Tutorialintroductiontorevenuemanagementforhotelshospitalityseminar Whatisrevenuemanagementinhotelindustrycourse 130416173952 Phpapp01 PDF

Introduction to
Hotel Revenue
Management
Earn More
by Selling the Same
Presented by Tomeu Pons

7 May 2013 | Miami Beach, FL
Introduction to Revenue Management
Presentation
The main objective of this seminar is to understand the purpose

of revenue management in both technological and commercial
terms.
With this information, a hotel can evaluate, develop and optimize

its pricing strategy with the goal of maximizing profits.
Hotel Revenue Management Seminar Miami Beach, FL - 7 May 2013 Presented by: Tomeu Pons tomeupons@gmail.com @tomeu_pons 2
Presentation
Professor: Tomeu Pons tomeupons@gmail.com
Collaborating Professor Turisme Sant Ignasi TSI, Fundaci

Fundacin ESADE
Tourism Education Manager Cibernarium, Barcelona Activa
Collaborating Professor University of Barcelona
Educated in Hospitality, Marketing, E-

E-commerce and IT Systems in
Escola Hoteler
Hotelera UIB, ESADE, La Salle URL and UPC
Chief Operating Office Flamingo Hotelier
Previously, Consultant ,Director of Marketing and CEO in companies

companies
such as The Perfect Hotels, Sercotel, Hotusa and SAP
Agenda
Definition
Price
Effects on a hotel
Distribution: direct and indirect
When it is used
Factors
Tactics
Calculating prices
Reporting, statistics and tools
Exercises
Glossary
Exam
Notes
Definition
Revenue Management is a commercial management technique

that helps us to sell the right product at the right moment at the
right price to the right client.
Wikipedia: http://en.wikipedia.org/wiki/Revenue_management
Why use RM?
Revenue Management is a strategy we can use in response to:
Increased competition
Increase in channels of distribution
Transparency in prices
Increase in special promotions and discounts
Decrease in expected response time to clients
80% of sales are influenced by online channels
Definition
Revenue Management is a method of managing sales of hotel

inventory by applying yield management techniques
Revenue Management:
Commercial management technique that helps us sell the right
product at the right moment at the right price to the right client
Yield:
The techniques, formulas and strategies hotels use to manage
inventory, price and sales policies to maximize revenue
generated from the sale of this inventory
Basic Elements of Revenue Management
Basic elements of Revenue Management used to manage inventory:
Historical data statistics, demand and trends

Forecasts
Price management tools
Overall strategy
Pricing policies
With the above, we can address:
Fixed and perishable inventory

Anticipated sales
Customer segmentation
Improve RevPAR and GopPAR
RevPAR
RevPAR
GopPAR
GopPAR
Increase
Increase
Increase
Increase your
your
occupancy
occupancy Rooms
Rooms
ADR
ADR
Maximize
Maximize
Revenue
Revenue
and
and profit
profit
Desired equilibrium in response to a changing market
Sell at Sell at
high prices low prices
The Customer
The customer is the most important factor in determining price.
Each client is different and has their own motivation:
Different motives
Different expectations
Willing to pay different prices
Interested in different products
To understand this environment we must segment the market,

and for each of these segments we must adapt:
Interested in different products

Pricing
Reservation terms
Marketing along the path-to-purchase
The Product
The product is another of the key factors.
What is it about our product that drives sales?

Hotel
Destination
Experience
Rooms
Services
Once we determine this, we can effectively develop our product:
Create additional room types?

Create a range of price points?
The Price
Although the price seems to be a lever we control, this is

completely false:
- Price is determined by demand

- Prices rise and prices fall
- High seasons and low seasons
- Years with low/no demand
- Channels with low/no demand
- Competition, local and international affects demand
However, there are techniques and factors that enable us to

increase prices.
The Moment of the Reservation
The moment of reservation is a key element in the management

of prices and quite often it isnt take seriously enough
Its an important moment for the customer just as much as it is

an important moment for the hotel. Both must work together in
the same way.
Many techniques exist for both players.

Forecasts based on historical data help us a great deal.
How it was born
Where it was born, how and what need it met
Where it was born, how and what need to it meet
These sales techniques were developed during the middle of the

20th century by American companies.
Once their information systems were computerized, they were

able to apply these methods effectively.
Companies could sell airplane tickets at different prices. They

realized that different clients, at different times, with different
motivations, were willing to pay different prices.
To be able to predict how much clients were willing to pay for a

ticket, they developed Yield techniques that allowed them to
fixed these prices. It was important for them to computerize and
collect information about supply and demand.
An example
Variability of industry pricing
Evolution of Tourism Pricing Management
History of Pricing
The total acceptance and integration of the Internet as a major

sales channel changed the way hotels price their inventory:
2003 Some Majors changed to dynamic pricing

2004 Fixed Consortia pricing disappeared
2005 Decrease number of Categories and continued change to
dynamic pricing
2006 Some corporate accounts are already dynamic
2007 BAR is implemented completely
Definition
Pricing
Techniques to determine prices are developed in the heart of

each company. Setting prices can vary depending on the strategy
of the company.
The main factors in setting prices are:
Production costs
Market
Competition
Demand
Product positioning
Pricing
Where do prices come from?

What are customers willing to pay?
Pricing
Techniques to set the prices of a good or a service
Setting of prices can focus on anything from cost of production to

consumer demand.
From the point-of-view of marketing, an efficient price is a price

that is close to the maximum price a consumer is willing to pay.
In economic terms, it is a price that transfers the most value

obtained by the consumer to the producer.
Pricing Where do prices come from?
In the mind of the consumer, they are comparing different

options (substitute products), taking into consideration their
budget and the benefits of the purchase (e.g. pleasure).
This determines, in their minds, the right price theyd pay.
For a company to increase profitability from sales, they must

know in each moment what is the approximate maximum price a
customer is willing to pay for the product or service.
To increase the consumers perceived value of our products and

services, we must take in to account factors such as product,
price, distribution and promotions.
Pricing An Efficient Price
The efficient price is the maximum consumers are willing to

pay. Prices are influenced by multiple factors
But they are only perceived as the right price for me or not
Now
Now that
that we
we understand
understand that
that prices
prices are
are factors
factors affected
affected by
by
multiple
multiple variables
variables and
and are
are only
only perceived
perceived as
as
the
the right
right price
price for
for me
me or
or not
not
We
We know
know wewe need
need to
to work
work with
with prices,
prices, adjust
adjust them
them and
and take
take
advantage
advantage of
of them
them so
so they
they are
are perceived
perceived as
as the
the right
right price
price for
for me
me
How prices were set and how prices are currently set
Without Yield Prices based upon cost
Cost of Desired
Cost of Production
Distribution Profit
$$ $$$ $$$$$ $$$$$
With Yield Prices based upon demand
Cost of Desired YIELD

Cost of Production
Distribution Profit Pr
$$ $$$ $$$$$ $$$$$$ $$$$$$$$$$$$$$$$$$$$
Real impact on hotels
A hotel has 200 rooms
If they apply RM for each of their rooms and each room

achieves an increase of 2, the impact on final results is
significant.
200 rooms x 2$ = 400$/day x 365 days = 146.000$

200 rooms x 3$ = 600$/day x 365 days = 219.000$
200 rooms x 5$ = 1000$/day x 365 days = 365.000$
1 Hotel x 100 rooms x 365 days =

