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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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
“Flying high with Group RevMax”
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Traditional Perceptions
• If it moves “book it”
• Group numbers should be meet at any cost!
• Group is KING!
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Fixed Costs• Minimum labor
• Energy
• Mortgage
• Property Tax
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
• 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”
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Charting your course• First things first
• Determining where you want to be
• Put a plan into place
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Effecting Change• Catering Contribution• Group Ceilings• Space Inventory• Demand Forecast• SSG- Select sell
guidelines• Room Release Policy
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
One size does not fit all
• Figure the average profitability of each department
• Know your Transient demand
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Interfacing
PMS
CRSSCS
BOS
POS
RMS
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Revenue Management = Change
And we are not talking the kind that clinks in your pocket
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
“On the Road to Catering RevMax”
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Traditional “Free Sell” Policies
• 30 day “Free For All”
• Certain function rooms always available to sell
• All evenings and weekends available to sell
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
“Express Booking Tools”
Catering RevMax GridRoom Rental and Min. Food & Beverage Revenue Guidelines
Meeting Space Occupancy Report
Menu Re-engineering
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Main Screen:
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Monthly Trends in Banquet Occupancy
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Room1
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Banquet Occupancy by Meeting Room
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Daytime
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
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.
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
• 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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Selling Wine in Catering
! Setting the Stage! Menu Re-Engineering! Three Tier Selling Tool! Overcoming Objections
Inclusive Menu with Tiered Wine Strategies
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Revenue management and the Internet
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
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
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
Other Topics• Internet channel costs• Rate integrity• Who books on the internet?• Does the internet generate demand?• Does it encourage ‘price wars’?
HITEC® 2002Produced by Hospitality Financial and Technology Professionals
1. Q&A and Wrap-up2. www.revmanagement.org