I. konferenca
Združenja hotelirjev Slovenije
1
Dr. Gorana Ivankovič, izr. Prof.
UP FTŠ Turistica

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European Hotel Prices in April 2013 increase by up to
38% following last month’s decrease
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
V prvih petih mesecih je v Sloveniji padla povprečna stopnja zasedenosti hotelskih zmogljivosti za 10 % v primerjavi z lanskim letom.
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 Sobe – temeljna kategorija (opredelitev zmogljivosti, % zasedenosti, povprečna cena/soba, GOP/sobo, stroški dela/soba, rezervacijski in distribucijski sitemi, segmentacija gostov, dnevi v tednu po zasedenosti…)



Hotel – temeljna enota poročanja po USALI
Zajemanje stroškov (neposredni, splošni obvladljivi, neobvladljivi)
% GOP/Rev
 Rev/PAR
 ADR
 BAR
 Yiled percentige
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-
-
-
Za namene predvsem finančnega računovodstva
Vpliv ameriških mednarodnih hotelskih verig
Enotni standardni sistem računovodskega poročanja na ravni poslovne enote
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
POROČANJE PO
POSLOVNIH ODSEKIH
JE V SVETOVNI
HOTELSKI INDUSTRIJI
PRISOTNO ŽE OD
LETA 1926!
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 Kratica od:
 Uniform System of
Accounts for the
Lodging Industry
 Pomeni:
 Enotni sistem
 računovodskega poročanja v svetovni hotelski industriji

 KAJ JE TO – Standardi poročanja v svetovnem hotelirstvu in prvi uspešno organiziran poskus vzpostavljanja računovodstva odgovornosti
 KJE SE DOBI - Knjiga USALI - X izdaja iz leta
2006, American hotel & Motel Association
 OD KDAJ JE V UPORABI Od leta 1926, začetnik
Hotel Association of New York City
 KAKO FUNKCIONIRA – omogoča primerjavo dosežkov posameznega hotela s povprečjem primerljive skupine

Koordinira konzultantska hiša
“Horwath&Horwath” – World Wide Hotel Industry
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UPORABNIKI POROČIL : ZUNANJI IN
NOTRANJI (ravni poslovodstva) : najvišje poslovodstvo srednja raven poslovodstva nižja raven poslovodstva
 USALI
VSEBINA POROČILA : VRSTA INFORMACIJ, KI JIH
POSAMEZNA POROČILA MORAJO VSEBOVATI ?
temeljna finančna poročila notranja poročila (odseki in stroškovna mesta) odvisno od vsebine ponudbe
DINAMIKA
POROČANJA: dnevno tedensko mesečno letno
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z z z

PRI STROŠKIH IN ODHODKIH
 Hotel mora zagotavljati podatke: o neposrednih stroških posebej za vsako dejavnost (stroški prodaje, stroški dela in drugi stroški) splošne spremenljive poslovne stroške
(administrativni in drugi upravni stroški, splošni stroški dela...) stalne splošne stroške (nagrade poslovodstvu, najemnine, stroški zavarovanja, obresti, amortizacija...)
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 PRI POSLOVNEM IZIDU HOTELA:

