Vi Semester Fo

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OFFICE MANAGEMENT-VI SEMESTER
Chapter 1
Yield management
THE CONCEPT OF YIELD MANAGEMENT
Introduction
Yield Management, also known as Revenue Management, is the process of

understanding, anticipating and influencing consumer behavior in order to maximize
Revenue or profits from a fixed, perishable resource (such as airline seats or Hotel
Room reservations). The challenge is to sell the right resources to the right customer at
the right time for the right price. This process can result in price discrimination, where a
firm charges customers consuming otherwise identical Goods or services a different
price for doing so. Yield Management is a large Revenue generator for several major
industries; Robert Crandall, former Chairman and CEO of American Airlines, has called
Yield Management "The Single Most Important Technical Development in
Transportation Management since We Entered Deregulation.”
What Is Revenue Management?
Revenue Management: the art of selling the right room, at the right time, to the right
customer, at the right price. Revenue Management is a discipline that has been growing
in popularity amongst all the service industries.
In simple words, having kept the capacity at the same level, firms which have
successfully implemented the concept of revenue management, have increased
revenue per single unit Revenue management can be used in a wide variety of
industries, as long as · The goods or services are highly perishable (a room or a
airplane seat can only be sold today, if unsold, cannot be stored for another day when
demand is high) · it is possible to divide the market in different segment (to go back to
the concept of price discrimination, I can offer a suite to a wealthy individual, quite a few
deluxe rooms to a company organizing a conference for its own managers, and the

This is not an original work, compilations from various sources including books, publications,
documents, WebPages etc. for facilitating curriculum at IHM Bangalore only.
FRONT OFFICE MANAGEMENT-VI SEMESTER
remaining standards rooms to Tour Operator for the tourists looking for a bargain) · the
number of goods on offer are fixed (I cannot build a hotel room overnight)
We can summarize that Revenue Management is the process of understanding,

anticipating and reacting to consumer behaviour in order to maximize revenue or profits
What exactly is the term Revenue Management? For this we examine each word
separately: Revenue according to Webster’s Dictionary may be defined as, “an item or
source of Income.” And Management is defined as, “the act, art, or manner of
managing, or handling, controlling, directing; But Webster’s also continues to define
Management as, “skilful, managing, careful, tactful treatment. Thus combining the two
we get, “Revenue Management is the act of skillfully, carefully, and tactfully managing,
controlling and directing sources of Income. This is incomplete as Revenue is
dependent on three other elements which address price and availability:
• Capacity
• Supply
• Demand
There are various definitions of capacity, but the one that applies here is, “the amount of
space that can be filled”. And we may add-“During that particular time”. For airlines we
define space as seats, in a hotel, rooms.
Economists Define Supply as, “the amount of a good or service that a supplier is willing
and able to sell for any given price, at any given time.’
Demand is said to be the amount of good or service that a purchaser is willing to buy for
any given price at any given time.
Yield Management is particularly suitable when selling perishable products, i.e. Goods
that become unsellable at a point in time (for example air tickets just after a Flight takes
off). Industries that use Yield Management include airlines, Hotels, stadiums and other
venues with a fixed number of seats, and advertising.

Good Yield Management Maximizes (or at least significantly increases) Revenue

production for The same number of units, by taking advantage of The forecast of high
demand/low demand periods, effectively shifting demand from high demand periods to
low demand periods and by charging a premium for late bookings. While Yield
Management Systems tend to generate higher Revenues, The Revenue streams tend
to arrive later in the booking horizon as more capacity is held for late sale at premium
prices.
The concept of Yield Management was initially started by the airlines industry in The
early 1960’, over a period They have Well tuned to change in The demand and
Maximize on seat sharing (with other airlines) & maximum occupied seats & in The late
1980’s Hotels started adopting The various techniques to Maximize Yield. And today the
application of Revenue Management has percolated various sectors of the hospitality
industry viz., restaurants/pubs, shopping malls, exhibition & fairs, Theatres. Today we
have The Revenue manager who work in tandem with The FOM and The Sales
Manager to optimize on The Hotel Revenue.
The Occupancy Crunch of The mid 80’s
To understand why our industry turned to Revenue or Yield Management, We need to