36,500 rooms x 1/3 = 12,166 rooms
12,166 x 3 $ = 36,498 $
12,166 x 6 $ = 72,996 $
12,166 x 9 $ = 109,494 $
TOTAL ANNUAL INCREASE = 218,988 $
Pricing Mix
Price
N of Rooms
How clients agree to prices
Consumer Behavior
Hotel Revenue Management Seminar Miami Beach, FL 7 May 2013 Presented by: Tomeu Pons tomeupons@gmail.com 32
Fixed Pricing (static)
Booking Engine
Dynamic Pricing Actions
Distribution Direct or Indirect
Maintaining Indirect Distribution
Billboard Effect
Hotel Revenue Management Seminar Miami Beach, FL 7 May 2013 Presented by: Tomeu Pons tomeupons@gmail.com 38
Implementation
Definitions
Revenue Manager:
Revenue Management:
Yield Management:
Corporate Policy
When is it appropriate to apply Yield
To implement RM we need:
Fixed production of stock/products

Perishable product
Clear policy on dynamic pricing
Ability to update prices quickly
Reservations/sales occur within a time period
Ability to segment the market or groups of customers
To manage RM actions, the involvment of Management, Sales and Reservations

is required. Their must be a unified vision and mission, and agreed objectives.
Its necessary to collect information about demand: price paid, reservation dates,
dates of consumption, quantity of demand, events in the destination or origen
location, competitors prices, distributors
Main techniques
The main RM tools:
Availability management
Categories
Groups
Reservation terms
Auto-Allotment
CTA, Close-to-Arrival
MinLOS & MaxLOS
Upselling
Overbooking
How we set prices
The key point is to have the right price.
To determine the right price we take in to account:
Value of our product

Customers perceived value
Positioning
Competition
Management of Availability
The correct management of availability is one of the most

important points of good RM
Factors that affect availability include:
Reservation terms
Rates
Reservations not guaranteed
Pre-payments
Categories
Groups
Overbooking
Waiting lists
Peaks and valleys in planning
Types of Rates
All hotels offer a variety of rate types. The trend is to simplify

them into rate periods and apply to BAR discount periods.
With the current system we lose competitivity and have to work

more hours to organize our work.
Rate types:
Published rates on hotel website, Booking

Negotiated ECI, companies, groups
Packaged, Expedia
Opaque Atrapalo, Lastminute
Restricted cancellations, advanced payment, promotions
Price Matrix
RACK
RACK PREF
PREF BAR1
BAR1 BAR2
BAR2 BAR3
BAR3 BAR4
BAR4 BAR5
BAR5 BAR6
BAR6 WKD1
WKD1 WKD2
WKD2
Standard
Standard 200
200 160
160 140
140 120
120 110
110 100
100 90
90 80
80 70
70 60
60
Superior
Superior 215
215 175
175 155
155 135
135 125
125 115
115 105
105 95
95 85
85 75
75
Suite
Suite 230
230 190
190 170
170 150
150 140
140 130
130 120
120 110
110 100
100 90
90
Creation of numerous published rates that pass from one to the

other in function of the level of occupation and expected demand,
and we make if from the level of rates that we consider most
opportune.
What is the BAR Best Available Rate?
Price Matrix x Occupation
Demand Profile Nov - Mar Apr - Jun Jul - Oct
BAR BAR BAR

Occupation Rate Occupation Rate Occupation Rate
Rate Base Base Rate Base Rate
215 230 250

High Demand >75% 205 >85% 215 >95% 235
180 195 215
190 215 235

Moderate Demand 65% 175 75% 205 75% 225
165 180 200
190 190 210

Low Demand 55% 170 65% 175 65% 195
150 165 185
140 150 170

Very Low Demand <50% 110 >55% 130 >55% 150
75 115 135
Total Demand, Unconstrained Demand
The total demand of a room for a specified day. This figure is

independent of the physical capacity of the hotel.
For the total registered demand for a product, its useful to have
a system that permits on-request, including when all rooms are
already sold.
This demand will allow us to calculate the Last Room Value, or

how much somebody is willing to pay for the last room in our
inventory.
Segmentation of the Market/Consumers
Market segmentation is the study of consumers and what their

different motives may be for choosing our hotel.
This allows us to to create different segments or groups of

consumers according to their motives for the visit.
To know these motives we must be able to analyze ways to

increase the demand in each of these segments.
We also must know the segments of our competitors and the

destination in general to make comparisons.
In order to investigate the segmentation of the market and

consumers, we must collect data:
Duration of stay
Motive for the stay source and recipient
Motive to choose hotel
How long in advance did they book hotel
Revenue per room
Revenue per client
Distribution channel where booking was made
Price Elasticity
Price elasticity measures the effect changes in price have on

demand. Sometimes an increase in price causes a significant
decrease in the demand and in other instances only a slight
decrease.
Elastic Demand Inelastic Demand
High competition Low competition

Standard services Differentiated services
Example:
Demand Forecasting
Investigation based on a calendar that allows us to know the

demand that our product will have in the future.
The objective is to forecast the periods of low demand and

stimulate sales, as well as to know the periods of high demand in
which we can increase rates.
Use Google Calendar to collect all of the events that can

influence consumption. This tool is easy to use and available to
all of the team.
Demand Forecasting
Forecasting consists of the estimation and analysis of future

demand for a specific product or service using inputs such as
historic sales, marketing estimates and promotional information.
Price Waterhouse Coopers
Demand Forecasting
To be able to forecast, its necessary to know historic consumption

data, referring to:
Consumption weekdays
Consumption during events: conferences, festivals
Consumption during vacations
Clients Business or Leisure
Changes in demand
It can be easy to make a forecast. If you can, also make a

forecast about your competitors and about the destination.
This document will allow you to know the number of arrivals and
departures, occupation by room and possibly revenue from other
non-room sources.
Its a great tool to define internal objectives.
Objective of Forecasting
Why do we make forecasts?
Measure demand
Forsee falls in demand
React to low demand
Define commercial strategy
Apply rates
Restrict sales
Control costs
Control commissions
Financial planning
Human Resources planning
Forecasting: Behavior Patterns of Reservations
Booking Pace
The booking pace must be monitized for the current day and
future days to ensure alignment with the forecast and to be able
to react to any deviations from the forecast that occur.
DailyPick-up
The daily pick-up, and the ability to follow the rhythym of
reservations must distinguish individuals and groups.
Pick-Up
The pick-up is the figure that tells us today how many confirmed
reservations we have for a specific day.
This figure shows us in a detailed way, by day or room type, the
% already sold.
This figure allows us to guide our decisions to increase or

maintain rates for a specific day and what we must already apply
today.
The ideal is to be able to analyze and act daily, in all distribution

channels, with this information.
Pick-Up
Difference in the number of reservations between one date and another.

Example: Reservations made yesterday for the month of June.
Forecasting Elements
To record:
Objectives reached vs. objectives set

Reservations on the books
Pick-up realized vs. expected pick-up
Expected segments
Average rate
Total revenue
We should forecast:
Once per week for the next 4 weeks

Once per month for the next 3 months
Once per month every 3 months for the whole year
Once per year for the next year
Demand Curve vs. Advanced Reservation
Individuals
Companies
FIT
Groups
-60 -30 -15 -5 Days before arrival
Demand Curve
Groups
We should take note of all Group requests in our statistics, so we

can evaluate profitability and apply RM to group pricing.
Provider
Type of contract
Revenue per room
Revenue per guest
Revenue per group
Group sub-segments
Purpose of the visit
number of and motive for cancellations
Demand Curve
Tour Operators
Tour operator contracts are the most difficult to apply RM to

since the system of prices and sales is already fairly static.
Technically, it is a segment not yieldable.
Hotels should insist the tour operators agree to dynamic

prices, but these companies and their packages business
model make it very difficult commercially to use dynamic
pricing methods.
From the analysis of these contracts we can reason that there

are months hotels benefit from them and months where sales
opportunities are lost due to them.
Shoulder Days
What is the impact of closing sales for a specific day?

