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Lecture 5

Lecture 5

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Published by: muitica on Feb 02, 2010
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 Lecture Notes Lecture 5Front Office Management Page 1
Lecture 5
Occupancy reports and forecasts
Occupancy and revenue figuresOccupancy percentages Average rate figuresIncome occupancy percentagesDaily Occupancy ReportsForecasts
Occupancy and revenue figures
These reports are normally prepared during Night audit and areaimed at gauging a hotel's performance. Although some of thefigures produced are specific to revenue from rooms, other figuresfor other revenue departments (eg. restaurants, bars) are alsoproduced and generally compared to occupancy levels.
Occupancy percentages
These percentages are self explanatory1. Room Occupancy (%)Rooms occupied x 100Total rooms available2. Beds (or sleeper occupancy) (%)Beds occupied x 100Total beds available3. Double occupancy (%)Double/Twins let to two (or more) people x 100Total doubles/twins availableThe third percentage may not be required where a hotel has a perroom tariff.
What should be used as a base figure? 
The issue here is which figure we should use as the "available"figure. Some hotels have a policy to consider as available onlythose rooms which are in service, i.e. may be sold. Hotels with thispolicy will therefore not consider unserviced rooms and roomsunavailable for maintenance/refurbishing or staff use indetermining the above percentages - arguing that such rooms arenot available for letting. Not including out-of-order rooms may
 Lecture Notes Lecture 5Front Office Management Page 2
allow managers to artificially increase the calculated occupancypercentages by improperly classifying unsold rooms. Abbott andLewry (page 231) suggest that the base figure should be constant,thereby allowing easier comparison of figures. This way one is ableto see:
The real level of occupancy, even in off peak seasons (whenit is expected that a number of rooms be unavailable due torefurbishment)
The proportion of rooms being used for complimentaries orstaff use.
Proportion of rooms out of service.Similarly, it is suggested that when a room is given out on day letor is occupied with an additional bed (a Z-bed) the base figureshould not be adjusted. The sleeper occupancy percentage mayreveal a percentage higher than 100% in such cases - but thiswould merely reveal that the hotel has managed to "squeeze in"even more sleepers!
Average rate figures
Average rates figures indicate how successful a hotel has been inselling rooms at the highest yield possible (the highest normallybeing a hotel's rack rate). These figures are expressed in currencyand not percentages.1. Average room rate (Lm)Total room revenueTotal rooms let2. Average sleeper rate (Lm)Total room revenueTotal sleepersWhen complimentary rooms are counted within the occupancyfigures these should be taken into consideration when consideringaverage rate figures.
Income occupancy percentages
Abbott & Lewry suggest the use of income occupancy percentagesto allow us to compare a hotel's performance over a period of years.
 Lecture Notes Lecture 5Front Office Management Page 3
Income occupancy percentage (Yield statistic) %Total/Actual room revenue x 100Optimum/Potential room revenueOptimum room revenue is the maximum obtainable given 100 percent occupancy at full rack rates. The optimum room revenue isseasonally adjusted.Abbott and Lewry point out that:Income occupancy percentages assess both our ability to fillthe hotel and our ability to obtain something close to the fullrates for the rooms. A high but heavily discounted occupancypattern would produce a relatively low percentage, as woulda low occupancy pattern at the full rack rate. (p. 233)This indicates the importance of interpreting an income occupancypercentage by comparing it to room occupancy percentages. Theincome occupancy percentage is also known as the Yield statistic.
Daily occupancy reports
These reports vary from one hotel to another. However, this reportshould clearly indicate:
the hotel's performance in terms of rooms, sleepers and roomrevenue on the given day
a comparison with forecasted or budgeted figures.Additionally the report should indicate:
complimentary rooms and rooms occupied for internal use
groups and conferences
comments about the day itself (i.e. events which could havehad a bearing on the occupancy levels, eg. major exhibition)
Here we are concerned with short-term forecasts, normally of between five and days, which are produced on a daily basis byfront office. The forecast is prepared daily and should befrequently updated. This short-term forecast will indicate expectedarrivals and departures. However, it may also be possible (byreferring to previous data) to anticipate and forecast:
the number of extra or unplanned departures likely
the likely no show rate
the likely number of chance guests

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