PowerPoint Presentation · HITEC ® 2002 Produced by Hospitality Financial and Technology...

HITEC® 2002Produced by Hospitality Financial and Technology Professionals

Revenue Management

Robert A. Gilbert, HSMAI (moderator)Jim Struna, Millennium Hotels & Resorts

Andrew Rubinacci, Six ContinentsValyn Erickson, PwC Consulting


Our Objective• Check in on the “state of” revenue

management in:– Group yield– Catering yield– Internet bookings

• Let you access the consolidated brain trust on the panel with your questions and observations about the discipline


“Flying high with Group RevMax”


Traditional Perceptions

• If it moves “book it”

• Group numbers should be meet at any cost!

• Group is KING!


Fixed Costs• Minimum labor

• Energy

• Mortgage

• Property Tax


• City Wides• History• Repeat Business• Holidays• Length of Stay• Transient Demand• Stay pattern

• Catering Contribution• Group Ceilings• Space Inventory• Demand Forecast• SSG- Select sell

guidelines• Room Release Policy

“Group Levers”


Charting your course• First things first

• Determining where you want to be

• Put a plan into place


Effecting Change• Catering Contribution• Group Ceilings• Space Inventory• Demand Forecast• SSG- Select sell

guidelines• Room Release Policy


Customize!!

• Boeing 777: 800 room hotel in Manhattan with 100,000 square feet in a IACC certified conference center

• MD88 - 400 room hotel in Mid-West with 16,000 of meeting space

• Gulf Stream G4: 340 room beach front resort with 10,00 sq feet of meeting space


One size does not fit all

• Figure the average profitability of each department

• Know your Transient demand


Interfacing

PMS

CRSSCS

BOS

POS

RMS


The Buy

• Know what you want out of a revenue management system

• Look at the factors that effect your size hotel and how your manage

• Make sure it is customizable• Allow of training, and mistakes


Revenue Management = Change

And we are not talking the kind that clinks in your pocket


“On the Road to Catering RevMax”


Traditional “Free Sell” Policies

• 30 day “Free For All”

• Certain function rooms always available to sell

• All evenings and weekends available to sell


“Express Booking Tools”

Catering RevMax GridRoom Rental and Min. Food & Beverage Revenue Guidelines

Meeting Space Occupancy Report

Menu Re-engineering


Main Screen:


Monthly Trends in Banquet Occupancy

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Banquet Occupancy by Meeting Room

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Catering RevMax GridCatering RevMax Matrix

Lead Time to ArrivalTime Period 0-2 weeks 3-4 weeks 30-60 days 60-90 days 90 days or more

# Mtg. Rooms 0-4 5-8 9+ 0-4 5-8 9+ 0-4 5-8 9+ 0-4 5-8 9+ 0-4 5-8 9+100% AM G G G G G G G G G G G G G G G

% of PM G G G G G G G G G G G G G G G

Group 75% AM G Y Y Y Y Y Y Y Y R R R R R RRoom PM G G G G G G G G G R R R R R R

Allocation 50% AM Y R R R R R R R R R R R R R RSold PM G G G G G G R R R R R R R R R

25% AM Y R R R R R R R R R R R R R RPM G G G G R R R R R R R R R R R

RevMax Matrix KeyRed Light Review business at Team Booking Review Meeting; High Risk of DisplacementYellow Light Profitable Booking; Minimal Risk of Displacement; Meets Minimum Revenue and Room Rental RequirementsGreen Light No Risk of Displacement; Accept Minimum Profitability


Minimum Revenue and Room Rental Guidelines

YELLOW LIGHT GUIDELINES - "PROCEED WITH CAUTION"M-F (8-5) PM Only 24 Hour Hold

F&B Min.

1st Quote Lose It F&B Min.

1st Quote Lose It F&B Min.

1st Quote Lose ItBristol Ballroom $4,800 $1,200 $600 $4,500 $750 $375 $4,800 $1,950 $975Bristol I $1,800 $450 $350 $1,625 $300 $225 $1,800 $750 $550Bristol II $1,800 A $450 $350 $1,625 A $300 $225 $1,800 A $750 $550Bristol III $1,800 N $450 $350 $1,625 N $300 $225 $1,800 N $750 $550Canterbury $960 D $300 $250 $900 D $275 $225 $960 D $575 $450Surrey $960 / $300 $250 $900 / $275 $225 $960 / $575 $450Pickwick $960 O $300 $250 $900 O $275 $225 $960 O $575 $450Oxford $375 R $225 $195 $225 R $125 $75 $375 R $530 $275Magnolia $3,900 $1,200 $675 $2,850 $425 $350 $3,900 $1,625 $1,025Windsor I $1,925 $600 $425 $1,500 $215 $175 $1,925 $825 $575Windsor II $1,925 $600 $425 $1,500 $215 $175 $1,925 $825 $575

Yellow Light Profile:Profitable BookingMinimal Risk of DisplacementMeets Minimum Revenue and Room Rental Requirements


Sample ScenariosAirport markets may not choose to open to greenstatus until 1 week lead time versus a secondarymarket may choose to release space further out due toslower inquiry flow.

