7cfc9896aed1a61c663e5624cb85240d.ppt
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Revenue Management Training Easy (Ez) Revenue Management Solutions
Agenda – Day 1 § 09: 00 Revenue Management the Ez. RMS Way § 10: 00 Ez. RMS™ Core Module system training § § History Bookings Booking Pick-Up Special Events § 12: 30 Lunch § 13: 30 Ez. RMS™ Core Module system training § § Forecast Revenue Opportunities Analysis Configuration § 15: 00 Updating the PMS & CRS § 17: 00 Ez. RMS™ New Features § 18: 00 Questions Easy (Ez) Revenue Management Solutions
Agenda – Day 2 § 08: 30 Ez. RMS™ Overview § § § Ez-Compete Ez-Bench Ez-Quote Ez-Region Ez-Budget § 12: 30 How to use Ez. RMS™ § 13: 30 Ez. RMS™ Core Module system training § Daily tasks § Weekly tasks § Monthly tasks § 14: 30 Case Study § 17: 00 Questions Easy (Ez) Revenue Management Solutions
Introduction to Revenue Management Easy (Ez) Revenue Management Solutions
Introduction to Ez. RMSTM Easy (Ez) Revenue Management Solutions
History § A young and dynamic company founded in 1999 § New technology incorporating lessons learnt from experience § ASP platform enabling easy access from any computer and easy upgrades and updates § Supplying to leading hotel chains Easy (Ez) Revenue Management Solutions
Some of our clients § § § § § Accor Hotels BDL Brochner Hotels Crown Plaza Cendant Centennial Hotels Chester Grosvenor Hotel & Spa Dorchester Hotel Elite Hotels of Sweden Express by Holiday Inn First Hotels Hasting Hotels Holiday Inn Hotel Amsterdam Hotel Fouquet’s Barrière Hotel Le Bristol Paris Hotel Le Meurice Hotel Plaza Athenée Easy (Ez) Revenue Management Solutions (In alphabetical order) § § § § Leading Hotels of the World Lucien Barrière Millennium Hotels NH Hotels Paramount Group of Hotels Preferred Hotels & Resorts Worldwide Radisson SAS Radisson Edwardian Ramada Small Luxury Hotels of the World Somerston Hotels St George Lycabettus Hotel Summit Hotels The Merrion Dublin The Madison Concourse Hotel Trump Hotels
The Ez. RMS™ Setup Easy (Ez) Revenue Management Solutions
Property Management System Central Reservations System Revenue Manager Internet Reservations Systems Easy (Ez) Revenue Management Solutions
Property Management System Central Reservations System Revenue Manager Area Revenue Manager Easy (Ez) Revenue Management Solutions Internet Reservations Systems
System Information Flow Data Extract Snapshot Program (daily) Emailed (data is encoded) Property Management System Ez. RMS Secure Server in Paris § Forecast § Revenue Opportunities § Restrictions Easy (Ez) Revenue Management Solutions
Ez. RMS™ Modules Core Module Additional Module Database loading Ez-QUOTETM Modelling & Forecasting Ez-BUDGETTM Optimisation & Control Ez-REGIONTM Ez-COMPETETM Ez-BENCHTM Easy (Ez) Revenue Management Solutions
Pricing § Pricing is an essential element of Revenue Management § Do you have the right price structure? § Why should you have the right price structure? Easy (Ez) Revenue Management Solutions
Decision Cycle What occupancy will I achieve? At what price do I sell at? Prices (s) Occupancy Demand Levels Easy (Ez) Revenue Management Solutions What demand does this generate ?