Čisti prihodki po poslovnih oddelkih
 neposredni stroški po poslovnih oddelkih
 Prispevek I po poslovnih oddelkih
 (obvladljivi) poslovni stroški
 Prispevek II (GOP hotela)
 stalni stroški (neobvladljivi)
 Prispevek III (poslovni izid hotela pred obdavčitvijo)
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 primerjanje dosežkov hotelov (mednarodna raven)
 enotno opredeljevanje kazalcev in kazalnikov za hotele in za posamezne ravni odločanja
 nagrajevanje poslovodstva in zaposlencev skladno z dosežki
 podlago državnim inštitucijam za odločanje v turizmu
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KAZALNIKI
DENARNI
(hotelirstvo - USALI)
PRETEKLI
DENARNI DOSEŽKI
- transparentnost
- primerljivost
- kratkoročna naravnanost
NEDENARNI
RAZMERE ZA
USPEŠNOST V
PRIHODNOSTI
- možnost napovedovanja
- negativni trendi
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Primer: Hotel na letališču
2011
Zasedenost % 58 %
Povprečna cena
RevPAR
84,5 €
49 €
2012
65 %
83,5 €
55 €
+ 12 %
- 1 %
+ 11 %
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Primer: Letoviški Hotel
Zasedenost %
Povprečna cena
2011
70,6 %
55 €
2012
76,1 %
52,5 €
RevPAR 39 € 40 €
+ 8 %
- 5 %
+ 3 %
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 letalska podjetja
 hotelska podjetja
 rent a car podjetja
 organizatorji potovanj
 organizatorji križarjenj
 možnosti bi bile še golf igrišča, gledališča, muzeji, turistične privlačnosti, zabaviščni parki…
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Accor group
Radisson SAS
Forte - Le Meridien
Savoy group
Thistle group
Southern sun group
Scandic hotels
Concorde group
Holiday Inn
Grand Hotel Holdings
Jarvis
Dorint
Envergure group
Oberoi group
Best Western
Sofitel
Chateaux et hotels de
France
Sofitel Firenze
Ibis Group Milano (7 hotels)
Mercure Roma (3 hotels)
Metha group (8 hotels)
The Charming Group Roma
Hotel Milano
Eden Roma
Barchetta Hotel
Villa D’Este Hotel
Advance Group
Bertolio Hotels
Hotel Enterprise
Hotel Savoy Majestic
Antares Group
Ripa All Suites Roma
Hotel Milano Bratto
Boscolo Group (15 hotels)
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Gallia Milano ...


Učinkovita komunikacija med porabnikom in ponudnikom
 Ustrezna organizacija poslovanja
 Integracija sistema YM z drugimi sistemi

Prosti tok trženjskih informacij

Splošno dinamičen trg
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
Cenovna elastičnost = % ∆ povpraševanja

% ∆ v ceni

Prihodkovna elastičnost = % ∆ v povpraševanja

% ∆ v prihodih

Križna elastičnost =
% ∆ v povpraševani količinX

% ∆ cene proizvoda Y
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 Segmentacija trga

Podatki o preteklem povpraševanju, gibanje rezervacij in gibanje povpraševanja po sobah za določeno obdobje ter napovedovanje povpraševanja

Metode in načela oblikovanja cen

Dobro oblikovanja načela prebukiranja
 razvit informacijski sistem
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Prodane sobe
Razpoložljive sobe x
Povprečna cena
Najvišja možna cena x 100
Doseženi prihodki
Potencialni prihodki x 100
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Implement objectives
Pre-requisits implement

Za implementacijo tipičnega YM programa se potrebuje cca.
 od 2 do 3 leta
Q1 Q5 Q6 Q7 Q8 Q2 Q3 Q4
Identifikacija potreb
Implementacija informacijskega sistema
Organizacija, izobraževanje, in nagrajevanja
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1.
Analiza podatkov
4.
Zbiranje povratnih informacij
3.
Določanje strategij
2.
Predvidevanje
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 Dejanski prihodek = Št. prodanih nočitev

Potencialni prihodek Št. razpoložljivih noč.
 X

Dejanska povprečna cena nočitve
Potencialna cena nočitve
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 Na osnovi informacij, ki jih redno spremljamo, kot so:
ò pretekle rezervacije in povpraševanja skupin, individualnih gostov , nepričakovanih (walkin) gostov, slučajnih (chance arrivals) gostov
ò pomembni dogodki v okolici
ò aktivnosti konkurence
ò promocijske akcije
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ò
ò politiko overbookinga poznavanje vedenjskih značilnosti potrošnikov
ò vremenske razmere
ò itd...
 Te informacije bodo dale prodajnemu timu osnovo za oblikovanje cen svojih storitev
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 Ko smo na podlagi informacij predvideli povpraševanje ciljnih skupin je potrebno izdelati marketing mix za te ciljne skupine in strategije pridobivanja teh strank
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 popusti
 segmentacija
 paketi
 diferenciacija na podlagi dodane vrednosti
 repozicioniranje