The impact of closing sales of a room type for specified dates
could be larger than what we believe.
The Shoulder days are the days of closed stays that imply
a reservation. In other words, the 2 or 3 days the client would
have stayed in the hotel.
This statistic helps us to calculate the impact on revenue

when a room type isnt available.
Some segments like groups and tour operators can produce a
large number of shoulder days.
What actions should we take?
Tactics How to act during high demand
High Demand
Close or restrict discounts

Apply a minimum of nights, but with caution
Reduce groups and shoulder days
Reduce late check out, and in moderation, if possible, late check in
Increase guarantees and cancellation charges
Increase rates in accordance with those the competition
Increase the cost of packages and hotel services
Apply the full cost of suits and executive rooms
Select dates that are closed to arrivals
Evaluate the total profit of the hotel and try to increase it
Invoice for all of the nights in case the client shortens their stay
Tactics How to act during low demand
Low demand:
Sell added value and special benefits

Offer packages including internal and external products
Dont close sales of the cheapest category of rooms
Incentivize upgrades
Offer better prices at adjusted budgets
Dont use stay restrictions
Motivate hotel staff to be especially attentive
Monitor competitors actions
Lower prices
Consistency
Consistency in applying prices
Its very important to be consistent with our product, services

and the value we offer.
We must align our value, price and quality, in order to not

disappoint our customers.
Tactics Four Revenue Management
Principal points to remember:
Questions
When should we reject a sale?
Is it useful to know how much customers spend?
When should we offer a discount?
When should we use overbooking?
How do we measure our Factor Yield / RM
Room Revenue
o
Average Rate x Occupation
Revenue per Available Room
RevPAR
Number of Rooms Available
How do we measure our Factor Yield / RM
Total Revenue
TRevPAr Total Revenue per Available Room
Rooms Available
Gross Operating Profit GOP

GOPPar
Gross Operational Profit per Available Room
Rooms Available
Elements of Analysis
We have three levels of analysis: daily, monthly and yearly
Daily:
Average occupation
Average rate
Rev PAR
Pick-Up
Monthly:
Geographic origin, GOB
Length-of-stay, LOS
Lead Time
Channel
Commissions
Always:
Profitability of each type of guest
Benchmarking
Benchmarketing is the study of the competition to discover how

they sell, at what price and what their occupancy is. The objective
is to discover how we can improve and act upon this with
distributors, guestsTo be able to improve our commercialization.
At a minimum, benchmarking should give us information on:
Prices
Room type
Products
Packages
Channels of distribution
Occupation
Services offered
Benchmarking
My Hotel vs. My Competitors

Who manages their hotel better, Manager A or Manager B?
Daily Prices
To manage our prices taking into account the prices our

competition is selling at, is one of the best tools to help us sell
smarter. From them we can make a number of conclusions.
There are a number of ways to obtain this information.
The questions we seek to answer include:
What is their strategy?

Do they use yield?
What occupation do they have?
Can it affect our sales?
What would be their future prices?
Do they require minimum stay (L.O.S.)?
Place your hotel: market vs. your value
All of the commercial policies and prices of your establishment

must be consistent with your product and values.
Aligning price, services and product will ensure you have an

excellent perceived value for money and that demand is more
loyal and sustained.
Monitor your competitors in terms of their products and

associated perceived value. After, compare your hotel to theirs
and adjust your offering to be more competitive and more
productive.
Place your hotel: market vs. your value
Evaluate your hotel and your competitors:
Product room type

Product hotel services
Price
Channels of distribution
Location
Strengths and weaknesses
Client segments of the hotel
Their presence in other markets
What hotels have similar prices
You can also study the market for your destination, as well as
source markets.
Place your hotel: market vs. your value - SWOT
Strengths Weaknesses
My Hotel
My Environment
Threats Opportunities
Market Share Report
This study helps us to understand our results compared to our

competitors, especially in regards to the average price and
occupation.
The parameters are:
MPI. Market Penetration Index

market penetration rate vs. the average occupation of our
competitors
ARI. Average Rate Index

average price index, our average price vs. our competitors
RGI. Revenue Generator Index

revenue generator index, our share of revenue vs. our
competitors
Distributors
Our presence with distributors is key. We can consult them at

any time for competitive data and we can observe the positions
they occupy in search engine results.
We can observe how they sell use of photography, text,

reference to locations, positioning of product.
Very good presence with distributors can help our product

compete with superior hotels (in this case wed be competitive
on price) and with similar hotels (in this case wed be the
better option).
How to be present. Distributors and the exponential effect.
Is it really the same hotel? Where will customers book it?

The hotels website is not the best option to book it in this case.
Many published rates and many products
An establishment should have however many rates they believe

to be opportune. All rates should be competitive depending upon
the moment they are applied.
Attention to the offers and closed prices and/or flat-rates offered

to companies and agencies.
If the latter act with a discount code, we must always reference

these exceptions and offers.
All products should always be offered and done so with the

largest number of distributors possible.
Pricing Matrix
RACK
RACK PREF
PREF BAR1
BAR1 BAR2
BAR2 BAR3
BAR3 BAR4
BAR4 BAR5
BAR5 BAR6
BAR6 WKD1
WKD1 WKD2
WKD2
Standard
Standard 200
200 160
160 140
140 120
120 110
110 100
100 90
90 80
80 70
70 60
60
Superior
Superior 215
215 175
175 155
155 135
135 125
125 115
115 105
105 95
95 85
85 75
75
Suite
Suite 230
230 190
190 170
170 150
150 140
140 130
130 120
120 110
110 100
100 90
90
Optimize your supplementary products
Clients for the most part consume on impulse. A direct call to

make a reservation sometimes lasts only a few minutes, as can
the online process, so we must always present ourselves in the
most desirable fashion.
Different room types meet different needs of different segments.

Why dont we offer them all?
In the descriptions suggested use/benefits are given. Create

clear differences between the room categories. Stimulate the
thought a little more per night you can enjoy
Upselling
Upselling is another tool that helps us to achieve good results

from RM.
Two moments when it can be applied:

Moment reservation is made
Arrival at hotel
Offer what the client needs in a direct way for a little more
money.
We must:
Understand the client
Observe their needs
Propose options
Communicate the benefits
Price Parity
Although price parity is a model criticized by some, others

defend it.
In spite of not being logically sound financially, its use has

spread and has been accepted by all OTAs.
Internally, the differences between the reprecussion of the

commissions that are considered as costs of promotion or
sales; are compensated some OTAs with others.
In the case of not having parity, clients will buy in mass, the
cheapest OTAs. Although this would be more effective,
having one OTAs dominating almost all sales would be
dangerous.
Commercial Parity
Commercial parity is based on the commercial parameters that

can influence the clients purchase
Its important to have commercial parity with our distributors

because they otherwise could have advantages over our own
channel.
Payment conditions
Reservation conditions
Cancellation charges
Advance notice of cancellation required
Cleaning charges
Hidden offers

Control Price Parity
Controlling price parity is very important and affects our

relationship with our clients and distributors.
Technological tools exist to compare prices for our own hotel:
know who we work with

know who are our distributors
know the mark-up on our product
understand the distributors model: retail, merchant, opaque...
Parity Disruptors
Some companies willingly perform actions to cause Parity

Disruption.
Break the parity of your hotel to get benefits from it, decreasing
your margin so clients choose your property.
In other instances, data is aggregated from different channels to

show which has the lower prices.
Normally, these companies dont have direct contracts with the
hotel and use price comparison to attract clients.
If its necessary, make reservations in each channel to get the

voucher and know which agency is selling your property in this
way.
Overbooking
Overbooking isnt an effect or a consequence.

