rooms Available
Total Revenue
Rooms Available
TRevPAr Total Revenue per Available Room
GOPPar
Gross Operational Profit per Available Room

Elements of Analysis
We have three levels of analysis: daily, monthly and yearly
Daily:
• Average occupation
• Average rate
• Rev PAR
• Pick-Up
Monthly:
• Geographic origin, GOB
• Length-of-stay, LOS
• Lead Time
• Channel
• Commissions
Always:
• Profitability of each type of guest

Benchmarking
Benchmarketing is the study of the competition to discover how
they sell, at what price and what their occupancy is. The objective
is to discover how we can improve and act upon this with
distributors, guests…To be able to improve our commercialization.
At a minimum, benchmarking should give us information on:
• Prices
• Room type
• Products
• Packages
• Channels of distribution
• Occupation
• Services offered

Benchmarking
My Hotel vs. My Competitors
Who manages their hotel better, Manager A or Manager B?

Daily Prices
To manage our prices taking into account the prices our
competition is selling at, is one of the best tools to help us sell
smarter. From them we can make a number of conclusions.
There are a number of ways to obtain this information.
The questions we seek to answer include:
• What is their strategy?
• Do they use ‘yield’?
• What occupation do they have?
• Can it affect our sales?
• What would be their future prices?
• Do they require minimum stay (L.O.S.)?

Place your hotel: market vs. your value
All of the commercial policies and prices of your establishment
must be consistent with your product and values.
Aligning price, services and product will ensure you have an
excellent perceived value for money and that demand is more
loyal and sustained.
Monitor your competitors in terms of their products and
associated ‘perceived value’. After, compare your hotel to theirs
and adjust your offering to be more competitive and more
productive.

Place your hotel: market vs. your value
Evaluate your hotel and your competitors:
• Product – room type
• Product – hotel services
• Price
• Channels of distribution
• Location
• Strengths and weaknesses
• Client segments of the hotel
• Their presence in other markets
• What hotels have similar prices
You can also study the market for your destination, as well as
source markets.

Place your hotel: market vs. your value - SWOT
My Hotel
My Environment
Strengths Weaknesses
Threats Opportunities

Market Share Report
This study helps us to understand our results compared to our
competitors, especially in regards to the average price and
occupation.
The parameters are:
MPI. Market Penetration Index
market penetration rate vs. the average occupation of our
competitors
ARI. Average Rate Index
average price index, our average price vs. our competitors
RGI. Revenue Generator Index
revenue generator index, our share of revenue vs. our
competitors

Distributors
Our presence with distributors is key. We can consult them at
any time for competitive data and we can observe the positions
they occupy in search engine results.
We can observe how they sell… use of photography, text,
reference to locations, positioning of product.
Very good presence with distributors can help our product
compete with superior hotels (in this case we’d be competitive
on price) and with similar hotels (in this case we’d be the
better option).

How to be present. Distributors and the exponential effect.
Is it really the same hotel? Where will customers book it?
The hotel’s website is not the best option to book it in this case.

Many published rates and many products
An establishment should have however many rates they believe
to be opportune. All rates should be competitive depending upon
the moment they are applied.
Attention to the offers and closed prices and/or flat-rates offered
to companies and agencies.
If the latter act with a discount code, we must always reference
these exceptions and offers.
All products should always be offered and done so with the
largest number of distributors possible.

Pricing Matrix
StandardStandard
SuperiorSuperior
200200 160160 140140 120120 110110 100100 9090 8080 7070 6060
215215 175175 155155 135135 125125 115115 105105 9595 8585 7575
SuiteSuite 230230 190190 170170 150150 140140 130130 120120 110110 100100 9090

Optimize your supplementary products
Clients for the most part consume on impulse. A direct call to
make a reservation sometimes lasts only a few minutes, as can
the online process, so we must always present ourselves in the
most ‘desirable’ fashion.
Different room types meet different needs of different segments.
Why don’t we offer them all?
In the descriptions suggested ‘use/benefits’ are given. Create
clear differences between the room categories. Stimulate the
thought… ‘a little more per night you can enjoy…’

Upselling
Upselling is another tool that helps us to achieve good results
from RM.
Two moments when it can be applied:
• Moment reservation is made
• Arrival at hotel
Offer what the client ‘needs’ in a direct way for a little more
money.
We must:
• Understand the client
• Observe their needs
• Propose options
• Communicate the benefits

Price Parity
Although price parity is a model criticized by some, others
defend it.
In spite of not being logically sound financially, it’s use has
spread and has been accepted by all OTA’s.
Internally, the differences between the reprecussion of the
commissions that are considered as costs of promotion or
sales; are compensated some OTA’s with others.
In the case of not having parity, clients will buy in mass, the
cheapest OTA’s. Although this would be more effective,
having one OTA’s dominating almost all sales would be
dangerous.