 kratki oddihi določitev časa bivanja
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Strategije oblikovanja cen
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 Price is the sum of the value consumers exchange for the benefits of having or using the product or service.
 Further, prices are the only part of the marketing mix that directly create revenue.
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5.
6.
7.
1.
2.
3.
4.
 What is the price of a room and what is the value? It is very difficult to give an answer because, you need to answer to several other queries first:
Where is the hotel?
How far is from sea, motorways, the centre of the town?
Which period of the year?
Which kind of hotel (stars, services, etc.);
Which kind of service (B&B, HB, etc.);
Which kind of room (single, double, suite, etc.);
How many days do you live there?
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 Prices are too cost oriented. They are increased to cover increased costs and don’t allow for demand intensity and customer psychology;
 Price policies are not adapted to changing market conditions.
 Prices are set independent of all elements of the marketing mix.
 Prices ignore the peculiarities of the customers.
 Prices are a decision of management rather than marketing.
 Prices are set without to take into account the marketing objectives to achieve.
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
1.
2.
The variables to create a pricing strategy are:
Internal variables;
External Variables.
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 Financial objectives;
 Marketing objectives,
 Volume objectives;
 Fixed and Variable costs.
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
Financial objectives are probably the most dominant objectives in the hospitality industry.
 Profit is the one that usually comes to mind first, but built-in profit determination may be hard to achieve in the hospitality industry.
 Sometimes, the thesis that the higher the price the greater the profit is not true. Infact, high prices alone will reduce volume in most cases. So the operators reduce the price to get the customers with the double effect to reduce the revenue and to depreciate the product.
 Another financial objective in pricing is target return on investment (ROI).
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
Marketing objectives deal with the actions that a hotel must do to affect in a favourable way the demand by price.
 One of the marketing goals is to achieve the trust of the customer by clear and steady prices. This goal can be achieved by special rates for high spending costumers.
(corporate rates).
 Another objective could be to cut market share from the competition by strong promotional efforts. If a hotel offers a Unique Selling Proposition (USP) can start with the highest price that a high spending segment of customers can bear. In this case, the hotel can avoid the initial discounts.
 Another objective could be to desensitize the customer to the price by all included price strategy. This is also called price bundling.
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
Some volume objectives are: to increase market share and /or customer base, occupancy or seat turnover, and contribution to fixed costs.
 In particular, occupancy objectives are very important in the hospitality industry, where fixed costs are high, whereas variable costs are low. Usually, they do not overcome 10 or 20% of revenue. As soon as fixed costs are covered a small earn can bring an important increase of the profit.
 The best thing to do to improve the occupancy is not to reduce the price. The best strategy is to use promotional efforts to attract particular segments of customers or to convince the actual customers to stay longer.
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Fixed, Variable & Semi-Variable costs
 Fixed costs do not vary with changes in sales volume.
Examples are rent, rates, salaries, insurances, depreciation;
 Variable costs vary in proportion to sales. Examples are: foods, beverages and laundry;
 Semi-variable: vary in sympathy with, but not in proportion to, sales volume. Examples are: power, telephone and wages.
 A hotel can reduce the prices to a certain extent depending on the quality and the amount of service offered. Infact, when the prices are too low the quality of service offered can be seriously affected.
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 The market, the actual and potential demand;
 The availability of rooms in the area;
 The prices and the offer of competitors;
 Variables like: inflation, devaluation, downturn, etc.
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 A correct pricing strategy starts from a perfect knowledge of the hotel’s market and position in an area and finally, who the competition is.
 Who are potential customers and what do they look for? It is very important to know our customers and the potential of development.
 It would need to be always up-to-date on current occupancies and arrivals of the area.
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 It is very important to get the statistics of the competition on subjects such as: number of rooms available, prices, good quality information on products and services offered, types of customers and proposals offered There are some indexes that can help with this analysis.
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The Fair Share and The Market Share: an example
Our Hotel
Number of
Rooms
300
Available
Rooms
109.500
Percentage
Occupancy
Rooms Nights
Sold
76.5
83.768
Hotel A
Hotel B
Total
454
400
1.154
165.710
146.000
421.210
70.0
75.0
73.8
115.997
109.500
309.265
06/20/13
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 Fair Share = (Individual property available room nights/Total market available room nights). The amount must be multiplied x 100.
 Our example: Our hotel would have a fair share of 26%
(109.500 rooms divided by 421.210); hotel A would have a fair share of 39% and hotel B 35%.
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 Market Share = (Individual property room nights sold/Total market room nights sold). The amount must be multiplied
X 100.
 Our example: Our hotel would have a market share of
27% (83.768 room night sold divided by 309.265); hotel A would have a market share of 38% and hotel B 35%.
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 According to the suggested example, our hotel’s market share is 1% more than its fair share; the hotel’s A market share is 1% less than its fair share while the hotel’s B fair share and market share are the same.
These figures show that our hotel is enjoying a small measure of success, while the hotel A is at a disadvantage in the market and the hotel B is just holding its own.
 This market analysis is helpful both in terms of tracking area market trends and in measuring the impact of various marketing strategies.
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 It is the index (based on 100) that allows to verify what is the percentage of the hotel compared to that of the market. You can achieve that by:
(Market Share/Fair Share).
 If the result is higher than 1 (or you sold more rooms than your fair share) your penetration index compared with that of the market will be growing, differently, will be falling.
 In particular, this easy ratio compares effectively the market share that one has to achieve – based on the number of rooms compared with those of the total market.
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Hotel 2
Hotel 3
Hotel 4
Total
Our Hotel