In RM, it is a tool that allows us to get the most play out of our
hotels availability.
On many occasions, the no-shows, last minute cancellations and

shortened stays, affect our profitability.
Its recommended to have an action plan for these occasions.
We need to think about how these deviations will impact:

costs of stay, costs of transportation, compensation for services
or monetary, and possibly sanctions.
Overbooking
Calculate your level of Overbooking and evaluate risk vs. Profit
Not Guaranteed
Reservations Received > Cancellations > Arrivals
No Shows
Rates we charge
Transfer Expenses
Parameters to measure efficacy
REVPAR: Room Revenue per Available Room
TREVPAR: Total Revenue per Available Room
TREVPEC: Total Revenue per Client
GOPPAR: Gross Operating Profit per Available Rooms
REVPAM: Conference/
Conference/Banqueting Revenue per Available M2
REVPASH: F&B Revenue per Available seats and hour
When we obtain more by applying RM
Where to obtain more by applying RM
How much youve obtained by applying RM
Practice: How to determine our prices
Pricing Matrix
Pricing Matrix General
RACK
RACK PREF
PREF BAR1
BAR1 BAR2
BAR2 BAR3
BAR3 BAR4
BAR4 BAR5
BAR5 BAR6
BAR6 WKD1
WKD1 WKD2
WKD2
Standard
Standard 200
200 160
160 140
140 120
120 110
110 100
100 90
90 80
80 70
70 60
60
Superior
Superior 215
215 175
175 155
155 135
135 125
125 115
115 105
105 95
95 85
85 75
75
Suite
Suite 230
230 190
190 170
170 150
150 140
140 130
130 120
120 110
110 100
100 90
90
Pricing Matrix
Pricing Matrix Very Low Season

100% 75% 50% 25% 99% 66% 33%
RACK
RACK PREF
PREF BAR1
BAR1 BAR2
BAR2 BAR3
BAR3 BAR4
BAR4 BAR5
BAR5 BAR6
BAR6 WKD1
WKD1 WKD2
WKD2
Standard
Standard 200
200 160
160 140
140 120
120 110
110 100
100 90
90 80
80 70
70 60
60
Superior
Superior 215
215 175
175 155
155 135
135 125
125 115
115 105
105 95
95 85
85 75
75
Suite
Suite 230
230 190
190 170
170 150
150 140
140 130
130 120
120 110
110 100
100 90
90
Pricing Matrix
Pricing Matrix Low Season

100% 75% 50% 25%
RACK
RACK PREF
PREF BAR1
BAR1 BAR2
BAR2 BAR3
BAR3 BAR4
BAR4 BAR5
BAR5 BAR6
BAR6 WKD1
WKD1 WKD2
WKD2
Standard
Standard 200
200 160
160 140
140 120
120 110
110 100
100 90
90 80
80 70
70 60
60
Superior
Superior 215
215 175
175 155
155 135
135 125
125 115
115 105
105 95
95 85
85 75
75
Suite
Suite 230
230 190
190 170
170 150
150 140
140 130
130 120
120 110
110 100
100 90
90
Pricing Matrix
Pricing Matrix Mid-Season

99% 66% 33%
RACK
RACK PREF
PREF BAR1
BAR1 BAR2
BAR2 BAR3
BAR3 BAR4
BAR4 BAR5
BAR5 BAR6
BAR6 WKD1
WKD1 WKD2
WKD2
Standard
Standard 200
200 160
160 140
140 120
120 110
110 100
100 90
90 80
80 70
70 60
60
Superior
Superior 215
215 175
175 155
155 135
135 125
125 115
115 105
105 95
95 85
85 75
75
Suite
Suite 230
230 190
190 170
170 150
150 140
140 130
130 120
120 110
110 100
100 90
90
Pricing Matrix
Pricing Matrix Mid-to-High Season

100% 75% 50% 25%
RACK
RACK PREF
PREF BAR1
BAR1 BAR2
BAR2 BAR3
BAR3 BAR4
BAR4 BAR5
BAR5 BAR6
BAR6 WKD1
WKD1 WKD2
WKD2
Standard
Standard 200
200 160
160 140
140 120
120 110
110 100
100 90
90 80
80 70
70 60
60
Superior
Superior 215
215 175
175 155
155 135
135 125
125 115
115 105
105 95
95 85
85 75
75
Suite
Suite 230
230 190
190 170
170 150
150 140
140 130
130 120
120 110
110 100
100 90
90
Pricing Matrix
Pricing Matrix High Season

100% 75% 50% 25%
RACK
RACK PREF
PREF BAR1
BAR1 BAR2
BAR2 BAR3
BAR3 BAR4
BAR4 BAR5
BAR5 BAR6
BAR6 WKD1
WKD1 WKD2
WKD2
Standard
Standard 200
200 160
160 140
140 120
120 110
110 100
100 90
90 80
80 70
70 60
60
Superior
Superior 215
215 175
175 155
155 135
135 125
125 115
115 105
105 95
95 85
85 75
75
Suite
Suite 230
230 190
190 170
170 150
150 140
140 130
130 120
120 110
110 100
100 90
90
Dynamic Pricing
Advantages of Dynamic pricing:
Eliminate discounts in periods of high demand
Reduce availability of rooms for groups
Increase discounts in periods of low demand
Establish Special Events rates or for periods of

extraordinary high demand
Revenue Algorhythm
Revenue from automatic application functions with an

algorhythm of revenue included in the PMS or CRS.
Calculation based on: room type, bands of prices allowed, %

occupation or level of actual sales.
Must exclude some reservations from the system so they are not
figured into the the base calculation of revenue. By human or
automatic calculation.
System can become more sophisticated with algorhythms or

artificial intelligence by combining: historic data, competitive
data, booking window, pick-up, customer searchs in the
reservation booking engine calendar.
Some companies use cookies and add web tracking data as well.
Revenue Algorhythm Example
1 hotel with 500 rooms

5 room types
150 rooms are doubles
Sales from 1 May 2020: 22% = 33 rooms
Price range: 116$ - 148$
Difference: 32$
Mid-High Season. Rate change every 20% change in occupation.
Rate change in increases of 6.40$
Prices
Prices on
on display:
display:
1.
1. 0%0% 116.0
116.0 $$
2.
2. 20%
20% 122.4
122.4 $$
3.
3. 40%
40% 128.8
128.8 $$
4.
4. 60%
60% 135.2
135.2 $$
5.
5. 80%
80% 141.6
141.6 $$
al
al 100%
100% 148.0
148.0 $$
Revenue Algorhythm Example
We can create an algorhythm for our PMS or CRS, or implement

new, easy-to-use RM tools.
Numerical Algorithms Group - Industries
Day-to-Day Tools
Remember: Basic Elements of RM
Basic elements of RM are:
Historic information statistics, demand and trends

