1. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Selling Hospitality Chapter 2 Buyers and Sellers in the Hospitality Industry

2. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Selling Hospitality Order takers Demand creators

3. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Selling Hospitality Order takers Demand creators –“It’s not what you book, it’s when you book it.”

4. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Revenue Management Yield REVPAR

5. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Revenue Management Yield = revenue potential divided by revenue realized REVPAR

6. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Revenue Management Yield = revenue potential divided by revenue realized REVPAR = revenue realized divided by rooms available

7. Copyright © 2006 Thomson Delmar Learning All Rights Reserved To Book or Not to Book Group Business 100-room hotel Forecasted transient demand: –March 31 = 70% –April 1 = 55% Transient rate = $140

8. Copyright © 2006 Thomson Delmar Learning All Rights Reserved To Book or Not to Book Business 100-room hotel Forecasted transient demand: –March 31 = 70% –April 1 = 55% Transient rate = $140 100-room hotel Potential group booking for 95 rooms: –March 31 = 100% –April 1 = 100% C rate = $95

9. Copyright © 2006 Thomson Delmar Learning All Rights Reserved To Book or Not to Book Business 100-room hotel Forecasted transient demand: –March 31 = 70% –April 1 = 55% Transient rate = $140 REVPAR = $87.50 100-room hotel Potential group booking for 95 rooms: –March 31 = 100% –April 1 = 100% C rate = $95

10. Copyright © 2006 Thomson Delmar Learning All Rights Reserved To Book or Not to Book Group Business 100-room hotel Forecasted transient demand: –March 31 = 70% –April 1 = 55% Transient rate = $140 REVPAR = $87.50 100-room hotel Potential group booking for 95 rooms: –March 31 = 100% –April 1 = 100% C rate = $95 REVPAR = $92.25

11. Copyright © 2006 Thomson Delmar Learning All Rights Reserved To Book or Not to Book Group Business 100-room hotel Forecasted transient demand: –March 31 = 70% –April 1 = 55% Transient rate = $140 REVPAR = $87.50 100-room hotel Potential group booking for 95 rooms: –March 31 = 100% –April 1 = 100% C rate = $95 REVPAR = $92.25 Never decline the business; instead, decline the rate.

12. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Characteristics of Organizational Buyers Derived demand Size, frequency, and planning horizon Buyer sophistication

13. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Organizational Buying Process Recognition of needs Request for proposals from multiple vendors Evaluation of alternatives Resolution of concerns

14. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Organizational Buying Process Recognition of needs Request for proposals from multiple vendors Evaluation of alternatives Resolution of concerns Purchase

15. Copyright © 2006 Thomson Delmar Learning All Rights Reserved Pursue Failure Babe Ruth is remembered for the 714 home runs he hit, not for the 1,130 times he struck out.