The Competitive Market Analysis
Rooms available daily
Rooms available yearly
% Fair Share Rooms Sold % Occupancy % Market
Share
Market
Penetration
Index
85 31.025
17.8
20.083
64.7
17.8
1.00
Hotel 1 140 51.100
29.3
32.748
68.0
27.9
0.95
60
478
69
124
25.185
45.260
21900
14.4
25.9
12.6
13.213
29.814
16.681
174.470
100.00
112.538
64.5
64.1
65.9
76.2
11.7
26.5
14.8
100.00
0.92
1.02
1.17
06/20/13
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

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 Cost – Plus Pricing;
 Mark-Up Pricing or Percentage Cost
 Break-Even Pricing;
 Contribution Margin Pricing;
 Building Cost Rate Pricing (or 1X1000 method);
 Method of Inflationary Calculation.
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 This method involves establishing the total cost of a product, including a share of the overheads, plus a predetermined profit margin. A common use in pricing
Food and Beverages is to relate the profit margin to the selling price.
 Thus if the desired profit is 20% of the selling price, an item that costs € 4, plus € 2 labor and 2 overhead, would be priced at € 10. This results in 2€ of profit for that specific item.
 Limitations: Cost plus pricing does not allow for flexibility in pricing decisions, nor does it take into consideration consumers’ perceptions of a product value. This method is totally cost oriented and ignores demand. Further, this method is also subject to mis-allocation of fixed and variable costs which needs to realise the hotel’s service product.
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Mark-up Pricing or Cost Percentage
 This method is heavily used by the restaurant industry.
The selling price can be achieved by multiplying the cost of the product by an extablished co-efficient, or a mark-up.
If a restaurateur buys a bottle of wine for the price of €10 and resells it at €15, his gross margin is €5. It means that he will have applied a mark-up of 50% of cost and of 33% of the selling price.
 Limitations: this strategy is totally cost-oriented; it ignores consumer perceptions of value, particularly in times of widely fluctuating costs; it tends to price high-cost items up to a level that customers are unwilling to pay.
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 Break-even pricing is used to determine at what sales volume and price a product will break-even, where costs are equal to sales.
 It distinguishes between fixed and variable costs.
 The break-even point is graphically plotted for prices using the same fixed and variable costs. By plotting the revenue generated at various prices, a comprehensive picture of profit can be created if the demand is known at various levels.
 Break-even analysis is a fairly efficient method of determining profit margins at various price levels if sales volume can be accurately predicted at the different price levels. To predict this volume, knowledge of consumer perception and demand is still needed.
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Break-Even Pricing: An Example
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
This technique is very useful for hotels in soft periods of demand: Rooms prices can be discounted substantially, in order to have them occupied. Even though no profits are made, a portion of the fixed costs that would occur if the room was not occupied would be covered.
 The success of this technique must be assessed by examining the total revenues from the rooms sold. After all, selling more rooms at discounted prices may have the same effect as selling fewer rooms at higher prices.
 Limitations: this method looks for an increase of occupancy, but, can be very difficult in improving the overall profitability of the hotel. Furthermore, there is a risk is of depreciating the offers.
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Building Cost Rate Pricing (or 1X1000 method)
 This is a unique method for establishing the selling price of hotel rooms. Although it should serve strictly as a rule of thumb, it is still widely used as a measure in the hotel industry.
 The rule is that the average room rate in a hotel should be
€1.00 for every €1.000 of construction cost for room. Thus if a hotel cost €80.000 per room to construct and furnish, the average selling price of the room should be €80.00
 Limitations: this rule of thumb is somewhat archaic in today’s world and totally ignores consumer perception and demand. It should be used more at starting point than anything else.
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Method of Inflationary Calculation
 In this case the price is achieved by increasing the amount of the last year by some points of percentage according to the inflation.
 Limitations: It takes into account the increase of costs but, it doesn’t consider the market at all.
 Further, this method shows the customer only the increase in price, without verifing an improvement in the quality of service.
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 Competitive Pricing;
 Perceived- Value Pricing;
 Expectation Pricing;
 Psychological Pricing.
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
This cannot be considered a real strategy but an habit of several hotelkeepers to set their prices at the same level of the competitors. Basically, prices are set to the level of the strongest competitor in order to defeat it on pricing.
 This strategy has been adopted from the firms that are not market leaders, but based just on the idea to offer lower prices than other competitors.
 Limitations: this method brings a levelling of prices and services and results in an impoverishment of overall offers available in the area.
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 Perceived-value pricing uses the buyers’ perception of value, not the seller’s cost, as the key to pricicing.
 Researchers ask buyers how much they would pay for a hotel room with and without certain amenities. This information provides an idea of which features add more value than they cost.
 A successful guest price mix depends on careful study of the behavior profiles of major guest segments. For most hospitality companies, this begins with a separation of guests into leisure and business segments.
 Undoubtedly, the most important distinguishing profile characteristics of these two major segments is their relative degree of price elasticity. In general, business travelers exibit a inelastic price behavior and leisure travelers an elastic price response.
 Limitations. This method can set a price too high or too low according to the interpretation of demands made.
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

