Week 3 Assignment-Revenue Management
The hotel industry uses revenue management or yield management to ensure higher profits. By developing guest room sales strategies higher profits can be obtained. If a hotel has food and beverage options then yield management is used to track and evaluate sales to ensure that these amenities are assisting in raising profits. Yield management has many different components which include revenue realized, revenue potential, optimal occupancy and rates, strategies, forecasting, block-out periods and challenges (Bardi, 2007). In many hotels, there is a revenue manager who is in charge of monitoring sales opportunities to increase sales and revenue in order to realize and obtain financial gain.
Yield = ----------------------------
85 rooms at $98 = $8330
65 rooms at $90 = $5850
90 rooms at $75 = $6750
Revenue Realized = $ 20,930
300 rooms at $98 = $29,400
Yield % = $20,930 / $29,400 = 71.19 %
I would need to obtain more information in order to complete the task assigned by the general manager. There are three pieces of information that I would need to know. First, I would need to know the rack rate for the October Annual Weekend Homecoming. Second, I would need to know the average cost of breakfast. Third, I would need to know the average cost of dinner. The cost of breakfast and dinner would need to be based on a double occupancy due to most of the people coming for the Homecoming will have a quest with them. The package would include a kick-off breakfast buffet. Since breakfast is the least expensive meal and it is the optimal meal to provide within the package. I would also include a discount on the dinner after the game. With the dinner I would prepare a special dinner menu that offers the discounted rate. This will also allow us to control the pricing and profits by...
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