Commercial Parity
Commercial parity is based on the commercial parameters that
can influence the client’s purchase
It’s important to have commercial parity with our distributors
because they otherwise could have advantages over our own
channel.
• Payment conditions
• Reservation conditions
• Cancellation charges
• Advance notice of cancellation required
• Cleaning charges
• Hidden offers
• …

Control Price Parity
Controlling price parity is very important and affects our
relationship with our clients and distributors.
Technological tools exist to compare prices for our own hotel:
• know who we work with
• know who are our distributors
• know the mark-up on our product
• understand the distributor’s model: retail, merchant, opaque...

Parity Disruptors
Some companies willingly perform actions to cause “Parity
Disruption”.
Break the parity of your hotel to get benefits from it, decreasing
your margin so clients choose your property.
In other instances, data is aggregated from different channels to
show which has the lower prices.
Normally, these companies don’t have direct contracts with the
hotel and use price comparison to attract clients.
If it’s necessary, make reservations in each channel to get the
voucher and know which agency is selling your property in this
way.

Overbooking
Overbooking isn’t an effect or a consequence.
In RM, it is a tool that allows us to get the most ‘play’ out of our
hotel’s availability.
On many occasions, the no-shows, last minute cancellations and
shortened stays, affect our profitability.
It’s recommended to have an action plan for these occasions.
We need to think about how these deviations will impact:
costs of stay, costs of transportation, compensation for services
or monetary, and possibly sanctions.

Overbooking
Calculate your level of Overbooking and evaluate risk vs. Profit
Reservations Received > > Arrivals
Not Guaranteed
Cancellations
No Shows
Rates we charge
Transfer Expenses

Parameters to measure efficacy
REVPAR:REVPAR:REVPAR:REVPAR: RoomRoomRoomRoom Revenue perRevenue perRevenue perRevenue per AvailableAvailableAvailableAvailable RoomRoomRoomRoom
TREVPAR: Total Revenue perTREVPAR: Total Revenue perTREVPAR: Total Revenue perTREVPAR: Total Revenue per AvailableAvailableAvailableAvailable RoomRoomRoomRoom
TREVPEC: Total Revenue perTREVPEC: Total Revenue perTREVPEC: Total Revenue perTREVPEC: Total Revenue per ClientClientClientClient
GOPPAR:GOPPAR:GOPPAR:GOPPAR: GrossGrossGrossGross OperatingOperatingOperatingOperating ProfitProfitProfitProfit perperperper AvailableAvailableAvailableAvailable RoomsRoomsRoomsRooms
REVPAM:REVPAM:REVPAM:REVPAM: ConferenceConferenceConferenceConference////BanquetingBanquetingBanquetingBanqueting Revenue perRevenue perRevenue perRevenue per AvailableAvailableAvailableAvailable M2M2M2M2
REVPASH: F&B Revenue perREVPASH: F&B Revenue perREVPASH: F&B Revenue perREVPASH: F&B Revenue per AvailableAvailableAvailableAvailable seatsseatsseatsseats andandandand hourhourhourhour

When we obtain more by applying RM

Where to obtain more by applying RM

How much you’ve obtained by applying RM

Practice: How to determine our prices

Pricing Matrix
StandardStandard
SuperiorSuperior
200200 160160 140140 120120 110110 100100 9090 8080 7070 6060
215215 175175 155155 135135 125125 115115 105105 9595 8585 7575
SuiteSuite 230230 190190 170170 150150 140140 130130 120120 110110 100100 9090
Pricing Matrix – General

Pricing Matrix
StandardStandard
SuperiorSuperior
200200 160160 140140 120120 110110 100100 9090 8080 7070 6060
215215 175175 155155 135135 125125 115115 105105 9595 8585 7575
SuiteSuite 230230 190190 170170 150150 140140 130130 120120 110110 100100 9090
25%50%75%100% 33%66%99%
Pricing Matrix – Very Low Season

Pricing Matrix
StandardStandard
SuperiorSuperior
200200 160160 140140 120120 110110 100100 9090 8080 7070 6060
215215 175175 155155 135135 125125 115115 105105 9595 8585 7575
SuiteSuite 230230 190190 170170 150150 140140 130130 120120 110110 100100 9090
25%50%75%100%
Pricing Matrix – Low Season

Pricing Matrix
StandardStandard
SuperiorSuperior
200200 160160 140140 120120 110110 100100 9090 8080 7070 6060
215215 175175 155155 135135 125125 115115 105105 9595 8585 7575
SuiteSuite 230230 190190 170170 150150 140140 130130 120120 110110 100100 9090
33%66%99%
Pricing Matrix – Mid-Season