revert back to the good ‘ole days. In The 60’s, the industry consisted primarily of large
city-centre Hotels and small independent Hotels in secondary cities and highways. The
70’s and 80’s saw the growth in the explosive growth of Hotel franchising.
In the years following The expansion of new hotel construction in The 70’s and 80’s, our
industry began to feel The effects of overbuilding; consumers had many more choices
and Hotel demand rapidly declined. The result was that hotels needed to do more to
grow business in this new Competitive environment…a lot more.
With suppressed occupancy demand, it became obvious that hotels could no longer
rely solely on increasing occupancy to improve profits; it became necessary to manage

and control how Room Revenue was generated. We would have to create more profit
from flat or even declining occupancies by managing our inventory and rates.
The goal of revenue management is to strike a balance between maximizing occupancy

and increasing average rates as much as possible.
The Airlines’ Revenue Management Model
With suppressed occupancy demand, overall rate increases would be difficult to sell to a
travelling public which now had more choices; there had to be a better way. In The 80’s,
Hotel experts eagerly watched The airlines’ rate experiment which openly offered lower
fares, to build Their base-business; Then close those lower fares and offer higher fares
for shorter-term bookings. This improved their sales, while sustaining rate growth. Many
people predicted that there would be considerable consumer back-lash.
The result was that the airlines received little negative feed-back; instead consumers
viewed it simply as a means to book lower fares. It’s still common for passengers to sit
together comparing different fares to the same destination; you’ve probably done it
many times yourself.
The airlines were the first, in travel, to realize that The Principle of “supply and demand”
could be used to Maximize Revenue. They realized that selling all their seats at high
prices was nearly impossible most of the time. They needed some way to fill enough
seats to cover expenses; yet have the ability to raise prices after that base is obtained.
Thus, the magic 7 day fare was born. Anyone making a reservation more than 7 days,
in advance of a Flight, got a real deal; after that your reservation is profit and it has
worked for them for many years.
The Principle is the same for Hotels as Well. As occupancy demand increases and
supply (Room availability) decreases, lower rates are closed to sale and only higher
rates are available. Hotels today need a base of business in order to cover Operational
expenses. Selling all one’s Rooms at The same rate rarely produces good occupancy or
a good average rate.

• Occupancy demand is the major difference.

• Higher demand allows for higher rates, plain and simple.
• Seasonal versus Daily Demand
Revenue Management Principles apply to all levels of demand. Resort Hotels with
seasonal rates have been using a form of Revenue Management for years by posting
higher or lower rates based upon seasonal demand; this is the essence of Revenue or
Yield Management. If These Hotels thought they could get “in-season” rates all year
long, they certainly would. They are adjusting for supply and demand.
Yield Management provides the ability to build a “base” of business by posting a wide
range of rates, low to high, to appeal to the broadest range of consumers. For Hotels
which are capable of handling Group business, this is The Theory behind quoting lower
rates for Groups; getting the business on-The-books. Once this base business is
booked, either by Groups or transient individuals, lower rates can then be closed for
sale. This is daily demand.
The key to successful Revenue or Yield Management is to review advance reservations

and make rate close-out decisions as often as might be necessary; generally, three
times per Week. Hotels practicing Revenue Management gain an insight into the ebb
and flow of business, knowledge of reservations booking pace, and a true
understanding of factors which impact occupancy and average rate.
Yield Management is a technique of maximizing Room Revenues. It is also known as

“Revenue Management”. Some Hotels stress on higher occupancy percentage and
some stress on ARR’s & they are willing to sacrifice one for the other. Yield
Management is a combination of both.
The concept of Yield Management is based on the concept of supply & demand. The
basic idea is to have proper pricing strategy that not only consider the existing demand,
but also even influence it for increased profitability.

