Fidelio

Fidelio is a complete integrated system package designed to achieve maximum

efficiency of the hotel. Fidelio is premier property management software. The OPERA
Property Management System (PMS) designed to meet the varied requirements of any size
hotel or hotel chain, OPERA PMS provides all the tools a hotel staff needs for doing their
day-to-day jobs, handling reservations, checking guests in and out, accommodating the needs
of in-house guests, assigning rooms and managing room inventory, and handling accounting
and billing. This PMS is produced in Munich, Germany, advanced version 7.11. The demo
version enables the employees to practice and learn in a real life environment.
Its main features are:
1. It is DOS- based and the newer version-OPERA is Oracle based.
2. It can protect its software from all sorts of virus. If a virus enters the system, it is
transferred to a non- usable file from a database file in order to save the other files.
3. It is flexible and easy to use the software.
4. It can be easily operated with a minimum of training inputs.
5. The red alert software can be used for extra protection of files from the virus.

Establishing Room Rates

Room rate refers to the charge of an accommodation that the guest should pay for
using it for a night. The rate of room differs by its type and facilities provided in the room.
The rate of room differs from one establishment to another for the similar type.
Things to be considered while establishing room rates are:

1. Customer’s profile: The guest visiting the hotel should also be considered. Their social
and financial status should be watched carefully i.e. paying capacity should be kept in
mind while fixing the room rates.
2. Standard of service: The type of hotel and its service nature also helps to determine
the cost or the charge of the room. In short, the higher the service standard the higher
the room rate.
3. Competitive: Rate must be competitive to other similar standards hotels. The rates of
room should be able to produce necessary revenue to meet the fixed obligations.
4. Locality: The place where the hotel is located plays vital role in fixing the room rate.
For example; hotel locating near the shopping malls, airports, railway stations etc. have
comparatively higher price than to the hotels located surrounding of non-formal
localities away from city center.
5. Room location: The place or the area of its location of the room directly affects its
price. The dark narrow corridor, small, unsafe etc. room are cheaper comparative to
large, bright facing toward the city centre, mountain etc.
6. Publicity: The publicity or the fame and name of the hotels also act as good source for
its fixing rate. The well renowned hotel’s room are comparatively higher than non-
popular hotels.
7. Various amenities: The various amenities like swimming pool, bar, lounge, health
clubs, movie house, hot and cold water, decoration pieces, flower arrangements, beauty
parlor, etc used in hotel helps to determine the room rate.
Ways of establishing room rates

1. Market share approach: In this method, the management looks at similar hotels in the
area and sees what they are charging for the same product. These properties are often
called the competitive set, which is made up of a number of properties in a market that
are a property’s most important competition. The competitive set may be goodwill,
service, rating, location, type, brand and other factor.
According to this approach, the hotels will charge only what the market will accept.
This information is available through various public domain sources and periodic blind
calls to competing hotels. A blind call does not identify the hotel making the call and
simply asks for availability and rates on specific dates.

2. Rule of thumb approach: This approach is one of the oldest and universal method of
determining the room rate. This method sets the rate of a room at Rs.1/- for each
Rs.1000/- of construction and furnishings cost per room assuming a 70% occupancy.
For example, if the average construction cost of a hotel room is Rs.80000/-, the average
room rate will be Rs.80/- according to this method. The emphasis on the hotel’s
construction cost fails to consider the effects of inflation. It also fails to consider the
contribution of other facilities and services towards the hotel’s desired profit.
3. Hubbart formula approach: This formula was derived by Mr. Roy Hubbart, chairman
of American Hotel and Motel association (AHMA) in 1940. To determine the average
price for selling the room, this approach consider operating cost, desired profit and
expected number of rooms to be sold. In short,

O perating cost
Averege room rate=
Expected no . of occupied rooms∈ a year
The Hubbart Formula approach involves the following eight steps:

1. Calculate the hotel’s desired profit by multiplying the desired rate of return (ROI) by
the owner’s investment.
2. Calculate pretax profits by dividing desired profit (Step 1) by 1 minus the hotel’s tax
rate.
3. Calculate fixed charges and management fees: This calculation includes estimated
depreciation, interest expense, property taxes, insurance, building mortgage, land, rent
and management fees.
4. Calculate undistributed operating expenses: This calculation includes estimating
expenses for the following categories – administrative and general, information
technology, human resources, transportation, marketing, property operation and
maintenance, and energy costs.
5. Estimate non-room operated department income or loss, that is, food and beverage
department income or loss, telecommunications department income or loss and so on.
6. Calculate the required rooms department income: The sum of pretax profits (Step 2),
fixed charges and management fees (Step 3), undistributed operating expenses (Step 4),
and other operated department income (Step 5) equals the required rooms department
income.
7. Determine the rooms department revenue: The required rooms department income (Step
6), plus rooms department direct expenses of payroll and related expenses, plus other
direct operating expenses equals the required rooms department revenue.
8. Calculate the average room rate by dividing rooms department revenue by the expected
number of rooms to be sold.