Pricing Matrix
StandardStandard
SuperiorSuperior
200200 160160 140140 120120 110110 100100 9090 8080 7070 6060
215215 175175 155155 135135 125125 115115 105105 9595 8585 7575
SuiteSuite 230230 190190 170170 150150 140140 130130 120120 110110 100100 9090
25%50%75%100%
Pricing Matrix – Mid-to-High Season

Pricing Matrix
StandardStandard
SuperiorSuperior
200200 160160 140140 120120 110110 100100 9090 8080 7070 6060
215215 175175 155155 135135 125125 115115 105105 9595 8585 7575
SuiteSuite 230230 190190 170170 150150 140140 130130 120120 110110 100100 9090
25%50%75%100%
Pricing Matrix – High Season

Dynamic Pricing
Advantages of Dynamic pricing:
• Eliminate discounts in periods of high demand
• Reduce availability of rooms for groups
• Increase discounts in periods of low demand
• Establish ‘Special Events’ rates or for periods of
extraordinary high demand

Revenue Algorhythm
Revenue from ‘automatic application’ functions with an
algorhythm of revenue included in the PMS or CRS.
Calculation based on: room type, bands of prices allowed, %
occupation or level of actual sales.
Must exclude some reservations from the system so they are not
figured into the the base calculation of revenue. By human or
automatic calculation.
System can become more sophisticated with algorhythms or
artificial intelligence by combining: historic data, competitive
data, booking window, pick-up, customer searchs in the
reservation booking engine calendar.
Some companies use cookies and add web tracking data as well.

Revenue Algorhythm Example
• 1 hotel with 500 rooms
• 5 room types
• 150 rooms are doubles
• Sales from 1 May 2020: 22% = 33 rooms
• Price range: 116$ - 148$
• Difference: 32$
• Mid-High Season. Rate change every 20% change in occupation.
• Rate change in increases of 6.40$
Prices on display:
1. 0% 116.0 $
2. 20% 122.4 $
3. 40% 128.8 $
4. 60% 135.2 $
5. 80% 141.6 $
al 100% 148.0 $
Prices on display:
1. 0% 116.0 $
2. 20% 122.4 $
3. 40% 128.8 $
4. 60% 135.2 $
5. 80% 141.6 $
al 100% 148.0 $

Revenue Algorhythm Example
We can create an algorhythm for our PMS or CRS, or implement
new, easy-to-use RM tools.
Numerical Algorithms Group - Industries

Day-to-Day Tools

Remember: Basic Elements of RM
Basic elements of RM are:
• Historic information – statistics, demand and trends
• Forecasting
• System tools to manage prices
• Overall strategy
• RM pricing policy
With them, we act upon:
• Fixed and perishable inventory
• Anticipated sales
• Opportunity to segment customers

Strategy and Rates
With a simplified rate structure, we increase the ability to sell and
provide clarity to customers to make their purchase decision easier.
RATE STRUCTURE
• Double Room 200,50 $
• Superior Room 350,50 $
• Executive Room 510,50 $
• Junior Suite 620,50 $
• Suite 862,50 $
COMPLEMENTARY
PRODUCTS & SERVICES
• Airport Transfer 60 $
• Breakfast Buffet 18 $
• Flowers 23 $

Benchmarking & Compset
Competitive analysis shouldn’t be the only factor used to develop your
strategy, but it is a key component.
We can share our results anonymously in order to compare our results
with those competitors’ hotels who also share their data anonymously.
This study helps us understand our results in comparison with our
compset.