The reference or expected price is that consumers have in mind, is based on some kind of prior experience or knowledge. Reactions to prices will vary around this pricing.
The research says that customers’ satisfaction occurs when the actual experience is equal or greater than that which is expected.
 Thus, contrarily, consumers would be also satisfied when the price paid is the same or less than that which he or she is expected to pay for what was received.
 Limitations: It is very difficult to understand in a correct way the right expectations of demand and this brings the need for continues research of the different segments’ expectations.
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 Psychological pricing considers the psychology of prices, not simply the economics. There exists a relationship between price and quality, for this reason prestige can be created by selling products and services at a high price.
 Another aspect of psychological pricing is reference prices; these are prices that buyers carry in their minds and refer to when they look at a given product.
 Another psychological pricing technique is called price-lining. This technics groups prices togehter so that a perception of substantially increased quality is created. For example, a wine list might have a group of wines in the €8 to €10 range and have the next grouping in the €14 to €16 range.
 Still another version of psychological pricing is called odd numbered pricing. This is a familiar tactic. Items sell at €6.99 rather than €7.00 to create a perception of a lower price. This tactic is often used in menu and hotel room pricing.
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
1.
2.
3.
4.
5.
6.
7.
8.
9.
In order to set a reliable rates’ strategy you need to attend to the following points:
What is the rack or standard price?
What discounts should be offered?
How will prices vary among different markets?
How often should prices be changed?
What impact should timing have on pricing?
What prices should be set for various facilities and services?
Should prices be unbundled for different parts of a service package?
What prices should be charged to non guests?
Should each item cover costs or produce a profit?
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
1.
2.
3.
4.
5.
In order to create an efficient price list there are some rules to follow:
It should have a graphics layout consistent with the image of the hotel, for this reason it must be realized from a graphic;
The price list should be reprinted every year, so, one can change some photographs in order to present new services offered
It should be printed in different languages, and should not be printed just as an edition in four languages;
The photos must communicate the atmosphere of the hotel, in order to have a powerfull effect, for example – include people instead of showing just empty places;
The paper should be heavy weight; preferably a good quality better cardboard;
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6.
7.
8.
9.
10.
The price list should be easy to read and pleasant to see;
The special offers and discounts should be highlited using colors and graphic;
The prices’ list should be targeted to different segments of customers; in case the hotel has two different kind of customers, it would be better to prepare two different kinds of the price lists;
The prices list should be the same as the method of communication adopted;
The prices’ list should contain various methods to promote low season and difficult periods, with attractive phrases such as: (“a surprising stay”; "a golden autumn …” etc.).
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The Prices’ List: Concluding Remarks
 It should be remembered that different types of rooms should be on the price list.
1.
They must be clearly highlited and to achieve this goal one can use different colours and symbols;
2.
One can use pleasant names, that refer to the identity of the hotel or that refer to items in the surrounding area;
3.
One can adopt names that reflect the level of quality offered;
4.
They should be well presented with indication of services and features offered at the hotel.
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Kind of Room Occupancy
Single
Occupancy
Double
Standard
Superior
De Luxe
Junior Suite
Suite
€150
€180
€200
€320
€360
€235
€270
€300
€320
€360
The different kind of rooms must be explained.
The rates offered are inclusive of Room + Breakfast+VAT+Taxes and Services
One should explain all the different services offered.
Check-out time: at 12.00.
All different types of Credit Cards are accepted.
06/20/13
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