City-wide Conventions would allow the hotel to release space to green status if Group Allocation is going to be absorbed by the City Wide room block.


• Menu Engineering - Market Specific– Standard Banquet Menus– EMM Menus– Executive / Upscale Group Menus– SMERF Menu– Social / Ethnic Menus– Holiday Menus– Theme Party Menus– Hospitality Suite Menus

Packaging Our Product


Selling Wine in Catering

! Setting the Stage! Menu Re-Engineering! Three Tier Selling Tool! Overcoming Objections

Inclusive Menu with Tiered Wine Strategies


Current MenuCurrent Menu Foodservice Inclusive Menu with Tiered Wine Foodservice Inclusive Menu with Tiered Wine StrategyStrategy

Hotel XHotel X

DINNERDINNER

ENTREESENTREESIncludes Choice of Salad, Chef’s Starch (Baked Potato add $.75) and

Vegetables Rolls and Butter, Dessert, Freshly Brewed Coffee, Decaffeinated Coffee or Tea

CHICKEN AND SHRIMP DUETCHICKEN AND SHRIMP DUETBrandy Cream Sauce with Peppers

$33.00GRILLED CHICKENGRILLED CHICKEN

with Thyme Bordelaise and Roasted Garlic or with Pesto Cream and Roasted Peppers

$27.50

SEARED CHICKEN BREASTSEARED CHICKEN BREASTwith Mixed Mushrooms and Pinot

Noir Sauce

$27.50

ROAST PRIME RIBROAST PRIME RIBAu Jus and Creamy Horseradish

$30.00

FILET MIGNONFILET MIGNONwith Fresh Herb and Creole

Mustard Bordelaise

$33.00

Hotel XHotel X

DINNERDINNER

ENTREESENTREESIncludes Choice of Salad, Chef’s Starch (Baked Potato add $.75) and Vegetables Rolls and Butter, Wine, Dessert, Freshly Brewed Coffee,

Decaffeinated Coffee or Tea

CHICKEN AND SHRIMP DUETCHICKEN AND SHRIMP DUETBrandy Cream Sauce with Peppers

$33.00

GRILLED CHICKENGRILLED CHICKENwith Thyme Bordelaise and Roasted

Garlic or with Pesto Cream and Roasted Peppers

$27.50 Complemented by Burlwood Cellars Chardonnay @ 32.00 or Indigo Hills

Chardonnay @ 33.00

SEARED CHICKENSEARED CHICKENwith Mixed Mushrooms and

Pinot Noir Sauce $27.50

Complemented by Burlwood Cellars Merlot @ 32.00 or Indigo Hills

Pinot Noir @ 33.00

ROAST PRIME RIBROAST PRIME RIBAu Jus and Creamy Horseradish

$30.00 Complemented by Burlwood

Cellars Cabernet Sauvignon @ 33.50 or Indigo Hills Merlot @

34.50

FILET MIGNONFILET MIGNONwith Fresh Herb and Creole Mustard

Bordelaise $30.00

Complemented by Burlwood Cellars Cabernet Sauvignon @ 33.50 or

Indigo Hills Merlot @ 34.50

Re-Engineering Menu Strategies Maximize Success


Revenue management and the Internet


How Online Consumers Use Sites• 69% used a supplier site• 60% used an online travel portal• 24% used a consolidator site, like priceline, hotwire or

HRN• 8% used a travel agent’s site, like americanexpress.Com

Doubling up:• 57% of those who used a supplier site also use

intermediary sites• 23% of those who use supplier sites also used priceline,

hotwire or HRN

Source: Wall Street Journal, 6/10/2002


Online Travel Agency Gross Bookings (Total and Hotel-Only) 2001(ranked by 2001 hotel gross bookings in USD millions)

100%1,97210,100Total7%145618Other

93%1,8279,482Total0%125Trip.com1%14285Cheap Tickets1%1599OneTravel.com1%16325Hotwire2%40800Orbitz9%1741,162Priceline

12%246246WorldRes19%3753,128Travelocity22%4352,903Expedia26%509509Hotels.com

Market ShareHotelsTotal

Source: PhoCusWright


Trends in Inventory Control• HDS/Travelweb• Lowest guaranteed rates• Internet-only rates• Increased site enhancements and site development• Agency-specific site development• Direct connect with agencies and corporate clients


Other Topics• Internet channel costs• Rate integrity• Who books on the internet?• Does the internet generate demand?• Does it encourage ‘price wars’?


1. Q&A and Wrap-up2. www.revmanagement.org

PowerPoint Presentation · HITEC ® 2002 Produced by Hospitality Financial and Technology...

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