Historic Data
Different reports that will help us analyze ‘the past’ by
segments, monthly day-to-day, competition, etc.…
DATE LCR LGS
IND.
CORP
GRP.
CORP
IND. LEIS GRP. LEIS OTH Total LCR LGS
IND.
CORP
GRP.
CORP
IND. LEIS GRP. LEIS OTH Total LCR LGS
IND.
CORP
GRP.
CORP
IND. LEIS LEIS. GRP OTH Total LCR LGS
IND.
CORP
GRP.
CORP
IND. LEIS LEIS. GRP OTH Total
01-nov WED 28 32 12 1 59 0 2 134 93 48 69 15 61 0 0 286 73 38 65 13 39 0 0 228 20 10 4 2 22 0 0 58
02-nov THU 31 32 20 1 84 0 1 169 78 47 49 17 57 0 0 248 50 37 45 15 32 0 0 179 28 10 4 2 25 0 0 69
03-nov FRI 51 32 34 1 114 0 4 236 67 48 30 20 38 0 1 204 41 38 34 16 28 0 1 158 26 10 -4 4 10 0 0 46
04-nov SAT 86 32 68 2 118 0 3 309 83 46 40 25 25 0 0 219 58 37 37 22 15 0 0 169 25 9 3 3 10 0 0 50
05-nov SUN 81 33 33 4 122 0 1 274 103 46 37 33 22 0 0 241 73 37 31 24 14 0 0 179 30 9 6 9 8 0 0 62
06-nov MON 84 34 29 13 107 0 1 268 117 45 51 49 28 0 0 290 86 36 35 43 18 0 0 218 31 9 16 6 10 0 0 72
07-nov TUE 101 35 34 28 95 0 1 294 107 45 51 49 26 0 0 278 79 36 35 32 17 0 0 199 28 9 16 17 9 0 0 79
08-nov WED 106 35 35 33 92 0 1 302 95 45 41 38 31 0 0 250 60 36 32 9 19 0 0 156 35 9 9 29 12 0 0 94
09-nov THU 108 35 39 43 94 0 1 320 66 45 31 27 36 15 0 220 38 36 22 2 20 15 0 133 28 9 9 25 16 0 0 87
10-nov FRI 85 34 43 58 87 0 2 309 40 44 36 21 50 15 0 206 23 35 23 4 34 15 0 134 17 9 13 17 16 0 0 72
11-nov SAT 70 34 24 125 62 0 1 316 51 43 29 46 40 0 0 209 36 34 19 43 29 0 0 161 15 9 10 3 11 0 0 48
12-nov SUN 71 35 28 125 54 0 1 314 64 42 27 49 31 0 0 213 49 33 14 43 24 0 0 163 15 9 13 6 7 0 0 50
13-nov MON 67 35 41 72 64 0 1 280 76 42 30 52 27 0 0 227 59 33 15 43 20 0 0 170 17 9 15 9 7 0 0 57
14-nov TUE 62 37 51 77 68 0 1 296 76 41 34 57 24 0 0 232 56 32 18 52 16 0 0 174 20 9 16 5 8 0 0 58
15-nov WED 55 36 54 81 88 0 1 315 65 38 42 16 24 0 0 185 41 30 28 11 16 0 0 126 24 8 14 5 8 0 0 59
16-nov THU 40 36 57 60 103 0 1 297 58 37 40 17 24 0 0 176 42 29 32 12 14 0 0 129 16 8 8 5 10 0 0 47
17-nov FRI 44 37 80 39 87 0 1 288 59 37 52 41 67 0 0 256 50 29 44 36 59 0 0 218 9 8 8 5 8 0 0 38
18-nov SAT 44 37 89 23 91 0 1 285 49 36 53 75 85 0 0 298 42 28 45 76 71 0 0 262 7 8 8 -1 14 0 0 36
19-nov SUN 50 36 104 19 75 0 1 285 59 38 58 75 95 0 0 325 56 28 49 76 82 0 0 291 3 10 9 -1 13 0 0 34
20-nov MON 54 35 100 20 74 10 1 294 65 37 61 73 98 0 0 334 60 27 49 74 86 0 0 296 5 10 12 -1 12 0 0 38
21-nov TUE 53 35 99 20 68 10 1 286 64 38 55 70 81 0 0 308 63 28 44 72 71 0 0 278 1 10 11 -2 10 0 0 30
22-nov WED 60 35 94 17 65 10 1 282 26 38 41 7 56 0 0 168 22 28 33 7 49 0 0 139 4 10 8 0 7 0 0 29
23-nov THU 52 36 76 14 58 0 1 237 32 38 18 2 30 0 0 120 33 28 11 2 23 0 0 97 -1 10 7 0 7 0 0 23
24-nov FRI 42 37 56 14 48 0 1 198 22 38 9 2 21 0 0 92 19 28 5 2 15 0 0 69 3 10 4 0 6 0 0 23
25-nov SAT 31 36 29 73 48 0 1 218 31 38 13 0 25 0 0 107 21 28 5 40 20 0 0 114 10 10 8 -40 5 0 0 -7
26-nov SUN 48 36 29 60 65 0 1 239 43 36 31 1 23 0 0 134 32 27 14 41 20 0 0 134 11 9 17 -40 3 0 0 0
27-nov MON 53 36 33 43 82 0 1 248 51 36 36 1 25 0 0 149 40 27 19 90 22 0 0 198 11 9 17 -89 3 0 0 -49
28-nov TUE 58 37 33 30 90 0 1 249 38 36 24 1 19 0 0 118 31 27 13 50 15 0 0 136 7 9 11 -49 4 0 0 -18
29-nov WED 48 37 45 20 110 0 2 262 28 36 27 1 17 0 0 109 28 27 15 1 12 0 0 83 0 9 12 0 5 0 0 26
30-nov THU 49 34 61 10 123 0 2 279 30 34 24 0 11 0 0 99 30 25 16 0 5 0 0 76 0 9 8 0 6 0 0 23
1812 1051 1530 1126 2495 30 39 8083 1836 1218 1139 880 1197 30 1 6301 1391 942 847 951 905 30 1 5067 445 276 292 -71 292 0 0 1234
Occupancy 22,42% 13,00% 18,93% 13,93% 30,87% 0,37% 0,48% 83,94% 29,14% 19,33% 18,08% 13,97% 19,00% 0,48% 0,02% 65,43% 27,45% 18,59% 16,72% 18,77% 17,86% 0,59% 0,02% 52,62% 12,81%
8.633.064 6.401.220 5.031.018 1.370.202
1.068,05 1.015,91 992,90 23,01
896,48 664,72 522,43 142,28
Total
Room Revenue
ARR
RevPAR
Last Year Totals On the Books Pick UpOn the Books last week
286
248
204 219 241
290 278 250 220 206 209 213 227 232
185 176
256
298 325 334 308
168
120 92 107 134 149
118 109 99
0
100
200
300
400
01-nov 02-nov 03-nov 04-nov 05-nov 06-nov 07-nov 08-nov 09-nov 10-nov 11-nov 12-nov 13-nov 14-nov 15-nov 16-nov 17-nov 18-nov 19-nov 20-nov 21-nov 22-nov 23-nov 24-nov 25-nov 26-nov 27-nov 28-nov 29-nov 30-nov