Rate versus Occupancy? On which day does this hotel makes the highest revenue? 100 Bed room hotel Easy (Ez) Revenue Management Solutions
Rate versus Occupancy? On which day does this hotel makes the highest revenue? 100 Bed room hotel Easy (Ez) Revenue Management Solutions
You Have One Room to Sell, which Booking Do You Take? Reservation #1: 1 Night @ 275 Reservation #2: 1 Night @ 250 Easy (Ez) Revenue Management Solutions
Profitability Calculation Reservation #1 Reservation #2 Rate Profit § Room § Breakfast 275 10 220 8 Profit 228 Pax 1 Pax 2 Rate Profit § Room § Breakfast § Dinner § Wine § Laundry 250 10 20 15 10 200 8 6 9 9 Profit 232 200 16 12 18 9 255 +4 + 27 Room 80% - Brf 80% - Food 30% - Bev 60% - Laundry 90% Easy (Ez) Revenue Management Solutions
Realising Total Potential! F&B Revenue Room Revenue Total Potential Revenue Other Revenue Easy (Ez) Revenue Management Solutions
Five Core Components § Knowledge Database § Understanding of products and market motivation § Forecasting § By behaviour pattern § Optimisation § Choosing the optimal revenue § Control § Ensuring optimal revenues are achieved by translating the optimal results into control values understood by the user, PMS or CRS. § Communication § Communicate controls internally & externally Easy (Ez) Revenue Management Solutions
Five Core Components § Knowledge Database § Understanding of products and market motivation § Forecasting § By behaviour pattern § Optimisation § Choosing the optimal revenue § Control § Ensuring optimal revenues are achieved by translating the optimal results into control values understood by the user, PMS or CRS. § Communication § Communicate controls internally & externally Easy (Ez) Revenue Management Solutions
Knowledge Database Easy (Ez) Revenue Management Solutions
Knowledge Database § § § § § Guest Type Business Type Room Type Day of Week Day in Advance / Lead-Time / Milestone Season Special Events Market Segment Rate Category Easy (Ez) Revenue Management Solutions § § § Occupancy Revenues Booking Pick-up Cancellations Group Wash No Shows Early Departures Walk in. 's Extended Stays Book Outs Denials Waitlists
Knowledge Database § § § § § Guest Type Business Type Room Type Day of Week Day in Advance / Lead-Time / Milestone Season Special Events Market Segment Rate Category Easy (Ez) Revenue Management Solutions § § § Occupancy / Volume Revenues Booking Pick-up Cancellations Group Wash No Shows Early Departures Walk in. 's Extended Stays Book Outs (relocates) Denials Waitlists
Special Events Event Categories Repetitive Events § Public Holidays § Religious Holidays § Trade Shows § Exhibitions § Conferences § Sporting Events One Off Events § Day of Independence § Summer Olympics § Birth / Death of Monarch § New Year 1999 Easy (Ez) Revenue Management Solutions Unpredictable Events § Delayed Flights § Strikes § Severe Weather
Special Events Number of Bookings Forecasted Demand Example of Impacts Capacity Event Curve 1 Normal Curve Event Curve 2 Normal Special Event 1 Special Event 2 Easy (Ez) Revenue Management Solutions Days Booked in Advance of Arrival
Knowledge Database § § § Guest Type Business Type Room Type Day of Week Day in Advance / Lead-Time / Milestone Season Special Events Market Segment Rate Category Buckets Easy (Ez) Revenue Management Solutions § § § Occupancy / Volume Revenues Booking Pick-up Cancellations Group Wash No Shows Early Departures Walk in. 's Extended Stays Book Outs (relocates) Denials Waitlists
Rate Bucket Definition: § A ‘Rate Bucket’ in Ez. RMSTM are based on the grouping of the Rate Categories or Market Segments. Ez. RMS produces Forecast and Recommendation by ‘Rate Bucket’ and by ‘Room Category’. Easy (Ez) Revenue Management Solutions
Rate Bucket by rate categories § Rules when defining a bucket: § Do not mix transient rate codes with group rate codes § Do not mix no refusal rates (LRA) with refusal rates § A given ‘Bucket’ should be composed of Rate Codes having comparable rate values (single occupancy) § A ‘Bucket’ should represent between 5 to 15% of the total business Easy (Ez) Revenue Management Solutions
Bucket Set-up by rate categories Hotel Transient 1 2 A&E Group BUCKETS S&T 3 4 GRH GRL I J GRH GRL RATE CATEGORIES Q&R G&H O TOU Easy (Ez) Revenue Management Solutions L F
