AGENDA  I. Value  II. Value Selling  III. Evaluating Your Potential Guests  IV. Regrets & Denials  V. The Competition  VI. STAR Report  VII. The Revenue Management Game  VIII.QUIZ

Understanding Value Understanding Value  Value is not only associated with price, but quality for the price paid, with limited time and stress in buying and receiving the product.  What items at your hotel represent value to the guest?  Guests see value through friendly, efficient service and staff, clean comfortable surroundings, easy to understand & consistent pricing, ease of booking, 100% satisfaction guarantee, hotel location, breakfast, and room amenities.

Value Selling  Creating value for the guest, includes experience, service, amenities, and room types – not rate.  Help guest understand what is included in the rate before quoting. Selling the overall package is key to success!

Evaluating Potential Guests  Just as guests evaluate our value to them, we need to evaluate what value they bring to us.  Is every guest right for your property?  Items to consider if guest or piece of business is right for your hotel. –Volume, Method of Payment, Booking Channel, Time of Year, T/A Commission, Arrival/Departure pattern, No. of people in party, Length of stay, Cost of delivery.

REGRETS VS. DENIALS  Regrets- potential reservations not booked when there is inventory available. Common regret reasons are rate, room type not available, location, and restriction policies.  Denials- a reservation request not booked due to no inventory availability  WE REGRET THEY DENY.

Competitive Advantage Competitive Advantage  What separates you from your competitors?  Remember many of your competitors have similar amenities. Intangibles, such as friendly and efficient service, give us a strategic advantage over the competition. Your competitive advantage is key in Value selling.

Competitive set  A group of hotels chosen to serve as a standard set of suitable competitors against which performance is measured, specifically used in Starcast report..  Who’s in your competitive set? Why are they in your set?  Competitors are usually chosen based on location, product similarities and / or price similarities

STAR Report  A tool that allows a hotel to manage REVPAR and measure success against the hotel competitive set.  Performance measured by rate, occupancy, and REVPAR.

ADR  Average Daily Rate Determined by dividing the total room revenue by total rooms occupied.  Ex. 125 room hotel sells 100 rooms and shows $8,250 in revenue.  $8,250/100 rooms = $82.50 ADR

Occupancy  Total Rooms Sold/Total Rooms Available.  Ex. 125 Room hotel sells 100 rooms.  100/125 =.80 = 80% Occupancy

REVPAR REVPAR  REVPAR = Revenue Per Available Room. Amount of money a hotel earns for each Room/Suite they have available for sale.  2 Ways to Calculate: 1. Total room revenue / Number of total rooms available 1. Total room revenue / Number of total rooms available 2. ADR x OCC 2. ADR x OCC  REVPAR is key in measuring hotel performance

Example of STAR Report

THE REVENUE MANAGEMENT GAME

REVMAX GAME  You are the Director of Revenue Management of a five bedroom hotel.  Goal: To sell every room, every day, at the most profitable amount you can. Remember rooms are perishable and if they don’t sell there is still a cost attributed to having them!  You will receive a series of 15 calls to book your hotel, your objective is to decide AT THAT MOMENT which calls/reservations to take and which to regret.

GAME DIRECTIONS  After each call is provided, decide whether to take the call at that rate.  If you ACCEPT, fill in the rate in the boxes that it corresponds to. If you REGRET, you do not fill anything in.  YOU CAN NOT INSERT A RATE AFTER THE CALL IS OVER!

GAME RATE STRUCTURES  Corporate $115  Advance Purchase $85  AT & T $90  Government $75  Travel Industry $70

Sample of the Game Sheet

Quiz Part 1  Front Desk Training Quiz  Helping guests to understand all that is in our rates, before quoting a rate, is called what?____________ ____________  How do you calculate Occupancy? –Total rooms available/total rooms sold –Total rooms sold/total rooms available –Total room revenue/total rooms sold –Total room revenue/total rooms available  What tool allows a hotel to manage RevPar and measure its success against the hotel’s competitive set? __________ ___________  How do you calculate ADR? –Total room available/total rooms sold –Total room revenue/total rooms sold –Total revenue/total rooms available –Cost of line item/total  The hotel’s room revenue for the month of October was $200,000. The hotel sold 2,500 rooms this month. What is the hotel’s ADR?

QUIZ Part 2  There are 2 ways to calculate RevPar. Show one.  RevPar stands for __________ _________ __________ _________.  A group of hotels chosen to serve as a standard set suitable competitors against which performance is measured, specifically used in the Star Report.  _______________ ______________  List 3 items in which we evaluate guests on to determine if they are right for our property.  List 3 items at your hotel that represent value to the consumer.  A regret is recorded when: –When a guest calls to book a reservation and the hotel is sold out. –When a guest calls to book a reservation and the hotel has availability, but the guest decides not to book.  ___________ is a reservation request not booked due to no inventory available.