1. REVENUE MANAGEMENT
Unit VII

2. Revenue Management Formulas
Formula 1: Potential average single rate
Formula 2: Potential average double rate
Formula 3: Multiple occupancy percentage
Formula 4: Rate spread
Formula 5: Potential average rate
Formula 6: Room rate achievement factor
Formula 7: Yield statistic

3. Revenue Management Methods
Capacity management: Balances risks of overbooking against potential loss of revenue from reservation cancellations, early departures, and no-shows.
Discount allocation: Restricts time period and product mix (rooms) available at reduced or discounted rates
Duration control: Places time constraints on accepting reservations in order to protect rooms for multi-day reservations (which represent higher levels of revenue)

4. Revenue Management Formulas
Formula 8: Rev PAR
Formula 9: Identical yields
Formula 10: Equivalent occupancy
Formula 11: Required non-room revenue per guest
Rev PAG
GOPPAR

5. Yield Statistic Formulas
Actual Rooms Revenue
Potential Rooms Revenue
Formula #2
Room Nights Sold Actual Average Room Rate
___________________ X _______________________
Room Nights Available Potential Average Rate
Formula #3
Occupancy Percentage  Room Rate Achievement Factor

6. Occupancy Percentage  Average Daily Rate
Rev PAR Formulas
Formula #1
Actual Room Revenue
Available Rooms
Formula #2
Occupancy Percentage  Average Daily Rate

7. Elements of Revenue Management Strategies
Group room sales
Transient room sales
Other revenue opportunities
Local and area-wide activities
Special events
Fair market share forecasting

8. Revenue Management Meeting Participants
General manager
Sales managers
Catering managers
Reservations manager
Front office manager
Food and beverage manager

9. High-Demand Tactics Close or restrict discounts
Apply minimum length of stay restrictions carefully
Reduce group room allocations
Reduce or eliminate 6 p.m. holds
Tighten guarantee and cancellation policies
Raise rates to be consistent with competitors
Consider a rate raise for packages
Apply full price to suites and executive rooms
Select dates that are to be closed-to-arrivals
Evaluate the benefits of sell-throughs
Apply deposits and guarantees to last night of stay

10. Low-Demand Tactics Sell value and benefits Offer packages
Keep discount categories open
Encourage upgrades
Offer stay-sensitive price incentives
Remove stay restrictions
Involve your staff
Establish relationships with competitors
Lower rates

11. Four Revenue Management Tactics
Hurdle rate
Minimum length of stay
Close to arrival
Sell-through

12. Revenue Management Software
Revenue management software provides:
Continuous monitoring
Consistency
Information availability
Performance tracking
Special reports

13. BIBLIOGRAPHY
Textbook of Hotel Front Office Management & Operations by Manoj Kumar Yadav.
Check-in Check-out Managing Hotel Operations by Gary K. Vallen and Jorome J.Vallen.
Managing Front office Operations byMichael L Kasavana Phd,Richard M.Brooks.
Hotel Front Office Training Manual by Suvradeep Gaurang Ghosh.

14. Bibliography The Hospitality Industry www.hospitalitynet.org