Revenue Management utilizes intuitive as Well as analytical skills; both of these skill
sets improve with practice. The mind-set of a good Revenue manager or team is
focused on producing a good blend of occupancy and average rate. The Hotel’s mission
should be to build base occupancy, through a good mix of rates, and then take
advantage of having a base by then closing-out lower rates to build average rates.
It is true that many larger Hotels, franchised and Independent, and some Hotel
companies have full-time talented Revenue managers. However, most independent and
smaller Hotels are not using any form of Revenue Management in Their Operations.
Revenue Management, even in its simplest form, can benefit most Hotels no matter
how large or small.
Why Revenue Management?
Segmented Market:
Hotels typically segment Their Market (customer base) into a set of categories based
on the price each category is willing to pay. Typical categories include the business
traveller and the vacation traveller. Because demand patterns for each of these
categories may vary significantly, Hotels find it difficult to satisfy all of the demand
simultaneously. A good example is the comparison between the time-conscious
business executive and the price sensitive vacation customer. The former is willing to
pay a higher price in exchange for flexibility of being able to book a Room at The last
minute while the latter is willing to give up some flexibility for The sake of a more
inexpensive Room. RM tries to Maximize Revenues by managing the tradeoffs between
a low occupancy and higher Room rate scenario (business customers) versus a high
occupancy and lower Room rate (vacation customers). Such a strategy allows Hotels to
fill Rooms that would otherwise have been empty.
Fixed Capacity:

A Hotel’s capacity is relatively fixed - it is nearly impossible to add or remove Rooms

based on fluctuations in demand. If at all Hotel capacity Were flexible, there would be
no need to manage capacity.
Perishable Inventory:
In The Hotel industry, Hotel Rooms are the inventory. A Hotel Room that remains
unoccupied for a night loses all its value for that night. This inventory cannot be stored
and is lost forever. Because RM tries to manage demand instead of supply, it proves to
be good business sense for The Hotel.
Low Marginal Cost:
The fixed cost of adding a Room in a Hotel is heavily capital intensive. However, once
The Hotel manages to cover its initial fixed costs, the cost of serving an additional
customer is low enough that The Hotel can sell The Room at a lower margin if it wishes.
Such a strategy will obviously need to be balanced by one that also seeks to sell The
Room(s) at higher margins. Thus, the high fixed cost/low marginal cost nature of the
business makes price differentiation a necessity something that is made possible by
application of RM.
Advanced Sales:
More often than not, requests for bookings start early. Therefore, Hotels have enough
leeway to adjust Room prices based on the variation between realized bookings and
expected demand. If all Hotel Rooms are sold at the same time, The Hotel does not
have the flexibility to adjust prices upward if demand picks up later. The tradeoffs occurs
when a manager is faced with The option of accepting an early reservation from a
customer who wants a low price, or waiting to see if a higher paying customer will
eventually show up.
Demand Fluctuations:

Demand for Hotel Rooms is characterized by crests and troughs, which The Hotel
factors in during The Room pricing process. In peak season, The Hotel can increase its
Revenues by raising Room prices, while during lean seasons it can increase its
utilization rate by lowering prices. Past data will offer the manager a way to forecast
when these periods of high and low demand may occur. Unfortunately, it is very difficult
to predict the actual demand with a high degree of certainty.
Therefore, the most critical challenge facing The Hotel industry is predicting potential
capacity, and developing a pricing strategy that will encourage maximum capacity and
Revenue.
Revenue Management is based on complex Optimisation methodologies developed

from advanced statistical and analytical models. In order to arrive at a solution,
managers need to evaluate several millions of decisions, which require a significant
investment of skills, hardware and time. Many RM practitioners prefer to breakdown the
actual business scenario into four sub-problems, and then identify an individual solution
to some or all of these sub-problems. This would significantly reduce the number of
potential non-optimal decisions Thereby providing fewer choices, leading to quicker
results.
Data Collection
The Revenue Management process begins with data collection. Relevant data is
paramount to a Revenue Management System’s capability to provide accurate,
actionable information. A system must collect and store historical data for inventory,
prices, demand, and other causal factors. Any data that reflects the details of products
offered, their prices, competition, and customer behaviour must be collected, stored,
and analyzed. In some markets, specialized data collection methods have rapidly
emerged to service their relevant sector, and sometimes have even become a norm.
This data is also utilized for financial reporting, forecasting trends and development
purposes. Information about customer behaviour is a valuable asset that can reveal

