Let us explain to you how revenue manager works when the demand is high or half of your hotel rooms are occupied and others a filling at a fast pace, you can hike the room rates and take advantage of the situation for more profit. What revenue management does is monitor all such factors as the occupancy rate, peak season, upcoming holidays and helps you select the BAR (Best Available Rate) accordingly. As a result, you no longer have to manually conclude the room rate, Booking Hotel.co.in will manage your all the tasks. You can also call it as it’s all in one shop for all your need for bookings
Performance measures of Hotel Revenue Management system
Occupancy Percentage Average Daily Rate
Disadvantages of occupancy percentage and average daily rate as performance measures are listed below:
Occupancy percentage and average daily rate are both one-dimensional analysis
Occupancy percentage and average daily rate are both one-dimensional analysis. As a result, neither of these measuring sticks captures the relationship between these two factors and the room revenue they produce.
Decrease in room rates, and ADR
Hotel May decreases its room rates, or ADR, in an effort to increase occupancy. This strategy will improve the occupancy percentage but it will lower the room rates. This will reduce overall profitability. for such a problem Hotel Revenue management is the solution.
Increase in room rates and ADR
On the contrary increase in room rates and ADR may results in the decline in occupancy percentage. This means that some revenue will be lost because rooms that might have been sold at lower rates will remain unsold. Here comes the role of revenue management.
Revenue manager presents a more precise measure of performance. It combines occupancy percentage and ADR into a single statistic. Revenue manager allows the front office manager to use potential revenue as the standard which can be compared with actual revenue.
To sell the right product (guestrooms, banquets)
To the right customer (business)
On the right day (weekday, weekend, special days )
For the right price (Rate, Corporate rate)
Identification of new market segments
Improved development of short term and long term business plans
Determination of discounting activity
Increased business and profits
Improved seasonal pricing and inventory decisions
Identification of market segment demands
Enhanced coordination between the front office and sales divisions
Establishment of a value based rate structure
Saving in labor costs and other operating expenses