Forecasting
System tools to manage prices
Overall strategy
RM pricing policy
With them, we act upon:
Fixed and perishable inventory

Anticipated sales
Opportunity to segment customers
Strategy and Rates
With a simplified rate structure, we increase the ability to sell and

provide clarity to customers to make their purchase decision easier.
RATE STRUCTURE COMPLEMENTARY

PRODUCTS & SERVICES
Double Room 200,50 $
Airport Transfer 60 $
Superior Room 350,50 $
Breakfast Buffet 18 $
Executive Room 510,50 $
Flowers 23 $
Junior Suite 620,50 $
Suite 862,50 $
Benchmarking & Compset
Competitive analysis shouldnt be the only factor used to develop your

strategy, but it is a key component.
We can share our results anonymously in order to compare our results

with those competitors hotels who also share their data anonymously.
This study helps us understand our results in comparison with our

compset.
Historic Data
Different reports that will help us analyze the past by

segments, monthly day-to-day, competition, etc.
Last Year Totals On the Books On the Books last week Pick Up
IND. GRP. IND. GRP. IND. GRP. IND. GRP.
DATE LCR LGS IND. LEIS GRP. LEIS OTH Total LCR LGS IND. LEIS GRP. LEIS OTH Total LCR LGS IND. LEIS LEIS. GRP OTH Total LCR LGS IND. LEIS LEIS. GRP OTH Total
CORP CORP CORP CORP CORP CORP CORP CORP
01-nov WED 28 32 12 1 59 0 2 134 93 48 69 15 61 0 0 286 73 38 65 13 39 0 0 228 20 10 4 2 22 0 0 58

02-nov THU 31 32 20 1 84 0 1 169 78 47 49 17 57 0 0 248 50 37 45 15 32 0 0 179 28 10 4 2 25 0 0 69
03-nov FRI 51 32 34 1 114 0 4 236 67 48 30 20 38 0 1 204 41 38 34 16 28 0 1 158 26 10 -4 4 10 0 0 46
04-nov SAT 86 32 68 2 118 0 3 309 83 46 40 25 25 0 0 219 58 37 37 22 15 0 0 169 25 9 3 3 10 0 0 50
05-nov SUN 81 33 33 4 122 0 1 274 103 46 37 33 22 0 0 241 73 37 31 24 14 0 0 179 30 9 6 9 8 0 0 62
06-nov MON 84 34 29 13 107 0 1 268 117 45 51 49 28 0 0 290 86 36 35 43 18 0 0 218 31 9 16 6 10 0 0 72
07-nov TUE 101 35 34 28 95 0 1 294 107 45 51 49 26 0 0 278 79 36 35 32 17 0 0 199 28 9 16 17 9 0 0 79
08-nov WED 106 35 35 33 92 0 1 302 95 45 41 38 31 0 0 250 60 36 32 9 19 0 0 156 35 9 9 29 12 0 0 94
09-nov THU 108 35 39 43 94 0 1 320 66 45 31 27 36 15 0 220 38 36 22 2 20 15 0 133 28 9 9 25 16 0 0 87
10-nov FRI 85 34 43 58 87 0 2 309 40 44 36 21 50 15 0 206 23 35 23 4 34 15 0 134 17 9 13 17 16 0 0 72
11-nov SAT 70 34 24 125 62 0 1 316 51 43 29 46 40 0 0 209 36 34 19 43 29 0 0 161 15 9 10 3 11 0 0 48
12-nov SUN 71 35 28 125 54 0 1 314 64 42 27 49 31 0 0 213 49 33 14 43 24 0 0 163 15 9 13 6 7 0 0 50
13-nov MON 67 35 41 72 64 0 1 280 76 42 30 52 27 0 0 227 59 33 15 43 20 0 0 170 17 9 15 9 7 0 0 57
14-nov TUE 62 37 51 77 68 0 1 296 76 41 34 57 24 0 0 232 56 32 18 52 16 0 0 174 20 9 16 5 8 0 0 58
15-nov WED 55 36 54 81 88 0 1 315 65 38 42 16 24 0 0 185 41 30 28 11 16 0 0 126 24 8 14 5 8 0 0 59
16-nov THU 40 36 57 60 103 0 1 297 58 37 40 17 24 0 0 176 42 29 32 12 14 0 0 129 16 8 8 5 10 0 0 47
17-nov FRI 44 37 80 39 87 0 1 288 59 37 52 41 67 0 0 256 50 29 44 36 59 0 0 218 9 8 8 5 8 0 0 38
18-nov SAT 44 37 89 23 91 0 1 285 49 36 53 75 85 0 0 298 42 28 45 76 71 0 0 262 7 8 8 -1 14 0 0 36
19-nov SUN 50 36 104 19 75 0 1 285 59 38 58 75 95 0 0 325 56 28 49 76 82 0 0 291 3 10 9 -1 13 0 0 34
20-nov MON 54 35 100 20 74 10 1 294 65 37 61 73 98 0 0 334 60 27 49 74 86 0 0 296 5 10 12 -1 12 0 0 38
21-nov TUE 53 35 99 20 68 10 1 286 64 38 55 70 81 0 0 308 63 28 44 72 71 0 0 278 1 10 11 -2 10 0 0 30
22-nov WED 60 35 94 17 65 10 1 282 26 38 41 7 56 0 0 168 22 28 33 7 49 0 0 139 4 10 8 0 7 0 0 29
23-nov THU 52 36 76 14 58 0 1 237 32 38 18 2 30 0 0 120 33 28 11 2 23 0 0 97 -1 10 7 0 7 0 0 23
24-nov FRI 42 37 56 14 48 0 1 198 22 38 9 2 21 0 0 92 19 28 5 2 15 0 0 69 3 10 4 0 6 0 0 23
25-nov SAT 31 36 29 73 48 0 1 218 31 38 13 0 25 0 0 107 21 28 5 40 20 0 0 114 10 10 8 -40 5 0 0 -7
26-nov SUN 48 36 29 60 65 0 1 239 43 36 31 1 23 0 0 134 32 27 14 41 20 0 0 134 11 9 17 -40 3 0 0 0
27-nov MON 53 36 33 43 82 0 1 248 51 36 36 1 25 0 0 149 40 27 19 90 22 0 0 198 11 9 17 -89 3 0 0 -49
28-nov TUE 58 37 33 30 90 0 1 249 38 36 24 1 19 0 0 118 31 27 13 50 15 0 0 136 7 9 11 -49 4 0 0 -18
29-nov WED 48 37 45 20 110 0 2 262 28 36 27 1 17 0 0 109 28 27 15 1 12 0 0 83 0 9 12 0 5 0 0 26
30-nov THU 49 34 61 10 123 0 2 279 30 34 24 0 11 0 0 99 30 25 16 0 5 0 0 76 0 9 8 0 6 0 0 23
Total 1812 1051 1530 1126 2495 30 39 8083 1836 1218 1139 880 1197 30 1 6301 1391 942 847 951 905 30 1 5067 445 276 292 -71 292 0 0 1234
Occupancy 22,42% 13,00% 18,93% 13,93% 30,87% 0,37% 0,48% 83,94% 29,14% 19,33% 18,08% 13,97% 19,00% 0,48% 0,02% 65,43% 27,45% 18,59% 16,72% 18,77% 17,86% 0,59% 0,02% 52,62% 12,81%
Room Revenue 8.633.064 6.401.220 5.031.018 1.370.202
ARR 1.068,05 1.015,91 992,90 23,01
RevPAR 896,48 664,72 522,43 142,28
400 325 334 308