Knowledge Database § § § § § Guest Type Business Type Room Type Day of Week Day in Advance / Lead-Time / Milestone Season Special Events Market Segment Rate Category Easy (Ez) Revenue Management Solutions § § § Occupancy Revenues Booking Pick-up Cancellations Group Wash No Shows Early Departures Walk in. 's Extended Stays Book Outs Denials Waitlists
Booking Build Up Curves Number of Bookings 12 11 10 9 8 7 6 5 Days to Arrival Easy (Ez) Revenue Management Solutions 4 3 2 1 0
Five Core Components § Knowledge Database § Understanding of products and market motivation § Forecasting § By behaviour pattern § Optimisation § Choosing the optimal revenue § Control § Ensuring optimal revenues are achieved by translating the optimal results into control values understood by the user, PMS or CRS. § Communication § Communicate controls internally & externally Easy (Ez) Revenue Management Solutions
Forecasting Past/History Reservations Business on the Books Future Reservations Analysis Forecast * * A revised forecast is prepared every day Easy (Ez) Revenue Management Solutions
Forecasting What does Ez. RMSTM use to make an accurate forecast? Multiplicative (pick-up) Exponential Smoothing Moving Average Linear Regression Easy (Ez) Revenue Management Solutions Additive (pick-up)
Booking Curves are created Number of Bookings Bucket H @ 275 Bucket C @ 250 Bucket D @ 200 12 11 10 9 8 7 6 5 Days to Arrival Easy (Ez) Revenue Management Solutions 4 3 2 1 0
Booking Curves are created A forecast is generated determining the booking behaviour of different: § § § Rate Bucket Room Categories Seasons Length of Stay Day of Week Events Easy (Ez) Revenue Management Solutions
Forecast Example § Suppose it is 5 days before arrival § Currently you have 4 rooms on the books § Normally at 5 days before arrival, you have 50% of total expected rooms on the books. § What is our forecast? 8 rooms § What happens if we only have 7 rooms? Easy (Ez) Revenue Management Solutions
Five Core Components § Knowledge Database § Understanding of products and market motivation § Forecasting § By behaviour pattern § Optimisation § Choosing the optimal revenue § Control § Ensuring optimal revenues are achieved by translating the optimal results into control values understood by the user, PMS or CRS. § Communication § Communicate controls internally & externally Easy (Ez) Revenue Management Solutions
Optimisation Unconstrained Demand Number of Bookings Willing to pay “H” @ 275 Willing to pay “M” @ 250 Willing to pay “L” @ 200 12 11 10 9 8 7 6 5 Days to Arrival Easy (Ez) Revenue Management Solutions 4 3 2 1 0
Optimisation Number of Bookings Willing to pay “H” @ 275 Willing to pay “M” @ 250 Willing to pay “L” @ 200 12 11 10 9 8 7 6 5 Days to Arrival Easy (Ez) Revenue Management Solutions 4 3 2 1 0
Capacity Optimisation Principle § When Demand is Greater than Supply. § Ensure that Sufficient Rooms are Reserved for Essential Clients. § Cherry-Pick the Best Revenues to Fill the Remaining Space Easy (Ez) Revenue Management Solutions
Revenue Displacement Calculation of Revenue Loss / Gain due to the realisation of unexpected business or business not forecasted, Ad-hoc Groups, Tour Series etc. . . Easy (Ez) Revenue Management Solutions
Revenue Displacement A simple example Capacity 100 rooms 10 Empty Rooms R: 10 Rooms @ 300 H: 20 Rooms @ 275 M: 20 Rooms @ 250 L: 30 Rooms @ 200 D: 10 Rooms @ 150 Easy (Ez) Revenue Management Solutions
Revenue Displacement A simple example Capacity 100 rooms 10 Empty Rooms R: 10 Rooms @ 300 H: 20 Rooms @ 275 What business would the group displace? M: 20 Rooms @ 250 L: 20 Rooms @ 200 L: 30 Rooms @ 200 GROUP: 30 Rms = 100* = 1500 = 2000 Displacement = 3600 * Cost of Sales = 10 L: 10 Rooms @ 200 D: 10 Rooms @ 150 Easy (Ez) Revenue Management Solutions 10 Empty Rooms 10 Rooms @ 150 10 Rooms @ 200
Revenue Displacement A simple example Capacity 100 rooms 10 Empty Rooms R: 10 Rooms @ 300 H: 20 Rooms @ 275 What is the group worth? M: 20 Rooms @ 250 GROUP: 30 Rms @ 195 L: 10 Rooms @ 200 D: 10 Rooms @ 150 Easy (Ez) Revenue Management Solutions 30 Rooms @ 195 = 5850 Group Value L: 20 Rooms @ 200 = 5850
Revenue Displacement A simple example Capacity 100 rooms R: 10 Rooms @ 300 H: 20 Rooms @ 275 M: 20 Rooms @ 250 L: 20 Rooms @ 200 What is the additional revenue? Easy (Ez) Revenue Management Solutions = 5850 = -3600 Additional GROUP: 30 Rooms @ 195 Group Value Displacement = 2250
