17501

BABHM, 7th Semester

CH3386
23rd August, 2020

Answerscript_00017501
Question 1

Use the concept of Fair Market Share, Actual market Share and RevPAR to calculate and rank the hotels
in order of performance through spreadsheet (Representing FMS, AMS & Rev PAR). Evaluate your
market position with proper reasoning if you are the General Manager of Hotel Yellow Pagoda and
suggest measures to elevate your positioning in the competitive set. What strategies can be applied for
the better performance? Explain.

Answer:
Hotel Name Available Average Daily PotentialRev Occupied Actual
Room rate enue  Rooms Revenue
Surya Int'l 120 1978 237360 92 181976
Yellow Pagoda 145 1682 243890 110 185020
Himalaya Int'l 180 1727 310860 110 189970
The Grand 210 1860 390600 172 319920
Norling  160 1371 219360 140 191940
TOTAL 815 1068826

RANK
Hotel Name FMS AMS RevPAR
Surya Int'l 5 5 2
Yellow Pagoda 4 4 3
Himalaya Int'l 2 3 5
The Grand 1 1 1 Fair Market Share
Norling  3 2 4

Surya Int'l Yellow Pagoda

Himalaya Int'l The Grand
Norling 
From the view of GM of Hotel Yellow Pagoda, taking consideration of calculated FMS,AMS and RevPAR, Hotel
4th and 3rd respectively in comparison to competitors which is not as good as others. Hotel could have focuse
market. We can utilize our available resources effectively and efficiently to upgrade our market position. Howe
The best strategies are based on the understanding that hotel pricing is fluid, and can change from one day to
be afraid to increase your rates. Customers actually expect increases over time, most businesses where consum
prices based on demand and shifts in costs.
1. Better manage resources
2. Protect against rostering too many staff during slow periods
3. Ensure adequate numbers of staff are working during the busiest times
With all this in mind, revenue management can drive the entire business plan when implemented effectively. H
part of revenue management plan. Making sure our hotel are on the internet distribution channels that promo
strong marketing power and can put our hotel in front of many customers we can’t contact directly.
 rank the hotels
. Evaluate your
agoda and
n be applied for

Fair Market Actual Market Rev PAR

Share Share
14.72 0.170 1516.47
17.79 0.173 1276.00
22.09 0.178 1055.39
25.77 0.299 1523.43
19.63 0.180 1199.63
100.00

Actual Market Share

ir Market Share

a Int'l Yellow Pagoda Surya Int'l Yellow Pagoda

alaya Int'l The Grand Himalaya Int'l The Grand
ng  Norling 
 ted FMS,AMS and RevPAR, Hotel Yellow Pagoda comes at rank of 4th,
s others. Hotel could have focused on multiple aspects to lead the
pgrade our market position. However, the given result isn’t satisfactory.
and can change from one day to the next. This is why we should never
me, most businesses where consumers spend money are varying their

n when implemented effectively. Hotel distribution strategy is also a vital

distribution channels that promote our destination online. They have
e can’t contact directly.
 Question 2
A hotel achieves the following (mentioned in table below) occupancy level, and the average daily rate (ADR) on the given
the General Manager of the hotel was approached by two different parties with an offer to buy certain rooms at certain
situation and logically explain your judgment of accepting or rejecting the offers. [20 marks]

Occupancy Average Daily

Days
Percentage Rate (ADR)
Mon, Tue & Wed 40% 3500
Thursday 60% 4600
Fri & Sat 90% 6000
Sun 100% 8000
Offer I: 60 % of the rooms every night of the week throughout the year at ADR of 5000
Offer II: 50% of the rooms on Mon, Tue, wed at ADR of 3000 & 80% of the rooms on Thu, Fri, Sat & Sun at ADR of 9000 th
Graphically Represent through spreadsheet, the Current & offered Occupancies and Revenue generation

Answer:

Occupancy Average Daily Occupancy Offer Rate Occupancy

Days
Percentage Rate (ADR) % offer 1 1 % offer 2

Mon, Tue & Wed 40% 3500 60% 5000 50%

Thursday 60% 4600 60% 5000 80%
Fri & Sat 90% 6000 60% 5000 80%
Sun 100% 8000 60% 5000 80%
TOTAL

Chart table of Revenue earned

2500000

2000000

1500000

1000000

500000

0
Current Revenue earned Revenue earned in offer 1 Revenue earned in offer 2

Mon, Tue & Wed Thursday Fri & Sat

Sun TOTAL
From a Manager point of view, I would definitely accept offer 2. As we can see chart how profitable it can be after accepti
was just $1756000 before, with proposal 1, we could earn $12000000 but with offer 2 we can increase revenue by double
definitely accept proposal 2 to enhance out hotel revenue. Given Chart flow of revenue is the reason I would reject offer1
he average daily rate (ADR) on the given days of the week. Yourself, as
an offer to buy certain rooms at certain ADR's every week. Analyze the
[20 marks]

on Thu, Fri, Sat & Sun at ADR of 9000 throughout the year
and Revenue generation

Revenue Revenue
Offer Rate Current Revenue earned in
earned in
2 earned offer 1 offer 2
3000 140000 300000 150000
9000 276000 300000 720000
9000 540000 300000 720000
9000 800000 300000 720000
1756000 1200000 2310000

enue earned

ed in offer 1 Revenue earned in offer 2

ursday Fri & Sat

OTAL
 art how profitable it can be after accepting proposal. Revenue earned
ffer 2 we can increase revenue by double i.e. $2310000. I would
venue is the reason I would reject offer1 and accept offer 2.
Question.3

For the night of 1st February, Opera shows 258 stayovers from previous night. On 1st February, there are 120 scheduled
estimate overstays will be at a rate of 3% and under stays at 4%. There are also 160 new reservations expected to arrive
FOM you are working on a 42% no-show rate and 5% cancellation rate. Are you full booked for 1st February? The hotel h
and ADR is $ 95 calculate daily room revenue of 1st February. Use appropriate formulas to calculate values. Explain your

Answer:

OPERA HOTEL
Date: 1st February ,2020

Total rooms 400

ADR $95 $38,000 (Potential Revenue)
Staysover before 258
Scheduled checkouts 120
Staysover after checkouts 138
Estd. overstay rate 0.03 4.14 ( in number)
Estd. understay rate 0.04 4.8 ( in number)
New expected reservation 160
No show rate 0.42 67.2 ( in number)
Cancellation rate 0.05 8 ( in number)

Occupied room (before) 138

Occupied room (after) 261.34
Expected occupancy 346.14
Remaining Room 53.86
Room revenue for 1st Feb $32,883.30
 No, Hotel isn't full booked for 1st February. As per given scenerio, hotel have 400
rooms, out of which 258 is shown as stays-over from previous night and scheduled
checkout is 120 so, stays-over after scheduled checkout is 138. Now remaining
room for reservation is 262. 4 & 4 rooms are occupied and left by stays-over and
stays-under respectively in that day. Expected reservation was 160 out of which 68
& 8 shows no show and cancellation respectively. Hence, for the given day,
expected reservation decreased by 76. At last remaining rooms is counted 53 and
346 is estimated as occupied. Lastly, report concluded by calculating daily room
revenue earned by 1st February. It is calculated by hotel's average daily room rate
by its occupancy rate and it shows revenue of $32,883.30. Hotel wasn’t fully
occupied, it could have earned $38,000. Room sales and revenue could have been
increased through more overbooking, minimizing stays-over rate and by
displacement analysis.
 On 1st February, there are 120 scheduled check-outs. You
o 160 new reservations expected to arrive on the 1st. As
u full booked for 1st February? The hotel has 400 rooms
formulas to calculate values. Explain your calculations.