286 290 278 298
248 241 250 227 232 256
300 204 219 220 206 209 213 185 176 168
200 120 134 149
92 107 118 109 99
100
0
01-nov 02-nov 03-nov 04-nov 05-nov 06-nov 07-nov 08-nov 09-nov 10-nov 11-nov 12-nov 13-nov 14-nov 15-nov 16-nov 17-nov 18-nov 19-nov 20-nov 21-nov 22-nov 23-nov 24-nov 25-nov 26-nov 27-nov 28-nov 29-nov 30-nov
Historic Data
Exchange of competitive data
Historic Data
Detailed market segmentation analysis and origins:
Segmentos
Historic Data
Effectively analyze and manage booking trend

Pick Up Analysis 2005 vs 2006 (Total)
ene-05 ene-06 feb-05 feb-06 mar-05 mar-06 abr-05 abr-06 may-05 may-06 jun-05 jun-06 jul-05 jul-06 ago-05 ago-06 sep-05 sep-06 oct-05 oct-06 nov-05 nov-06 dic-05 dic-06
Occ. 90 days out 25,35% 22,48% 31,39% 15,94% 28,03% 14,36% 14,42% 5,63% 20,66% 8,00% 19,49% 3,54% 15,11% 2,46% 5,65% 8,97% 12,73% 7,93% 7,19% 10,62% 16,55% 14,94% 12,27% 8,98%
Occ. 60 days out 35,05% 31,31% 46,58% 22,30% 10,52% 20,25% 24,62% 11,00% 34,62% 10,52% 22,77% 6,03% 9,02% 12,27% 8,57% 10,71% 20,76% 12,07% 8,58% 12,87% 29,06% 25,23% 18,82% 22,95%
Occ. 30 days out 74,45% 49,49% 79,24% 59,40% 59,52% 35,81% 57,63% 32,61% 50,27% 31,44% 36,13% 34,02% 26,76% 27,96% 26,90% 28,22% 42,62% 34,64% 21,20% 29,89% 62,52% 64,43% 42,15%
Pick up 1st Week 6,21% 1,72% 3,50% 8,86% 11,29% 12,88% 7,40% 14,43% 5,72% 12,06% 6,53% 7,92% 10,25% 9,41% 9,05% 13,94% 9,21% 15,02% 6,68% 8,73% 8,89% 11,98%
Pick up 2nd Week 3,20% 4,14% 8,74% 8,73% 10,05% 15,85% 11,03% 12,15% 12,24% 7,83% 12,23% 9,58% 13,29% 8,16% 12,31% 12,72% 10,23% 15,12% 6,64% 9,12% 6,31% 9,23%
Pick Up 3rd Week 2,31% 6,48% 11,59% 7,33% 5,70% 11,59% 7,10% 10,56% 6,47% 3,70% 7,81% 6,47% 6,48% 5,43% 9,56% 9,23% 7,29% 4,05% 5,04% 8,60% 2,04% 6,46%
Pick Up Final Week 2,79% 4,67% 8,51% 2,46% 3,70% 8,51% 2,04% 5,08% 6,67% 6,40% 6,49% 5,71% 6,12% 7,06% 8,65% 10,69% 7,60% 3,59% 2,79% 2,28% 4,74% 1,97%
Final Occupancy 88,97% 66,50% 81,72% 86,78% 90,25% 81,72% 85,20% 74,83% 81,37% 61,43% 69,19% 63,72% 62,90% 58,01% 66,48% 74,80% 76,95% 72,42% 42,37% 58,62% 84,50% 71,78%
Occupancy Pace Report - 90 Days Out Occupancy Pace Report - 60 Days Out
2006 2005 2006 2005
40,00% 50,00%
30,00% 40,00%
30,00%
20,00%
20,00%
10,00% 10,00%
0,00% 0,00%
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
Occupancy Pace Report - 30 Days Out Occupancy Pace Report - EOM Figures
2006 2005 2006 2005
100,00% 100,00%
80,00% 80,00%
60,00% 60,00%
40,00% 40,00%
20,00% 20,00%
0,00% 0,00%
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
Historic Data
Detailed study, day-to-day, for each season, taking into account

the impact of events, festivals and vacation periods on the city
and hotel.
Daily Room Occupancy- Total
71,11% 77,88% 72,90%

64,88% 62,18% 59,03%
53,77%
Mon Tue Wed Thu Fri Sat Sun
Rooms Occupied - Ind. Corp Rooms Occupied - Ind. Leis
67 77 71 42
54 60 53 41
47 41 41
40 40 40
Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Sun
Rooms Occupied - Grp. Corp Rooms Occupied - Grp. Leis
38 38 40 41 46 44 44
32 32 40 40
20 24 21
Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Sun
Rooms Occupied - Industry
43 43 45 46 44
38 32
Mon Tue Wed Thu Fri Sat Sun
Historic Data
Know our top producers with precision
Forecasting
How to develop a good forecasting procedure?