Historic Data
Exchange of competitive data

Historic Data
Detailed market segmentation analysis and origins:
Segmentos

Historic Data
Effectively analyze and manage ‘booking trend’
ene-05 ene-06 feb-05 feb-06 mar-05 mar-06 abr-05 abr-06 may-05 may-06 jun-05 jun-06 jul-05 jul-06 ago-05 ago-06 sep-05 sep-06 oct-05 oct-06 nov-05 nov-06 dic-05 dic-06
Occ. 90 days out 25,35% 22,48% 31,39% 15,94% 28,03% 14,36% 14,42% 5,63% 20,66% 8,00% 19,49% 3,54% 15,11% 2,46% 5,65% 8,97% 12,73% 7,93% 7,19% 10,62% 16,55% 14,94% 12,27% 8,98%
Occ. 60 days out 35,05% 31,31% 46,58% 22,30% 10,52% 20,25% 24,62% 11,00% 34,62% 10,52% 22,77% 6,03% 9,02% 12,27% 8,57% 10,71% 20,76% 12,07% 8,58% 12,87% 29,06% 25,23% 18,82% 22,95%
Occ. 30 days out 74,45% 49,49% 79,24% 59,40% 59,52% 35,81% 57,63% 32,61% 50,27% 31,44% 36,13% 34,02% 26,76% 27,96% 26,90% 28,22% 42,62% 34,64% 21,20% 29,89% 62,52% 64,43% 42,15%
Pick up 1st Week 6,21% 1,72% 3,50% 8,86% 11,29% 12,88% 7,40% 14,43% 5,72% 12,06% 6,53% 7,92% 10,25% 9,41% 9,05% 13,94% 9,21% 15,02% 6,68% 8,73% 8,89% 11,98%
Pick up 2nd Week 3,20% 4,14% 8,74% 8,73% 10,05% 15,85% 11,03% 12,15% 12,24% 7,83% 12,23% 9,58% 13,29% 8,16% 12,31% 12,72% 10,23% 15,12% 6,64% 9,12% 6,31% 9,23%
Pick Up 3rd Week 2,31% 6,48% 11,59% 7,33% 5,70% 11,59% 7,10% 10,56% 6,47% 3,70% 7,81% 6,47% 6,48% 5,43% 9,56% 9,23% 7,29% 4,05% 5,04% 8,60% 2,04% 6,46%
Pick Up Final Week 2,79% 4,67% 8,51% 2,46% 3,70% 8,51% 2,04% 5,08% 6,67% 6,40% 6,49% 5,71% 6,12% 7,06% 8,65% 10,69% 7,60% 3,59% 2,79% 2,28% 4,74% 1,97%
Final Occupancy 88,97% 66,50% 81,72% 86,78% 90,25% 81,72% 85,20% 74,83% 81,37% 61,43% 69,19% 63,72% 62,90% 58,01% 66,48% 74,80% 76,95% 72,42% 42,37% 58,62% 84,50% 71,78%
Pick Up Analysis 2005 vs 2006 (Total)
Occupancy Pace Report - 90 Days Out
0,00%
10,00%
20,00%
30,00%
40,00%
1 2 3 4 5 6 7 8 9 10 11 12
2006 2005
0,00%
10,00%
20,00%
30,00%
40,00%
50,00%
1 2 3 4 5 6 7 8 9 10 11 12
2006 2005
0,00%
20,00%
40,00%
60,00%
80,00%
100,00%
1 2 3 4 5 6 7 8 9 10 11 12
2006 2005
Occupancy Pace Report - EOM Figures
0,00%
20,00%
40,00%
60,00%
80,00%
100,00%
1 2 3 4 5 6 7 8 9 10 11 12
2006 2005

