Hotel Revenue Management and Yielding Strategies

ALOS: Average Length of Stay

Total occupied room nights/total bookings

Attrition

Difference between the number of rooms reserved compared to the number of rooms used

Booking Curve

An important tool for yielding that provides a visual representation of the pickup, number of bookings, availability, and yielding capacity of the hotel over time

Pick Up

No. of reservations between today & day of arrival

Contract

>30 nights + large volume

Group

>10 rooms, contract, deposit

• Corporate: Negotiated rate for a block with a specific company
• Association/Convention: Negotiated rate for a block with trade, professional, philanthropic association
• Government: Negotiated rate for a block with a qualifying government agency

Transient

Ind & groups

• Retail: Market position, seasonally priced
• Discount: Rate open to the public, > than retail
• Negotiated: Rate negotiated with special accounts
• Qualified: Rate that needs to be associated with a particular org
• Wholesale: Discounted room rate packed with outside travel before being sold

OOO

Out of Order => change light bulb

OOS

Out of Service => VIP coming, so clean & don't sell

OOI

Out of Inventory => take the entire floor out of sales

Controls as RM

Fixed capacity, perishable inventory, demand fluctuations, demand forecasting, market segmentation => RMs usually use 3rd degree price discrimination

Uncon

Con + regret + denial

Denial: Customer wants to stay but we don't have rooms (CTA, ALOS)

Regret: Customer searches but doesn't book (cancellation, room feature's not available, rate resistance)

MAD = sum(actual - forecast)/n => only useful for single items, average of how far off we are

MAPE = [sum(actual - forecast)/actual]/n * 100 => average over time

STAY Controls

MINLOS: Select reservations requests that will yield a higher average occupancy percentage for that/surrounding dates

MAXLOS: Limits on the number of reservations for a date

CTA: No new reservations used for a particular arrival date

Look to Book = bookings/unique monthly visitors

Agency M: Payment goes through directly to the hotel & hotel provides the OTA at this rate & then the hotel pays the commission

Merchant M: Direct pay to the OTA, after check out the OTA moves the money to a hotel => OTA buys the rooms

Tonight's forecasted OCC% = last night's occupancy - departures + arrivals or stayovers + arrivals

Stayovers = last night's occupancy - departures

Conversion Ratio = # groups contracted / # group inquiries

Group Wash: Difference between contracted & blocked rooms for a group

Group Pick-up: Number of rooms that are already reserved

RevPAR: ADR * OCC%

RevPAC: Total revenue from specific customers/number of specific customers

RevPOR: Total revenue/total occupied rooms

NRevPAR: Net room revenue/total rooms available for sale

Net room revenue = room revenue - (distribution cost + transaction fees + travel agency commissions)

GOP = total hotel revenue - (departmental expenses + undistributed expenses)

RevPATI(available time period) = average rate * OCC%