consumer behavioural patterns, the impact of competitors’ actions, and other important
market information. This information is crucial to starting the Revenue Management
process.
Market Segment Identification:
The first and foremost step in a Hotel RM System is the identification of the various
Market Segments for The Hotel Room, followed by implementation of a differential
pricing scheme.
“A Market segment is a subgroup of people or organizations sharing one or more

characteristics that cause them to have similar product needs”
The objective in Front of The Hotel is the expansion of its Market and in motivating the
customer to pay more than he/she will usually spend. It is fu further observed that
customers in the business class segment are less sensitive to higher prices as opposed
to those in the vacation segment. An RM System helps Hotels create additional price-
points by building physical and logical fences around the different Market Segments.
Thus:
“Market segmentation is the process in marketing of dividing a market into distinct

subsets (segments) that behave in the same way or have similar needs. Because each
segment is fairly homogeneous in their needs and attitudes, they are likely to respond
similarly to a given marketing strategy. That is, they are likely to have similar feelings
and ideas about a marketing mix comprised of a given product or service, sold at a
given price, distributed in a certain way and promoted in a certain way” This process
leads to targeting and positioning.
The intent is to identify groups of similar customers and potential customers, to prioritise
the groups to address; to understand their behaviour; and to respond with appropriate
marketing strategies that satisfy the different preferences of each chosen segment, in
order to improve Revenue.

Once the different segments for that given good / service have been identified, it can be
designed a method to cater for the different segments at different prices. In this way it is
possible to target a higher number of market segments è customers, charging higher
prices to those segments which are not price sensitive and lower prices to those
segments that are. Managing in an intelligent way the amount of goods / services sold
to each group, it is possible to increase revenue exponentially.
Demand Forecasting:
The next step in an RM process is forecasting demand and pricing of the different
Market Segments. Pricing and demand are inter-related and need to be coordinated. In
The Hotel industry, demand for a Room is cyclic in nature (day of a Week, months of a
year) and follows a trend (demand growth due to economic growth). These forecasts
are seldom precise but provide the decision-maker with an approximate set of inputs
that are used in the planning process. RM models help pinpoint demand by minimizing
uncertainty and producing The Best Possible Forecast.
How Do We Crete A Good Forecast?
• Define the difference between constrained and unconstrained demand

• Describe the different types of forecast
• Estimate the pick up
• Devise a strategy for Groups
• Calculate the repercussions of errors in the forecast
• Being able to estimate errors
Allocation:
The next important step in a RM process is the allocation of inventory (Hotel Rooms)
among different Market Segments. The ratio of discounted versus full priced Rooms is
not fixed during the reservation period; rather, it is “tweaked” appropriately as the date
of stay approaches. The opportunity cost of selling a discounted Room instead of a full
priced one has to be measured in order to make the best decision. Thus, when a

customer approaches The Hotel for a discounted price, the manager needs to evaluate
this scenario with the expected Revenue from another customer who might come at a
later date, willing to pay a higher price for the same Room. The manager would accept
the request only if the discounted price now is more than the expected price at which
The Room might be booked by the second customer. The key word here is expected
Overbooking:
Overbooking is the practice of intentionally selling more Rooms than are available in
order to offset the effect of cancellations and no-shows. Studies estimate that although
a Hotel is fully booked, about 5-8% of The Rooms are vacant on any given date. Poor
overbooking decisions can prove to be very expensive for The Hotel.
It is quite clear that while a Revenue Management System can guarantee increased
Revenues, it can be quite complicated to design and requires high levels of expertise for
implementation. Some of The challenges facing Hotels in The implementation of a
robust and accurate RM System include:
Measuring performance of an RM System is a major issue. Occupancy rates and Yield

are measures that are affected by external competition. An ideal measurement can be
done using an opportunity model that indicates where The Hotel stands in comparison
to its maximum.
Differential pricing is here to stay customers seem resigned to the fact that Hotels
charge different prices for the same Room. However, some customers do not like this
practice and penalize The Hotel by not becoming a patron. Therefore, in a fiercely
competitive environment where quality of service is the key to success, RM may not
work. In evaluating the efficiency of a RM System, The tradeoffs between generating
short-term profits and creating long-term customer loyalty and mindshare needs to be
studied carefully.
From an Operational point of view, RM can impact the motivational level of the
employees. In many cases, RM takes much of the guess work out of employees,