Historic Data
Mon Tue Wed Thu Fri Sat Sun
64,88% 71,11% 77,88%
59,03%53,77%
62,18%
72,90%
Daily Room Occupancy- Total
54
67 77 71
60 53 47
Rooms Occupied - Ind. Corp
41 41
40 40
41
40
42
Rooms Occupied - Ind. Leis
38 38 40 41 46
32 32
Rooms Occupied - Grp. Corp
40 40 44 44
20 24 21
Rooms Occupied - Grp. Leis
43 43 45
38
46
32
44
Rooms Occupied - Industry
Detailed study, day-to-day, for each season, taking into account
the impact of events, festivals and vacation periods on the city
and hotel.

Historic Data
Know our ‘top producers’ with precision

Forecasting
How to develop a good forecasting procedure?
Rigorously control daily, weekly and monthly pick-up data
BUSINESS-ON-THE-BOOKS
DATE BAR Guideline IND LEISURE
GRP
LEISURE
IND CORP. GRP CORP. OTHER RMS % ADR REV
1.601 24,71% 7.239 11.590.426
01-oct jue BAR 1 60 0 0 0 4 64 30,62% 6.993 447.571
02-oct vie RACK 70 0 0 0 2 72 34,45% 8.881 639.454
03-oct sáb RACK 68 0 0 0 3 71 33,97% 8.832 627.091
WEEK 1 198 0 0 0 9 207 33,01% 8.281 1.714.117
04-oct dom BAR 1 51 0 0 0 7 58 27,75% 7.071 410.091
05-oct lun BAR 1 26 0 0 0 12 38 18,18% 8.093 307.545
06-oct mar BAR 1 33 0 1 0 16 50 23,92% 5.567 278.364
07-oct mié BAR 1 41 0 0 0 13 54 25,84% 5.889 318.000
08-oct jue BAR 1 41 0 0 0 10 51 24,40% 5.376 274.182
09-oct vie RACK 68 0 0 0 1 69 33,01% 8.199 565.728
10-oct sáb RACK 81 0 0 0 1 82 39,23% 8.384 687.454
WEEK 2 341 0 1 0 60 402 27,48% 7.068 2.841.363
11-oct dom BAR 1 82 0 0 0 0 82 39,23% 8.414 689.909
12-oct lun BAR 1 59 0 0 0 0 59 28,23% 7.782 459.127
13-oct mar BAR 1 43 0 0 0 4 47 22,49% 6.210 291.863
14-oct mié BAR 1 45 0 0 0 5 50 23,92% 5.435 271.728
15-oct jue BAR 1 58 0 0 0 5 63 30,14% 6.375 401.637
16-oct vie RACK 71 0 3 0 6 80 38,28% 7.253 580.273
17-oct sáb RACK 76 0 5 0 4 85 40,67% 8.597 730.727
WEEK 3 434 0 8 0 24 466 31,85% 7.350 3.425.265
FORECAST
REVPAR RMS % ADR REV REVPAR
P/UP
RNTS
AVG P/UP
%
1.789
2.141 64 30,62% 6.993 447.571 2.141 - 0,00%
3.060 72 34,45% 8.881 639.454 3.060 - 0,00%
3.000 71 33,97% 8.832 627.091 3.000 - 0,00%
2.734 207 33,01% 8.281 1.714.117 2.734 - 0,00%
1.962 58 27,75% 7.071 410.091 1.962 - 0,00%
1.472 38 18,18% 8.093 307.545 1.472 - 0,00%
1.332 50 23,92% 5.567 278.364 1.332 - 0,00%
1.522 54 25,84% 5.889 318.000 1.522 - 0,00%
1.312 51 24,40% 5.376 274.182 1.312 - 0,00%
2.707 69 33,01% 8.199 565.728 2.707 - 0,00%
3.289 82 39,23% 8.384 687.454 3.289 - 0,00%
1.942 402 27,48% 7.068 2.841.363 1.942 - 0,00%
3.301 82 39,23% 8.414 689.909 3.301 - 0,00%
2.197 59 28,23% 7.782 459.127 2.197 - 0,00%
1.396 47 22,49% 6.210 291.863 1.396 - 0,00%
1.300 50 23,92% 5.435 271.728 1.300 - 0,00%
1.922 63 30,14% 6.375 401.637 1.922 - 0,00%
2.776 80 38,28% 7.253 580.273 2.776 - 0,00%
3.496 85 40,67% 8.597 730.727 3.496 - 0,00%
2.341 466 31,85% 7.350 3.425.265 2.341 - 0,00%

