Average Daily Rate

Room Revenue/# of rooms sold

Revenue Per Available Room

ADR x Occupancy Percentage

*This is the most reliable measure of a hotel's yield management & financial performance

•  Business the hotel will receive simply by existing/being in business. 
• Guests seek lodging at the property if costs are within reason.

o   Method of controlling and managing capacity profitability.

o   Managed through yield management modules or integrated yield management software.

o   Used interchangeable with the term “revenue management”

• Perishable: if the hotel room is not used; it goes to waste
• Fixed capacity: max. number of rooms you can fill
• Carries high fixed costs/variable costs: already have to pay for costs of electricity, staff, etc. ; cost of renting out a room is low
•  Can require advance reservations: so you know how many people are already booked for the night/how many open rooms
•  Variable time demand
•  Operator can design the cost/pricing structure
•  Sold to markets that can be segmented

Booking curve approach

A mathematical approach to opening and closing rate classes. 

*There are limited rooms available for sale in each class

[ex: as the rooms fill up in the discounted rate, only the higher classes become available]

• Most common accidents are slip/fall
• Most of these occur in the bathroom (because the ground is slippery and the bar they grab does not remain fixed)
•  To fix: properly clean, periodically replace and select attractive colors and designs
•    Also put safety notes on the soap

CUTS: received on sharp metal, burns, bumps & bruising

HOUSEKEEPING & ENGINEERING

*because majority of guest injuries are due to cleanliness, or disrepair

PUBLIC AREA Injuries

• ¨Falls:  poor traction, ice/water, poor lighting, flooring disrepair or seams, tripping over objects, parking lot holes and curbs.
•  ¨Elevator safety protocols

•   ¨Banquet accidents often occur due to the hurried nature of the job.
•   ¨Falls off stages, stairs, tripping over equipment/wires, food or liquid spills

• ¨Slippery deck surface
• ¨Head injuries/drowning
•   ¨Cuts
• ¨Allergic reactions

o   ¨Shows concerns

o   ¨Identifies problem areas

o   ¨Helps identify areas that need to be rectified to prevent recurrence.

o   ¨Should be conducted within 24 hours of the accident or injury.

§  So everything is still fresh in the minds of those involved

·       Only exception is if someone needs medical assistance

§  Investigator should keep in mind:

·       Let injured party tell the story

·       Take the injured party back to the scene of the accident

·       Determine what the injured party was doing just before and at the time of the fall

·       Verbal reenactment is valuable, but never let anyone repeat physically

·       Avoid placing or accepting the blame

o   ¨Allow involved parties to talk freely and don’t judge, or ask leading questions.

  **Just keep them focused on the issues

o   ¨Document, document, document!

§  Identify follow-up action

** Provide defense for the hotel against groundless allegations or negligence

**  Inform department heads when finished to plan future action

·       Document for two reasons:

o   1.) identity what action needs to e taken to prevent reoccurrence

o   2. Provide defense for hotel against groundless allegations of negligence 

·       What purposes/functions do the security department have?

o   ¨“The rapport established by a security department employee with an upset guest can profoundly affect the guest’s perception of the hotel and make affect the course of subsequent legal action.”

o   Minimum standard of reasonable care, as defined by management, must be maintained at all times

o   Professional and effective security department ensures

§  Customer safety

§  Comfort

§  Security of guests/employees/corporation’s assets

§  Makes an indirect contribution to hotel’s financial success

o   ¨Master key control

o   ¨Emergency key control and access

o   ¨Tested emergency procedures (bombs, floods, earthquakes, tornados, gas leaks, riots, etc.)

o   ***should maintain log of all incidents 

·       What tools exist to help a hotel market their product?  

•   Preparing advertising
• A designated advertising agency
•   Developing brochures and other collateral materials
•   Conducting database mailings
•   Packages
•   Promotions
• Conducting public relations activities (news releases, speeches, articles, photos, etc.)

·       Be familiar with the marketing and advertising process, as well as different tools (e.g. promotions) and how those different tools are utilized

• o   ¨Promotions:  In competitive markets, extra incentives are needed to win business.  Promotions (specials) work to meet this need.
•   Fulfill a marketing need:  build new business, develop a larger share of existing business, keep business, gain repeat business.
• o   ¨Packages:  Hotels and resorts frequently try to attract customers with packages.
•   Themed
• Depicts value/savings

·       Pros and cons to hotel room service

CON:

o   Staff: Sometimes need to employ full-time crew and phone operator because 24 hours

o   Requires specialized knowledge regarding tray setup and the layout of the hotel

o   Takes added service time to transport food

o   In addition to breakfast, lunch and dinner, a selection of spirits, wines beers and hors d’oeuvres is integral to menu

PRO:

·       Room service can be prepared in coffee shop kitchen

·       Can rotate restaurant staff to fill room service positions

·       Hotels can charge up to 25% premium on food because of complexity of the service

·       Can put menu in the yellow pages to detract from guests ordering off-site

·       Profit margins of different elements of food and beverage (restaurants, conference centers, room service)

Banquet Center - 50%

Restaurant - 18% (I think!)

Improvement in hotel food quality has been attributed to what?

1.)   Restaurant performance is based on profitability (compared to restaurants in the area)

2.)   Elevated culinary training available for young chefs

3.)   Increased customers expectations (Americans expect no different tasteful cuisines when they travel)

PRACTICE PROBLEM: 

1.     A 550 room hotel sold 180 rooms last night.  What was their occupancy?

32.7

PRACTICE PROBLEM: A 550 hotel room sold 180 rooms last night, made $21,915 in room revenue and $30,000 in total revenue last night.  What was their ADR? 

121.75

39.85

 PRACTICE PROBLEM: A 550 hotel room sold 180 rooms last night, made $21,915 in room revenue and $30,000 in total revenue last night. 

 Last year the hotel had an ADR of $119.00 and ran at 42% occupancy on the same night.  How did they do this year compared to last?

RevPar $49.98 last year and $39.81 this year. Occupancy has decreased their year over last, but ADR has increased this year over last. Ultimately (based on RevPar) the hotel’s financial performance this year s worse than last year on the same night.

PRACTICE PROBLEM:   A 250 room hotel has 10 rooms out of order for maintenance.  They rented 195 rooms last night and made $36,172 in room revenue.  What was their RevPAR?

$150.72

PRACTICE PROBLEM: A 250 room hotel sold the following rooms this week Sunday – Saturday: 90, 220, 225, 158, 178, 200, 50.  What was their weekly occupancy?

64.1%

·       How does a hotel differentiate and/or sell its product?

•   ¨Generating business through sales calls and inquiries.
•   ¨Maintaining and building existing relationships with clientele.
• ¨Being able to determine the guests need and depict the hotel’s product or service as the one to satisfy that need.
•   Convention booking (setting aside a block)
• Telephone survey