Rigorously control daily, weekly and monthly pick-up data
BUSINESS-ON-THE-BOOKS
GRP
DATE BAR Guideline IND LEISURE IND CORP. GRP CORP. OTHER RMS % ADR REV
LEISURE
1.601 24,71% 7.239 11.590.426
01-oct jue BAR 1 60 0 0 0 4 64 30,62% 6.993 447.571
02-oct vie RACK 70 0 0 0 2 72 34,45% 8.881 639.454
03-oct sb RACK 68 0 0 0 3 71 33,97% 8.832 627.091
WEEK 1 198 0 0 0 9 207 33,01% 8.281 1.714.117
04-oct dom BAR 1 51 0 0 0 7 58 27,75% 7.071 410.091
05-oct lun BAR 1 26 0 0 0 12 38 18,18% 8.093 307.545
06-oct mar BAR 1 33 0 1 0 16 50 23,92% 5.567 278.364
07-oct mi BAR 1 41 0 0 0 13 54 25,84% 5.889 318.000
08-oct jue BAR 1 41 0 0 0 FORECAST 10 51 24,40% 5.376 274.182
09-oct vie RACK 68 0 0 0 1 69 33,01% 8.199 P/UP
565.728
AVG P/UP
10-oct sb RACK 81 0 0 REVPAR 0 RMS 1% ADR
82 REV
39,23% REVPAR
8.384 687.454
RNTS %
WEEK 2 341 0 1 1.789 0 60 402 27,48% 7.068 2.841.363
11-oct dom BAR 1 82 0 0 2.141 0 64 30,62%
0 6.993
82 447.571
39,23% 2.141
8.414 - 0,00%
689.909
3.060 72 34,45% 8.881 639.454 3.060 - 0,00%
12-oct lun BAR 1 59 0 0 3.000 0 71 0
33,97% 59
8.832 28,23%
627.091 7.782
3.000 - 459.127
0,00%
13-oct mar BAR 1 43 0 0 2.734 0 207 4
33,01% 47
8.281 22,49%
1.714.117 6.210
2.734 - 291.863
0,00%
14-oct mi BAR 1 45 0 0 1.962 0 58 5
27,75% 50
7.071 23,92%
410.091 5.435
1.962 - 271.728
0,00%
15-oct jue BAR 1 58 0 0 1.472 0 38 18,18%
5 8.093
63 307.545
30,14% 1.472
6.375 - 0,00%
401.637
1.332 50 23,92% 5.567 278.364 1.332 - 0,00%
16-oct vie RACK 71 0 3 1.522 0 54
6
25,84%
80
5.889
38,28%
318.000
7.253
1.522 -
580.273
0,00%
17-oct sb RACK 76 0 5 1.312 0 51 4
24,40% 85
5.376 40,67%
274.182 8.597
1.312 - 730.727
0,00%
2.707 69 33,01% 8.199 565.728 2.707 - 0,00%
WEEK 3 434 0 8 0 24 466 31,85% 7.350 3.425.265
3.289 82 39,23% 8.384 687.454 3.289 - 0,00%
1.942 402 27,48% 7.068 2.841.363 1.942 - 0,00%
3.301 82 39,23% 8.414 689.909 3.301 - 0,00%
2.197 59 28,23% 7.782 459.127 2.197 - 0,00%
1.396 47 22,49% 6.210 291.863 1.396 - 0,00%
1.300 50 23,92% 5.435 271.728 1.300 - 0,00%
1.922 63 30,14% 6.375 401.637 1.922 - 0,00%
2.776 80 38,28% 7.253 580.273 2.776 - 0,00%
3.496 85 40,67% 8.597 730.727 3.496 - 0,00%
2.341 466 31,85% 7.350 3.425.265 2.341 - 0,00%
Forecasting
Competitive Study: my hotel vs. my competitors
2008
ADR
Apr M ay Ju n Ju l Au g Sep O ct No v Dec
My Property 284,10 268,93 268,90 222,10 179,60 230,75 238,72 222,16 203 ,48
SubMarket Class 243,75 246,95 244,40 217,35 186,72 211,18 204,09 180,78 161 ,84
Index 116,6 108,9 110,0 102,2 96,2 109,3 117,0 122,9 125,7
% C hg
My Property 13,8 -2,3 -10,9 2,0 -2,6 -15,6 -3,2 -4,6 -3,1
SubMarket Class 9,7 -2,8 -5,7 3,5 0,5 -7,2 -8,7 -12,1 -5,8
Index 3,7 0,6 -5,5 -1,4 -3,1 -9,0 6,0 8,6 2,8
2008
RevPAR
Apr M ay Ju n Ju l Au g Sep O ct No v Dec
My Property 211,84 210,15 204,26 184,72 140,30 159,09 172,21 140,45 96,23
SubMarket Class 180,10 187,61 179,93 167,68 136,98 145,83 137,30 100,48 69,23
Index 117,6 112,0 113,5 110,2 102,4 109,1 125,4 139,8 139,0
% C hg
My Property -3,8 -13,1 -24,1 -3,7 -8,4 -28,7 -13,5 -22,4 -14,3
SubMarket Class 5,4 -8,1 -17,6 5,6 1,2 -19,3 -21,5 -35,9 -17,3
Index -8,6 -5,4 -7,9 -8,8 -9,5 -11,7 10,2 21,1 3,7
Forecasting
PACE TREND
how reservation trends are consolidated for a specific date
ES Week of Week of Week of Week of Week of Week of
Market Penetration - Revenue 29-nov Rank 06-dic Rank 13-dic Rank 20-dic Rank 27-dic Rank 03-ene Rank
Current Subscriber 122% 4 of 7 54% 6 of 7 171% 2 of 7 213% 2 of 7 236% 2 of 7 228% 2 of 7
A 1 Week Ago Subscriber 119% 4 of 7 50% 5 of 7 209% 2 of 7 201% 2 of 7 236% 1 of 7 204% 2 of 7
L 2 Weeks Ago Subscriber 129% 3 of 7 49% 5 of 7 268% 1 of 7 224% 2 of 7 222% 1 of 7 151% 2 of 7
L 3 Weeks Ago Subscriber 148% 2 of 7 66% 4 of 7 255% 1 of 7 164% 2 of 7 206% 2 of 7 128% 4 of 7
4 Weeks Ago Subscriber 195% 2 of 7 78% 4 of 7 328% 1 of 7 167% 2 of 7 240% 1 of 7 196% 2 of 7
Green: High Market Penetration (greater than 100%) Red: Low Market Penetration (less than 100%)
Average Daily Rate (USD) 29-nov Rank 06-dic Rank 13-dic Rank 20-dic Rank 27-dic Rank 03-ene Rank
Current Subscriber 367 3 of 7 365 3 of 7 362 3 of 7 334 2 of 7 418 3 of 7 293 4 of 7
Competitive Set 340 286 290 328 398 344
1 Week Ago Subscriber 363 4 of 7 420 2 of 7 362 4 of 7 334 2 of 7 418 4 of 7 293 5 of 7
A Competitive Set 343 289 324 331 405 323
Subscriber 359 4 of 7 329 3 of 7 362 3 of 7 339 2 of 7 440 4 of 7 305 4 of 7
L 2 Weeks Ago
Competitive Set 327 279 298 304 380 279
L
3 Weeks Ago Subscriber 359 3 of 7 329 3 of 7 374 2 of 7 363 2 of 7 402 4 of 7 298 4 of 7
Competitive Set 323 284 286 307 376 277
Competitive Set 329 284 298 309 372 286
Green: Above Comp Set Average Red: Below Comp Set Average
Room Nights 29-nov Rank 06-dic Rank 13-dic Rank 20-dic Rank 27-dic Rank 03-ene Rank
Current Subscriber 56 2 of 7 6 5 of 7 19 1 of 7 53 1 of 7 47 1 of 7 19 1 of 7
Competitive Set 199 66 49 79 60 21
1 Week Ago Subscriber 48 2 of 7 4 4 of 7 19 1 of 7 53 1 of 7 47 1 of 7 19 1 of 7
A Competitive Set 173 55 32 86 59 27
L Competitive Set 138 34 22 73 63 35
L 3 Weeks Ago Subscriber 41 1 of 7 3 3 of 7 16 1 of 7 25 2 of 7 28 1 of 7 9 2 of 7
Forecasting
Lead Time
informs us of customer demand for a specific date
Lead Time Statistics 0-3 4-7 8-14 15-30 31+

(Based on RoomNights) Days Days Days Days Days
ALL
Subs RoomNights 19 18 63 73 310
Average RoomRate in USD 436,37 318,51 375,33 449,75 366,96
Average Length of Stay 2,11 1,50 2,17 2,70 2,79
Market Penetration (RoomNights) 45,3% 35,0% 82,5% 63,2% 110,9%
Comp Total RoomNights 202 253 340 536 1.164
Set Average RoomRate in USD 457,18 425,99 397,12 426,85 448,39
Average Length of Stay 1,60 1,71 2,18 2,81 2,58
Forecasting
Study of events in the hotel, city,