Five Core Components § Knowledge Database § Understanding of products and market motivation § Forecasting § By behaviour pattern § Optimisation § Choosing the optimal revenue § Control § Ensuring optimal revenues are achieved by translating the optimal results into control values understood by the user, PMS or CRS. § Communication § Communicate controls internally & externally Easy (Ez) Revenue Management Solutions
Controls There are many types of controls, examples are: § § Rate Restrictions Length of Stay Restrictions Overbooking Bid Price Controls are used to apply the Result of the Optimisation process and should be the same as the controls used in PMS / CRS / Manual Control processes. Easy (Ez) Revenue Management Solutions
How do you select the Best Business? § § Rate Restrictions Length of Stay Restrictions Overbooking Bid Price Easy (Ez) Revenue Management Solutions
Rate Restrictions Capacity 100 rooms 10 Empty Rooms R: 10 Rooms @ 300 What is the lowest rate you would sell? M: 20 Rooms @ 250 L: 30 Rooms @ 200 D: 10 Rooms @ 150 Easy (Ez) Revenue Management Solutions Forecasted Demand 90 rooms H: 20 Rooms @ 275 150 However, if the cost of selling a room is 10, how much would you have to charge in order to make a profit and maybe even fill the hotel? 11
Rate Restrictions R: 15 Rooms @ 300 10 Empty Rooms R: 10 Rooms @ 300 H: 25 Rooms @ 275 Capacity 100 rooms What is the lowest rate you would sell? H: 20 Rooms @ 275 M: 20 Rooms @ 250 L: 40 Rooms @ 200 L: 30 Rooms @ 200 D: 10 Rooms @ 150 Easy (Ez) Revenue Management Solutions D: 10 Rooms @ 150 11
Rate Restrictions R: 15 Rooms @ 300 10 Empty Rooms R: 10 Rooms @ 300 H: 25 Rooms @ 275 Capacity 100 rooms What is the lowest rate you would sell? H: 20 Rooms @ 275 M: 20 Rooms @ 250 11 What is the lowest rate you would sell? L: 40 Rooms @ 200 L: 30 Rooms @ 200 “Bid Price” D: 10 Rooms @ 150 Easy (Ez) Revenue Management Solutions D: 10 Rooms @ 150
How do you select the Best Business? § § Rate Restrictions Length of Stay Restrictions Overbooking Bid Price Easy (Ez) Revenue Management Solutions
Length of Stay Restrictions Hotel § Hotel X has 2 rooms § A TWO night period Easy (Ez) Revenue Management Solutions Night 1 Night 2
Length of Stay Restrictions Forecasted Demand § Guest V @ 275 § Guest W @ 250 § Guest X @ 225 § Guest Y @ 170 § Guest Z @ 200 Easy (Ez) Revenue Management Solutions Hotel Night 1 Night 2
Length of Stay Restrictions Forecasted Demand § Guest V @ 275 § Guest W @ 250 Hotel Night 1 § Guest X @ 220 275 § Guest Y @ 175 Night 2 250 § Guest Z @ 200 Total Revenue = 745 “First come first serve. . . ” Easy (Ez) Revenue Management Solutions 220
Length of Stay Restrictions Forecasted Demand § Guest V @ 275 § Guest W @ 250 Hotel Night 1 Night 2 § Guest X @ 220 175 § Guest Y @ 175 200 § Guest Z @ 200 Total Revenue = 750 “Minimum length of stay of two nights. . . ” Easy (Ez) Revenue Management Solutions
Length of Stay Restrictions Forecasted Demand § Guest V @ 275 § Guest W @ 250 Hotel Night 1 Night 2 § Guest X @ 220 275 220 § Guest Y @ 175 200 § Guest Z @ 200 Total Revenue = 895 “What would Ez. RMSTM do? ” Easy (Ez) Revenue Management Solutions
Full pattern length of stay Mon Bid Price Tue Wed Thu 210 80 400 320 ( 210 + 210++400 ) / 3203 / 4 ( 21080 80 + 400 2 / ) ( + 80 + ) Bid price by LOS Bucket H @ 275 Bucket M @ 250 Bucket L @ 200 Easy (Ez) Revenue Management Solutions 210 145 230 252 1 night 2 nights 3 nights 4 nights Ez. RMS Recommendations Open MAX 3 MIN 2
How do you select the Best Business? § § Rate Restrictions Length of Stay Restrictions Overbooking Bid Price Easy (Ez) Revenue Management Solutions
Not Overbooking the Hotel Capacity 100 rooms 100 Rooms on the books Easy (Ez) Revenue Management Solutions
Not Overbooking the Hotel Capacity 5 No-Shows 10 Late Cancellations Easy (Ez) Revenue Management Solutions 100 rooms 15 unsold rooms
Overbooking the Hotel 5 No-Shows 5 Late Cancellations Capacity 110 Rooms on the books Easy (Ez) Revenue Management Solutions 100 rooms
Overbooking the Hotel Capacity 100 rooms 100 Rooms sold Easy (Ez) Revenue Management Solutions
Overbooking the Hotel Capacity 100 rooms 110 Rooms on the books Easy (Ez) Revenue Management Solutions But what if?