Forecasting
Competitive Study: my hotel vs. my competitors
Apr May Jun Jul Aug Sep Oct Nov Dec
My Property 284,10 268,93 268,90 222,10 179,60 230,75 238,72 222,16 203,48
SubMarket Class 243,75 246,95 244,40 217,35 186,72 211,18 204,09 180,78 161,84
Index 116,6 108,9 110,0 102,2 96,2 109,3 117,0 122,9 125,7
% Chg
My Property 13,8 -2,3 -10,9 2,0 -2,6 -15,6 -3,2 -4,6 -3,1
SubMarket Class 9,7 -2,8 -5,7 3,5 0,5 -7,2 -8,7 -12,1 -5,8
Index 3,7 0,6 -5,5 -1,4 -3,1 -9,0 6,0 8,6 2,8
Apr May Jun Jul Aug Sep Oct Nov Dec
My Property 211,84 210,15 204,26 184,72 140,30 159,09 172,21 140,45 96,23
SubMarket Class 180,10 187,61 179,93 167,68 136,98 145,83 137,30 100,48 69,23
Index 117,6 112,0 113,5 110,2 102,4 109,1 125,4 139,8 139,0
% Chg
My Property -3,8 -13,1 -24,1 -3,7 -8,4 -28,7 -13,5 -22,4 -14,3
SubMarket Class 5,4 -8,1 -17,6 5,6 1,2 -19,3 -21,5 -35,9 -17,3
Index -8,6 -5,4 -7,9 -8,8 -9,5 -11,7 10,2 21,1 3,7
2008
2008
RevPAR
ADR

Forecasting
ES
29-nov Rank 06-dic Rank 13-dic Rank 20-dic Rank 27-dic Rank 03-ene Rank
Current Subscriber 122% 4 of 7 54% 6 of 7 171% 2 of 7 213% 2 of 7 236% 2 of 7 228% 2 of 7
1 Week Ago Subscriber 119% 4 of 7 50% 5 of 7 209% 2 of 7 201% 2 of 7 236% 1 of 7 204% 2 of 7
2 Weeks Ago Subscriber 129% 3 of 7 49% 5 of 7 268% 1 of 7 224% 2 of 7 222% 1 of 7 151% 2 of 7
Green: High Market Penetration (greater than 100%) Red: Low Market Penetration (less than 100%)
Current Subscriber 367 3 of 7 365 3 of 7 362 3 of 7 334 2 of 7 418 3 of 7 293 4 of 7
Competitive Set 340 286 290 328 398 344
1 Week Ago Subscriber 363 4 of 7 420 2 of 7 362 4 of 7 334 2 of 7 418 4 of 7 293 5 of 7
Competitive Set 343 289 324 331 405 323
2 Weeks Ago Subscriber 359 4 of 7 329 3 of 7 362 3 of 7 339 2 of 7 440 4 of 7 305 4 of 7
Competitive Set 327 279 298 304 380 279
Competitive Set 323 284 286 307 376 277
Competitive Set 329 284 298 309 372 286
Green: Above Comp Set Average Red: Below Comp Set Average
Current Subscriber 56 2 of 7 6 5 of 7 19 1 of 7 53 1 of 7 47 1 of 7 19 1 of 7
Competitive Set 199 66 49 79 60 21
1 Week Ago Subscriber 48 2 of 7 4 4 of 7 19 1 of 7 53 1 of 7 47 1 of 7 19 1 of 7
Week of Week of
Room Nights
Week of
A
L
L
Average Daily Rate (USD)
Market Penetration - Revenue
A
L
L
A
L
L
Week ofWeek of Week of
PACE TREND –
how reservation trends are consolidated for a specific date

Forecasting
Lead Time –
informs us of customer demand for a specific date
LeadTimeStatistics 0-3 4-7 8-14 15-30 31+
(BasedonRoomNights) Days Days Days Days Days
RoomNights 19 18 63 73 310
AverageRoomRateinUSD 436,37 318,51 375,33 449,75 366,96
AverageLengthofStay 2,11 1,50 2,17 2,70 2,79
MarketPenetration(RoomNights) 45,3% 35,0% 82,5% 63,2% 110,9%
TotalRoomNights 202 253 340 536 1.164
AverageRoomRateinUSD 457,18 425,99 397,12 426,85 448,39
AverageLengthofStay 1,60 1,71 2,18 2,81 2,58
Subs
Comp
Set
ALL