Thereby reducing their decision-making responsibilities. Sometimes, employees taking

reservations are paid a percentage of the sales they make, motivating them to make
Group bookings, which in turn may be contradictory with the objectives of an RM
System.
As part of ongoing changes in the industry, companies throughout the entire hospitality
spectrum are placing a strong emphasis on implementing major Operational changes.
Beyond recognizing that meaningful cost reductions must be achieved without
compromising safety, capacity and service levels, they are also looking at reducing
costs by increasing flexibility and improving asset utilization through a Revenue
Management strategy. In doing so, they continue to reassess their true core
competencies, and are looking to outsource many of these processes, as they look to
optimize business efficiencies and increase profitability
History
Before the emergence of Revenue Management, BOAC (now British Airways)

experimented with differentiated fare products by offering capacity controlled “Early bird”
discounts to stimulate demand for seats that would otherwise fly empty. Taking it a step
further, Robert Crandall, former Chairman and CEO of American Airlines, pioneered a
practice he called Yield Management, which focused primarily maximizing revenue
through analytics-based inventory control. Under Crandall’s leadership, American
continued to invest in Yield Management’s forecasting, inventory control and
overbooking capabilities.
By the early 1980s, the combination of a mild recession and new competition spawned
by airline deregulation posed an additional threat. Low-cost, low-fare airlines like
PeoplExpress were growing rapidly because of their ability to charge even less than
American’s Super Saver fares. After investing millions in the next generation capability
which they would call DINAMO (Dynamic Inventory Optimization and Maintenance
Optimizer), American announced Ultimate Super Saver Fares in 1985 that were priced
lower than the PeoplExpress. These fares were non-refundable in addition to being

advance-purchase restricted and capacity controlled. This Yield Management system

targeted those discounts to only those situations where they had a surplus of empty
seats. The system and analysts engaged in continual re-evaluation of the placement of
the discounts to maximize their use. Over the next year, American’s revenue increased
14.5% and its profits were up 47.8%.
Other industries took note of American’s success and implemented similar systems.
Robert Crandall discussed his success with Yield Management with J. W. "Bill" Marriott,
Jr., CEO of Marriott International. Marriott International had many of the same issues
that airlines did: perishable inventory, customers booking in advance, lower cost
competition and wide swings with regard to balancing supply and demand. Since “yield”
was an airline term and did not necessarily pertain to hotels, Marriott International and
others began calling the practice Revenue Management. The company created a
Revenue Management organization and invested in automated Revenue Management
systems that would provide daily forecasts of demand and make inventory
recommendations for each of its 160,000 rooms at its Marriott, Courtyard Marriott and
Residence Inn brands. They also created “fenced rate” logic similar to airlines, which
would allow them to offer targeted discounts to price sensitive market segments based
on demand. To address the additional complexity created by variable lengths-of-stay,
Marriott’s Demand Forecast System (DFS) was built to forecast guest booking patterns
and optimize room availability by price and length of stay. By the mid-1990s, Marriott’s
successful execution of Revenue Management was adding between $150 million and
$200 million in annual revenue.
A natural extension of hotel Revenue Management was to rental car firms, which
experienced similar issues of discount availability and duration control. In 1994,
Revenue Management saved National Car Rental from bankruptcy. Their revival from
near collapse to making profits served as an indicator of Revenue Management’s
potential.