Overbooking the Hotel 5 Extra Arrival 5 Late Cancellations Capacity 110 Rooms on the books Easy (Ez) Revenue Management Solutions 100 rooms But what if?
Overbooking the Hotel Capacity 5 Relocations 100 Rooms Sold Easy (Ez) Revenue Management Solutions 100 rooms
Cost of relocation Costs § Room 200 § Taxi 20 § Phone 10 Relocation Cost = 230 § Extra “L bucket” reservation @ 200 Not worth it! § Extra “H bucket” reservation @ 275 Worth it! Easy (Ez) Revenue Management Solutions
How do you select the Best Business? § § Rate Restrictions Length of Stay Restrictions Overbooking Bid Price Easy (Ez) Revenue Management Solutions
Bid Price Capacity 100 rooms M: 30 Rooms @ 250 L: 45 Rooms @ 200 Forecasted Demand 110 rooms H: 25 Rooms @ 275 What rates do we accept to get the highest revenue? 200 Bid Price D: 10 Rooms @ 150 Easy (Ez) Revenue Management Solutions
Bid Price Capacity 100 rooms M: 30 Rooms @ 250 Demand H: 25 Rooms @ 275 L: 45 Rooms @ 200 D: 10 Rooms @ 150 Easy (Ez) Revenue Management Solutions
Bid Price Capacity 100 rooms 10 Empty Rooms M: 25 Rooms @ 250 L: 35 Rooms @ 200 D: 10 Rooms @ 150 Easy (Ez) Revenue Management Solutions Forecasted Demand 90 rooms H: 20 Rooms @ 275 What rates do we accept to get the highest revenue? Cost of Sales = 10 10 + 1 Bid Price 11
Five Core Components § Knowledge Database § Understanding of products and market motivation § Forecasting § By behaviour pattern § Optimisation § Choosing the optimal revenue § Control § Ensuring optimal revenues are achieved by translating the optimal results into control values understood by the user, PMS or CRS. § Communication § Communicate controls internally & externally Easy (Ez) Revenue Management Solutions
Communication § Revenue Management Meeting § Communicate § Internal Controls § External Controls Easy (Ez) Revenue Management Solutions
Communicate Controls Internal Phone / Reception § Ez. RMSTM Recommendation § Revenue Meeting Decisions External CRS / GDS Internet Easy (Ez) Revenue Management Solutions
Five Core Components § Knowledge Database § Understanding of products and market motivation § Forecasting § By behaviour pattern § Optimisation § Choosing the optimal revenue § Control § Ensuring optimal revenues are achieved by translating the optimal results into control values understood by the user, PMS or CRS. § Communication § Communicate controls internally & externally Easy (Ez) Revenue Management Solutions
Summary – Revenue Management § To sell the right product, to the right customer, at the right time, at the right price for the right duration § Can be applied when - Capacity is Fixed - Product is Perishable Demand is Variable - Differing Prices are Sold Simultaneously or Single Price is sold for Multiple Nights. § Is critical for the fundamental decision making process. (Price, Capacity, Demand) § Efficiency of RM can be measured by using – REVPAR TREVPAR. § Revenue Management can be implemented by utilising the 5 core components. Easy (Ez) Revenue Management Solutions
Thank You Easy (Ez) Revenue Management Solutions
Easy (Ez) Revenue Management Solutions