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BUSM4568 - ROOM DIVISION MANAGEMENT

Week 3 : Revenue management Formula 1 : Revenue Rooms Revenue = Rooms night sold x room rate charged Tính số tiền kiếm được từ số tiền đã bán Example: If a hotel sells 6450 room nights at $122 per room, revenue will be 6450 122 = $786900 (Formula 1)

Formula 2 : Occupancy Percentage Occupancy percentage expresses the portion of rooms sold to total rooms Tỷ lệ chiếm dụng thể hiện phần phòng được bán cho tổng số phòng Occupancy percentage = room nights sold in a period / rooms nights available in that same period x 100 Eg. 1428 room nights sold in 1 week for a 300 room hotel.Occupancy for that 1 week is 1428 / 7 days x 300 rooms = 68 percent (Formula 2) Formular 3: Average Daily Rate ( ADR) ( Single Rate) Expresses the average room rate from the sales of rooms in a given period – should be calculated daily, weekly, monthly or yearly Thể hiện giá phòng trung bình từ doanh số bán phòng trong một khoảng thời gian nhất định - nên được tính hàng ngày, hàng tuần, hàng tháng hoặc hàng năm

ADR= room revenue / no of room nights sold Room rev is $114240 for a week and the hotel sold 1428 room nights in that week. Implies $114240/ 1428 = $80 Tracking and benching marking is important According to the Uniformed System of Accounts for the Lodging Industry – Complimentary are not counted in the ADR (it is not counted for sales performance analysis) Formular 5: RevPAR Consider ResortA, Night 1 – has 70%occupancy / ADR$95; Night 2 - 75%occupancy / ADR$90? Which Night is Better? RevPAR, or revenue per available room, is a performance metric in the hotel industry that is calculated by dividing a hotel's total guestroom revenue by the room count and the number of days in the period being measured.

BUSM4568 - ROOM DIVISION MANAGEMENT RevPAR, hoặc doanh thu trên mỗi phòng có sẵn, là một chỉ số hiệu suất trong ngành khách sạn được tính bằng cách chia tổng doanh thu phòng khách của khách sạn cho số phòng và số ngày trong khoảng thời gian được đo. RevPar = Room Rev for a period / Total room available for that period, or RevPAR = ADR x occupancy percentage From a REVPAR stand point, Night 2 is more profitable Why? 1st night -> $95 x 70% = $66.50 2nd night -> $90 x 75% = $67.50 REVPAR takes into considerable of fixed cost Formula 6 : Contribution Margin Formula : Contribution Margin = Rm Rate – Variable Cost Example : CM = $138 (room rate) - $18 (variable cost) = $120 Variable Cost is the amount that is needed to clean, resupply the room when it used Therefore CM is the amount of revenue left over from to cover fixed cost Formular 8: Gross operating profit per available room (GOPPAR) - Lợi nhuận gộp hoạt động trên mỗi phòng có sẵn (GOPPAR)

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Compares operating profit over a period of time over the total number of available room Can be monthly, quarterly or annually So sánh lợi nhuận hoạt động trong một khoảng thời gian so với tổng số phòng có sẵn

Example: a 350 unit hotel with an annual gross operating profit of $4,650,000 would have a GOPPAR of $36.40 Formula : GOPPAR = Gross operating profit for a period / available rooms of that period Formula 9 – Revenue Per Available Customer Revenue Per Available Customer (RevPac) Example RevPac per night Room Revenue (in dollars) $48,000 Number of Guest Staying 350 gst

= $137.14

RevPac measures the average revenue generated by each stay in Guest. It is derived by dividing the total revenue by the no of guest staying over night. Although most hotel are in favour of looking only at RevPar, RevPac is becoming an important industry statistic

BUSM4568 - ROOM DIVISION MANAGEMENT RevPac đo lường doanh thu trung bình được tạo ra sau mỗi lần lưu trú tại Khách. Nó có được bằng cách chia tổng doanh thu cho không có khách lưu trú qua đêm. Mặc dù hầu hết các khách sạn đều ủng hộ chỉ nhìn vào RevPar, RevPac đang trở thành một thống kê quan trọng trong ngành

Yield Statistic Example Yield Statistic Actual Rooms Revenue $48,000 = = 0.4 = 40% Potential Rooms Revenue $120,000 Potential Rooms Revenue is the amount of rooms revenue that can be generated if all the rooms are sold at Rack Rate on any given day, week, month, or year. This allows Front Office Managers, Revenue Managers, and Directors of Sales and Marketing to to evaluate the effectiveness of the selling of rooms

Measuring Performance in a Competitive Framework 1. Market Penetration Index (MPI) – Occupancy MPI is the percentage of demand for rooms accruing to a hotel. It is calculated as the ratio between the Total Rooms Occupied in the hotel against the Total Rooms Occupied collectively attributed by the hotel’s competitive market set. In other words, it measures a hotel’s market share relative to its competitors set collectively. 2. Average Rate Index (ARI) – Room Rate ARI is the percentage of room rates of a hotel against the average rate collectively attributed by the hotel’s competitive market set. It measures a hotel’s average rate against its competitors set collectively. 3. Revenue Generation Index (RGI) – Yield per available room RGI measures a hotel market share in terms of room yield against its competitive set collectively....