conferences, festivals and vacations
Month/Day1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
January B S S S S S S S S S D D D S S S S S S S S D S S S S D S S S S
Specials Event
MLS
February E E E E E E E E C C C C E E E E E E E S E E E E E E E E
Specials
MLS
March E D X X A C X X X X X C C X X X X X C C X X C C C C C C C C C
Specials Event
MLS
April D C C D D D D C C D D D D D C C D D D D D C C D D D D D C C
Specials
MLS Easter
May C C C C A A A A C C C C C C C C C C C C C C C C C C C C C C C
Specials Event Event Event
MLS
Jun C C C C D D D D D D D D B B B C C D D D D D D D D D D D D D
Specials Event
MLS
Jul D D C C C E E D D E E E E E D D E E E E E D D E E E E E D D E
Specials Event
MLS
Aug E E E E D D E E E E E D D E E E E E D D E E E E E D D E E E E
Specials
MLS
Sep E D D E D D D D D D D D D D D D D D D D D D D D D D D D D D
Specials
MLS
Oct X X X D D D D D D D D D D D D D D D D D D D D D C C C C C C D
Specials Event
MLS
Nov C E E E E E E E E E E E E E E E E E E E E E E E E C C C B B
Specials Event
MLS
Dec B C C C E E E E E E E E E E E E E E E E E E E D D D D D D B B
SpecialsEvent Christmas
MLS
Forecasting
Internal reports that cross-check annual data such as inquiries

for other areas of the hotel alba, apartments, spa
Organigram
DOSM
DOSM
Marketing
Marketing Revenue
Revenue eCommerce
eCommerce Dtor.
Dtor. Ventas
Ventas
Manager
Manager Manager
Manager Manager
Manager Adjunto
Adjunto
Rvas.
Rvas. Indiv.
Indiv. Reservas
Reservas Equipo
Assistant Assistant Equipo
Assistant Assistant 11 Assistant
Assistant 22 Assistant
Assistant 11 Assistant
Assistant 22 CRS
CRS Grupos
Grupos Ventas
(EQUIPO) (EQUIPO) Ventas
(EQUIPO) (EQUIPO)
Exercise 1
Exercises
Reactive measures, short-term
Exercises
Proactive measures long-term
Exercises
Required Analysis Reports and Actions
Exercises
Daily Tasks
Weekly Tasks
Exercises
Monthly Tasks
Annual Tasks
Exercises
Daily Management
Reservations
Website
Reception
Exercise 2
Exercise
Position your hotelpossible improvements
Type of hotel
Positioning
Characteristics
Company to which it belongs
Objectives of hotel management
Exercise
Annual Calendar of Actions

Expected
Hotel Month Segment Activity Objetive R/Ngts Who Cost Status
Revenue
When we use it
Exercise
Hotel room structure:
What is the hotel room structure of a exemplary hotel like?
What is the structure of supplementary products like?
What is the objective of the extras?
Exercise
Practical exercise in groups:
Our hotel has 100 rooms
14-21 January in Barcelona with events, conferences, weekends, etc.
Use BAR of A-D (A is the highest price = 400 and D the lowest = 100)
Mobile World Congress: 14-17 January we are at 90%
Group confirmed for 75 rooms 19-20 January
Average occupation the remainder of January isnt over 50%
Exercise 3
Exercises
Glossary: Describe y Order by Families

AAVV
ADR
ALGORITMO
ARI
BAR
BOOKING ENGINE
BOOKING PACE
CANAL
CHANNEL MANAGER
CMS
CONSORTIA
CORPORATE
ERP
GDS
GOPPAR
IDS
MPI
ORIGEN
OTA
PMS
RATE PARITY
REVPAR
REVPAV
RGI
RM
SERMENTACION
TTOO
Curso Formacin YM
de Revenue Management Madrid 9,10 y 11 Noviembre 2012 Impartido por: Tomeu Pons tomeupons@gmail.com 141
Summary: Revenue Management Concepts
Exercise 4
Exam
Questions:
1. When should you activate an offer?

2. From where does the data from the flow of reservations come from?
3. How do you control the costs of distribution?
4. Besides rooms, to what else can you apply RM in hotels?
5. How do you know if you are selling at prices that are too low?
6. How do you know if you are selling at prices that are too high?
7. How do save inventory and why?
8. To whom must availability be given to?
9. When should be create a new type of hotel room?
10. How do you control sales price and who usually lets them get out of control?
11. What are the 5 most important variables of RM? (glossary)
12. When should you reject reservations at low prices and at high prices?
13. What is auto allotment?
14. About your hotel: do a SWOT analysis
15. Make prices for: 1 hotel with 1 room and 1 salon
Summary: Revenue Management Concepts
Free Downloads:
http://www.adhp.org/pdf/1-theBasicsofRM.pdf
http://revenueanalytics.com/pdf/Cornell%20Fe
bruary%202009.pdf
http://cqx.sagepub.com/
http://www.hammerman.com/files/occtrack/fore
casting.pdf
http://www.hsmai.org/members/SIGRevManag
ement.cfm
Recommended Reading
Thanks for your attention.

Professor: Tomeu Pons tomeupons@gmail.com
LinkedIn: http://es.linkedin.com/in/tomeupons
Blog: http://flamingohotelier.wordpress.com/
This document was written under the license of the Creative
Commons & Copyleft. Use this content at your convenience.
Link to this document.
If you are the owner of the Copyright of a part of this

document, please advise and it will be substituted or deleted.

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Introduction to

Presented by Tomeu Pons

The main objective of this seminar is to understand the purpose

With this information, a hotel can evaluate, develop and optimize

Professor: Tomeu Pons tomeupons@gmail.com

Collaborating Professor Turisme Sant Ignasi TSI, Fundaci

Educated in Hospitality, Marketing, E-

Chief Operating Office Flamingo Hotelier

Previously, Consultant ,Director of Marketing and CEO in companies

Revenue Management is a commercial management technique

Revenue Management is a strategy we can use in response to:

Revenue Management is a method of managing sales of hotel

Basic elements of Revenue Management used to manage inventory:

Historical data statistics, demand and trends

With the above, we can address:

Fixed and perishable inventory

The customer is the most important factor in determining price.

Each client is different and has their own motivation:

To understand this environment we must segment the market,

Interested in different products

The product is another of the key factors.

What is it about our product that drives sales?

Once we determine this, we can effectively develop our product:

Create additional room types?

Although the price seems to be a lever we control, this is

- Price is determined by demand

However, there are techniques and factors that enable us to

The moment of reservation is a key element in the management

Its an important moment for the customer just as much as it is

Many techniques exist for both players.

How it was born

These sales techniques were developed during the middle of the

Once their information systems were computerized, they were

Companies could sell airplane tickets at different prices. They

To be able to predict how much clients were willing to pay for a

The total acceptance and integration of the Internet as a major

2003 Some Majors changed to dynamic pricing

Techniques to determine prices are developed in the heart of

The main factors in setting prices are:

Where do prices come from?

Techniques to set the prices of a good or a service

Setting of prices can focus on anything from cost of production to

From the point-of-view of marketing, an efficient price is a price

In economic terms, it is a price that transfers the most value

In the mind of the consumer, they are comparing different

This determines, in their minds, the right price theyd pay.

For a company to increase profitability from sales, they must

To increase the consumers perceived value of our products and

The efficient price is the maximum consumers are willing to

Without Yield Prices based upon cost

$$ $$$ $$$$$ $$$$$

With Yield Prices based upon demand

Cost of Desired YIELD

$$ $$$ $$$$$ $$$$$$ $$$$$$$$$$$$$$$$$$$$

A hotel has 200 rooms

If they apply RM for each of their rooms and each room

200 rooms x 2$ = 400$/day x 365 days = 146.000$

1 Hotel x 100 rooms x 365 days =

TOTAL ANNUAL INCREASE = 218,988 $

How clients agree to prices

Fixed production of stock/products

To manage RM actions, the involvment of Management, Sales and Reservations

The main RM tools: