Trilochan Singh
PRM ASSIGNMENT 2
Shikha Verma
PG19118(2019-2021)
Operations Management
Submitted to:Dr.Karpagam
1.Bring out the facts related to the case:
Ans: The case discusses income control (or yield management) problems that are common
in capacity-constrained industries like hotels. The Hotel Avant Garden, located in Jaipur,
India, was a popular tourist and business destination. The hotel had three different types of
rooms (Deluxe, Luxury, and Regular), each with its own price and discount based on a set of
requirements. Leisure travellers, corporate people, travel agencies, and reward companies
were among the consumer groups, each with distinct tastes and desires in terms of room
selection, booking notice time, and length of stay. Eeshita Desai, the hotel's recently named
General Manager, took the opportunity to revamp the hotel's sales control activities. Several
concerns relating to the scheduling of room reservations, as well as each consumer group,
arose during the study. Based on five years of historical demand delivery results, she
determined the booking thresholds, security standards, and overbooking limits for each type
of room and aimed to enforce the new structure in the hotel. However, there were also a
number of other concerns to be concerned with.
2.Why Eeshita was worried about the overbooking and protection limits when demand
forecasting made it simple:
Ans: As a result of predictable events such as concerts, proper competition analysis by
comparisons of occupancy percentages (number of rooms sold/number of rooms available)
and average regular room rate (total room revenue/number of rooms sold) has not been
adequately taken care of. The revenue from room service was also ignored when measuring
the gross revenue. In addition, travel agencies were not included in the calculations. Eeshita
was also concerned with how she can allocate versatile discounting trends, which is a
common procedure in the hotel industry.
3.Why debanjan and arunabha were not impressed with Eeshitas new calculation
model?
Ans: Excessive overbooking, as explained by eeshita in the new estimation model, may result
in penalty costs, which involve both monetary funds provided to bumped customers and
potential loss of future sales due to customer disappointment. In addition, Arunabha
explained to her that the problem they were facing was inadequate overbooking, which
resulted in a loss of room revenue in the short term, but that bumping guests too often could
lead to reduced customer satisfaction and damage the hotel's credibility in the long run.
Debanjan continued that during peak season, the management was often confronted with
circumstances when a leisure traveller requested reduced room rates with booking notices as
late as a fortnight, when there was a chance that the business client might show up at a later
date and be able to pay higher undiscounted rates for the same room. Another problem that
arose when reward companies requested too many rooms during peak season, according to
Arunabha, is that it is more lucrative to see individual rooms to either business or leisure
clients due to their hotel's discounting trend. Denying a reservation to an opportunity
company could result in a loss of sales for the entire tour party, as well as dissatisfaction and
decreased agent loyalty. This is why they were both underwhelmed by Eeshita's current
calculation concept.
4.Do you think the new model established by Eeshita is going to yield results when they
turned down the customer request for room booking?
Ans: Eeshita's new concept would produce better results because the hotel lacked an
appropriate sales management plan, and her strategy could produce better results for the
hotel. This will assist the hotel in maximising its profitability, which is critical in the hotel
industry. Her proposed model will guarantee that higher margins were reached, which is also
important for long-term survival, as well as price discrimination, which is also needed. This
model will also allow the hotel to offer room price discounts based on the difference between
realised bookings and anticipated demand, as requests for reservations typically begin early.