 Two-tier Pricing Pricing Methods
 Decisions
Cost-Plus
Rate of Return
Method
Primary
Pricing Going Rate
Decisions Method



 Secondary Contribution Margin
Pricing Method
Decisions
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 General presentation of Yield Management
 The application to different industries
 The main concepts and techniques
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 Structural changes :




More competition
More capacity
Market more sensitive to price and more segmented
A trend towards deregulation
Source : The Economist
 Increasing load factors but decreasing yields. Results
IATA for 1993 to 1999 :


+ 47,3 % in traffic
- 7,0 % in yields
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 Yield Management is the practice of maximizing profits from the sale of perishable assets, such as airline seats or hotel rooms, through a combination of pricing and inventory controls.
  Synonyms of YM are :
 Real-Time Pricing and Inventory Management
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 Airline seats
 Hotel rooms
 Advertising space
 Railway seats
 Tour Operator packages
 Car rentals
 Utilities (electricity supply...)
 Retail stores
The resulting value of all these products will be zero if they are not sold on-time
80

A discipline poised to explode
± 80%
Airlines
1980
Installation Rate
(estimate)
± 20%
Transport
1985
Car rental
Hotels
1990
Freight
Tour operators
Media
1995
< 1%
Distribution
Power supply
Automotive
Health
Telcos
Financial services
E-commerce
2000
81

 Better match supply to demand
Demand
Scheduling
Planning
Overbooking
Supply
Price stimulation
Fare differentiation
82

- 3 Years - 1 Year - 6 Months
Strategy / Development
• Fleet definition
• Property acquisition
Tactics / Scheduling and pricing
• Flight schedule
• Fares and conditions
• Allotments
- 3 MonthsCheck-in
Operations / Yield and capacity adjustment
• Increase/decrease capacity
• Close/open sales quota
83

YM Performance Indicator (Hotels)
Load
Factor
Revenue per
Occupied
Room
Yield Management Optimizes
REVPAR
Revenue per
Available
Room
84

Revenue per
Available seat
=
Load
Factor x
Revenue per
Occupied Seat
R / AS
350 $
350 $
350 $
LF (%) R / OS
60 % 583 $
70 %
80 %
500 $
437 $
 The same performance can be obtained through different load factors and fare policies
 A yield index can to maximum theorical result :

 The Concepts of Yield Management are identical for any service company
 Its Applications differ significantly between companies
 The analysis of the Sales Cycle allows to point-out key differentiation criteria between companies
86






The Market is Huge …
356 000 hotels
15 millions of rooms
3,6 Billions of night stays
1,6 Billions of reservations



…but fragmented
Independents : 85% of hotels for 65% of rooms
Chains (300) : 15% of hotels for 35% of chambres




…with a variety of management schemes
Independents Management Contracts
Franchised Associations : Best Western, relais du silence
Chains
87

Hopitality has the strongest potential for growth
88




Many Intermediaries
Many systems, often not properly interfaced, and technologically obsolete

Many « fees » affect RevPAr
Client
Rate
$100
Travel Agent
Commission
$10
GDSs
Booking fee
$3.5
Switches
Booking fee
$2.5
Call Center Hotel
Management fee $4
Net Revenue
$80
$20