Forecasting
Study of events in the hotel, city,
conferences, festivals and vacations
Month/Day1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
January B S S S S S S S S S D D D S S S S S S S S D S S S S D S S S S
Specials
MLS
FebruaryE E E E E E E E C C C C E E E E E E E S E E E E E E E E
Specials
MLS
March E D X X A C X X X X X C C X X X X X C C X X C C C C C C C C C
Specials
MLS
April D C C D D D D C C D D D D D C C D D D D D C C D D D D D C C
Specials
MLS
May C C C C A A A A C C C C C C C C C C C C C C C C C C C C C C C
Specials
MLS
Jun C C C C D D D D D D D D B B B C C D D D D D D D D D D D D D
Specials
MLS
Jul D D C C C E E D D E E E E E D D E E E E E D D E E E E E D D E
Specials
MLS
Aug E E E E D D E E E E E D D E E E E E D D E E E E E D D E E E E
Specials
MLS
Sep E D D E D D D D D D D D D D D D D D D D D D D D D D D D D D
Specials
MLS
Oct X X X D D D D D D D D D D D D D D D D D D D D D C C C C C C D
Specials
MLS
Nov C E E E E E E E E E E E E E E E E E E E E E E E E C C C B B
Specials
MLS
Dec B C C C E E E E E E E E E E E E E E E E E E E D D D D D D B B
SpecialsEvent
MLS
Event
Event
Event
Christmas
Event
Event Event Event
Easter
Event
Event

Forecasting
Internal reports that cross-check annual data such as inquiries
for other areas of the hotel alba, apartments, spa

Organigram
DOSMDOSM
Marketing
Manager
Marketing
Manager
Revenue
Manager
Revenue
Manager
eCommerce
Manager
eCommerce
Manager
Dtor. Ventas
Adjunto
Dtor. Ventas
Adjunto
AssistantAssistant Assistant 1Assistant 1 Assistant 2Assistant 2 Assistant 1Assistant 1 Assistant 2Assistant 2
Rvas. Indiv.
CRS
(EQUIPO)
Rvas. Indiv.
CRS
(EQUIPO)
Reservas
Grupos
(EQUIPO)
Reservas
Grupos
(EQUIPO)
Equipo
Ventas
Equipo
Ventas

Exercise 1

Exercises
Reactive measures, short-term

Exercises
Proactive measures – long-term

Exercises
Required Analysis Reports and Actions

Exercises
Daily Tasks
Weekly Tasks

Exercises
Monthly Tasks
Annual Tasks

Exercises
Daily Management
Reservations
Website
Reception

Exercise 2

Exercise
Position your hotel…possible improvements
• Type of hotel
• Positioning
• Characteristics
• Company to which it belongs
• Objectives of hotel management

Exercise
Annual Calendar of Actions
Hotel Month Segment Activity Objetive R/Ngts
Expected
Revenue
Who Cost Status
When we use it…

Exercise
Hotel room structure:
What is the hotel room structure of a ‘exemplary’ hotel like?
What is the structure of supplementary products like?
What is the objective of the ‘extras’?

Exercise
Practical exercise in groups:
• Our hotel has 100 rooms
• 14-21 January in Barcelona with events, conferences, weekends, etc.
• Use BAR of A-D (A is the highest price = 400 and D the lowest = 100)
• Mobile World Congress: 14-17 January we are at 90%
• Group confirmed for 75 rooms 19-20 January
• Average occupation the remainder of January isn’t over 50%

Exercise 3

141141141141Curso Formación de Revenue Management – Madrid 9,10 y 11 Noviembre 2012 Impartido por: Tomeu Pons tomeupons@gmail.com
Exercises
Glossary: Describe y Order by Families
AAVV
ADR
ALGORITMO
ARI
BAR
BOOKING ENGINE
BOOKING PACE
CANAL
CHANNEL MANAGER
CMS
CONSORTIA
CORPORATE
ERP
GDS
GOPPAR
IDS
MPI
ORIGEN
OTA
PMS
RATE PARITY
REVPAR
REVPAV
RGI
RM
SERMENTACION
TTOO
YM

Summary: Revenue Management Concepts

Exercise 4

Exam
Questions:
1. When should you activate an offer?
2. From where does the data from the flow of reservations come from?
3. How do you control the costs of distribution?
4. Besides rooms, to what else can you apply RM in hotels?
5. How do you know if you are selling at prices that are too low?
6. How do you know if you are selling at prices that are too high?
7. How do ‘save’ inventory and why?
8. To whom must availability be given to?
9. When should be create a new type of hotel room?
10. How do you control sales price and who usually lets them get out of control?
11. What are the 5 most important variables of RM? (glossary)
12. When should you reject reservations at low prices and at high prices?
13. What is auto allotment?
14. About your hotel: do a SWOT analysis
15. Make prices for: 1 hotel with 1 room and 1 salon

Summary: Revenue Management Concepts
Free Downloads:
http://www.adhp.org/pdf/1-theBasicsofRM.pdf
http://revenueanalytics.com/pdf/Cornell%20Fe
bruary%202009.pdf
http://cqx.sagepub.com/
http://www.hammerman.com/files/occtrack/fore
casting.pdf
http://www.hsmai.org/members/SIGRevManag
ement.cfm

Tutorial introduction to revenue management for hotels hospitality seminar what is revenue management in hotel industry course-

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