Up to this point, Revenue Management had focused on driving revenue from Business
to Consumer (B2C) relationships. In the early 1990s UPS developed Revenue
Management further by revitalizing their Business to Business (B2B) pricing strategy.
Faced with the need for volume growth in a competitive market, UPS began building a
pricing organization that focused on discounting. Prices began to erode rapidly,
however, as they began offering greater discounts to win business. The executive team
at UPS prioritized specific targeting of their discounts but could not strictly follow the
example set by airlines and hotels. Rather than optimizing the revenue for a discrete
event such as the purchase of an airline seat or a hotel room, UPS was negotiating
annual rates for large-volume customers using a multitude of services over the course
of a year. To alleviate the discounting issue, they formulated the problem as a
customized bid-response model, which used historical data to predict the probability of
winning at different price points. They called the system Target Pricing. With this
system, they were able to forecast the outcomes of any contractual bid at various net
prices and identify where they could command a price premium over competitors and
where deeper discounts were required to land deals. In the first year of this Revenue
Management system, UPS reported increased profits of over $100 million.
The concept of maximizing revenue on negotiated deals found its way back to the
hospitality industry. Marriott’s original application of Revenue Management was limited
to individual bookings, not groups or other negotiated deals. In 2007, Marriott introduced
a “Group Price Optimizer” that used a competitive bid-response model to predict the
probability of winning at any price point, thus providing accurate price guidance to the
sales force. The initial system generated an incremental $46 million in profit. This led to
an Honourable Mention for the Franz Edelman Award for Achievement in Operations
Research and the Management Sciences in 2009.
By the early 1990s Revenue Management also began to influence television ad sales.
Companies like Canadian Broadcast Corporation, ABC, and NBC developed systems
that automated the placement of ads in proposals based on total forecasted demand

and forecasted ratings by program. Today, many television networks around the globe
have Revenue Management Systems.
Revenue Management to this point had been utilized in the pricing of perishable
products. In the 1990s, however, the Ford Motor Company began adopting Revenue
Management to maximize profitability of its vehicles by segmenting customers into
micro-markets and creating a differentiated and targeted price structure. Pricing for
vehicles and options packages had been set based upon annual volume estimates and
profitability projections. The company found that certain products were overpriced and
some were underpriced. Understanding the range of customer preferences across a
product line and geographical market, Ford leadership created a Revenue Management
organization to measure the price-responsiveness of different customer segments for
each incentive type and to develop an approach that would target the optimal incentive
by product and region. By the end of the decade, Ford estimated that roughly $3 billion
in additional profits came from Revenue Management initiatives.
By 2000, virtually all major airlines, hotel firms, cruise lines and rental car firms had
implemented Revenue Management Systems to predict customer demand and optimize
available price. These Revenue Management Systems had limited “optimize” to imply
managing the availability of pre-defined prices in pre-established price categories. The
objective function was to select the best blends of predicted demand given existing
prices. The sophisticated technology and optimization algorithms had been focused on
selling the right amount of inventory at a given price, not on the price itself. Realizing
that controlling inventory was no longer sufficient, InterContinental Hotels Group (IHG)
launched an initiative to better understand the price sensitivity of customer demand.
IHG determined that calculating price elasticity at very granular levels to a high degree
of accuracy still was not enough. Rate transparency had elevated the importance of
incorporating market positioning against substitutable alternatives. IHG recognized that
when a competitor changes its rate, the consumer’s perception of IHG’s rate also
changes. Working with third party competitive data, the IHG team was able to analyze
historical price, volume and share data to accurately measure price elasticity in every

local market for multiple lengths of stay. These elements were incorporated into a
system that also measured differences in customer elasticity based upon how far in
advance the booking is being made relative to the arrival date. The incremental revenue
from the system was significant as this new Price Optimization capability increased
Revenue per Available Room (RevPAR) by 2.7%.IHG and Revenue Analytics, a Pricing
and Revenue Management consulting firm, were selected as finalists for the Franz
Edelman Award for Achievement in Operations Research and the Management
Sciences for their joint effort in implementing Price Optimization at IHG.
HOTEL INDUSTRY APPLICATION
In Hotel industry, Revenue Management is used to determine selling rates for Rooms’
occupancy levels etc., through demand forecasting techniques.
Benefits of Yield Management: -
• Improved forecasting.
• Improved seasonal pricing & inventory decisions.
• Identification of new Market segment
• Identification of Market segment demands.
• Enhanced coordination between Front Office and sales department.
• Improved development of business plans.
How does Yield Management maximize Revenue by controlling forecast information

related to: -
1. Capacity Management
2. Discount allocation
3. Duration of control.
CAPACITY MANAGEMENT
It involves methods of controlling and limiting Room supply, also called selective
overbooking. It balances the use of over-booking Rooms against potential loss of