Customers
Travel Agent GDSs
Direct (Phone, email, fax, hotel website, …)
Aggregators
& Switches
Hotel Chains
Central
Reservation
Systems
Property
Management
Systems
Regional/local
On-line
Aggregators
Online Travel
Agents
Brick & Mortar
Travel Agents
Sabre
Galileo
Worldspan
Switches
Direct (Phone, email, fax, hotel website, …)
CRO
Call
Center
90

Properties
Hotel Chains
PMS
CRS
PMS
PMS
CRO
Call
Center

PMS’s are THE source of information for both fares and availability

Several PMS’s may coexist for one given hotel chain

The CRS is the « marketing » center
 Availability and fares may not be as accurate as in the PMS’s
 All distribution channels may not have access to the PMS’s and they may not have access to all available fares and to true availability
 Capacity control is decentralized
91

 15 CRS : Rezsolution, Xenon…
 60 PMS : Fidelio, Hogatex…
 A few « PRS » : Opera
 Switches (mere connections to GDS’s, with little added functional value) : Pegasus, Wizcom
There is no IATA for the hospitality
92

 Length of Stay Control versus O&D


O&D are more numerous than LOS, but…
…Early departure and unexpected stay overs during a flight are not recommended
 Hotels have yet to embrace the fencing concept

Few Apex or senior/youth fares

Bargaining skills of guests can make a big difference

Hotels communicate on highest rates…not on lowest
 Airlines are more flexible in adjusting capacity

Hotels can’t fly to where customers are waiting

A new hotel cannot open suddenly to cope with excess demand
93

 Assume an hotelier wants to improve the yield of a standard room which usually sells at 80 € the night …

His first idea will be to improve the comfort of this room …
80 €
200 €
94

 However, if this hotelier cannot sell this room anymore, because it is too expensive for his usual guests, the investment made has served nothing …
.…but make him bankrupt !!
95

 The basic principle is to sell rooms according to demand and not according to the level of comfort
96

1.
The Hotel management makes more or less realistic rolling forecasts, under the pressure of the owner or the headquarter…
2.
The marketing people like innovation : new markets, new products, new fares, marketing campaigns… all the better if it serves the revenue optimisation objective…
1.
The reservation office answers all reservation requests and try to accomodate them, without necessarily applying all restriction rules …
1.
The "corporate" department will try to negotiate as many room nights as possible
97

 Conflicting objectives
 A marketing campaign is launched when the hotel has no room available
 The human factor
 A clever reservation manager can have a good picture of his hotel business for the next two months
 Group bookings produce high spill of individual demand
 But he certainly cannot consider all parameters for the whole year to come
 The front desk is faced up with high walk out rates due to excessive overbooking
 Besides, making a good forecast is dependent on the
« living memory » of the hotel

…
98

 A good forecast must integrate two things
Environment
Analysis
History
Analysis
Data must be relevant to the hotel and to its environment
99

Concepts
* A good optimisation must produce recommendations based on :
Hotel
Strategy
A good
Forecast
Intuition is replaced by a scientific blend of probability calculation and capacity optimisation
100

Concepts
* Accepting or denying a group business can be made after an economic trade off between group requests and future individual bookings :
A group
Materialization analysis
Forecast of
Incremental
Demand
101

What capacity for a given price?
What guest will book when?
Revenue
Management
What price for a given capacity?
102

 Pricing
 If price is flexible
 Fare/Rate availability control


If multiple fares are offered
Open/close or booking limits (sale quotas)
 Alternate availability
 if multiple flights serve the market or if alternative dates/accomodations are possible
 Overbooking - Capacity management
 If capacity is limited and reservations cancel or do not show-up
 Origin and Destination Control or Length of stay
 for multileg flights or hubs or hotel stays
 Reservations Control
 80 % of the time of yield analysts...
 Group Quotations
103

Components
Data
Analyzer
• Reservations
• occupied rooms
• Revenues
• denials
Daily capture
Models & forecast
•Time series
•Long term
•Dynamic forecast
Front-Office
Optimisation
Recommendations
• Booking limits
• Overbooking
• length of stay
Deal
Quotation
Centralised
ReservationSystem
104