Revenue from spoilage. It also involves determination of how many walk-ins’ to accept
on a particular day. What category of Rooms to overbook (usually standard Rooms)
taking into consideration The Room position of neighbouring Hotels.
Other forms of capacity management involve determining how many walk-ins to accept
on the day of arrival, given projected cancellations, no-shows and early departures.
Capacity management strategies usually vary by room type. That is, it might be
economically advantageous to overbook more rooms in lower priced categories,
because upgrading to higher priced rooms is an acceptable solution to an overbooking
problem. The amount of such overbooking depends of course, on the level of demand
for the higher priced rooms. In sophisticated computerized revenue management
systems, capacity management may also be influenced by the availability of hotels
rooms at neighbouring hotels.
DISCOUNT ALLOCATION
Discounting involves restricting the time period and product mix (Rooms) available at
reduced prices. For each Room type, reservations are requested at various available
rates, each set below rack rate. The Theory is that the sale of a perishable item (The
guestroom) at a reduced price is often better than no sale at all.
The Primary objective: -
To protect enough remaining Rooms at a higher rate to satisfy the projected demand for
Rooms at that rate, while at the same time filling Rooms that would otherwise have
remained unsold. The process is repeated for each rate level from rack rate on down.
A second objective of limiting discounts by Room type is to encourage up-selling. This

technique requires a sound estimate of price elasticity and the probability of upgrading.
DURATION CONTROL

Duration control places time constraints on accepting reservation in order to protect

sufficient space for multi-day request. This means that, under Yield Management, a
reservation for a one-night stay may be rejected, even though space is available.
Example: If Wednesday is close to selling out but other nights are not, a Hotel may want
to optimize The Revenue potential for The last few Rooms on Wednesday by requiring
multi-day stay, even at a discounted rate, rather that accepting reservations for
Wednesday only.
COMMON ATTRIBUTES OF REVENUE MANAGER
QUALITIES & MANAGERIAL SKILLS:
Ability to manage from 3 to 8 varying property types
1. Strong understanding of managing online distribution channels

2. Pace and Rate Strategy analysis
3. Competitive Set analysis
4. Strong communication and persuasion skills via phone/e-mail
5. Professionalism and desire to achieve greatness
6. Grow, develop and strengthen relationships from clients to vendors
7. Ability to clearly and concisely present technical subjects
BUSINESS SKILL:
• Strong leadership and analytical skills
• Strong technical skills
• Excellent time Management skills
• Work with limited support
• Strong organizational skills
• Excellent knowledge of computers
• Exceptional detail in follow-up

• Ability to produce consistent profits

• Resolve problems
• Assume responsibility/ accountability
• Ability to quickly evaluate alternatives and decide on a plan of action
• Think creatively, self-motivated
• Juggle and balance needs of our clients
EVENTS CALENDER
An indispensable tool for Revenue Management is a Calendar of Events because it can

help to evaluate demand of a local Market. Business Meetings on The occasion of trade
fairs and congresses are main reasons to travel .
REVENUE MANAGEMENT SOFTWARE
There are many companies that offer a variety of Revenue Management software
programs designed for lodging companies. Although the individual tasks of Revenue
Management can be performed manually, the most efficient means of handling data and
generating Yield statistics is through Revenue Management software. Revenue
Management software can integrate Room demand and Room price statistics to
simulate high Revenue-producing product scenarios.
Revenue Management software does not make decisions for managers. It merely
provides information and support for managerial decisions. Since Revenue
Management is often quite complex, Front Office staff will not have the time to process
the voluminous data manually. Fortunately, a computer can store, retrieve, and
manipulate large amounts of data on a broad range of factors influencing Room
Revenue. Over time, Revenue Management software can help Management create

models that produce probable results of decisions. Decision models are based on
historical data, forecasts, and booked business.
RESULTS
In those industries where computer-based Revenue Management has been applied, the
following results have been observed:
• Continuous monitoring: A computerized Revenue Management System can track

and analyze business conditions 24 hours a day, seven days a Week.
• Consistency: Software can be programmed to respond to specific changes in
The Marketplace with specific corporate or local Management rules resident in
the software.
• Information availability: Revenue Management software can provide improved
Management information which, in turn, may help managers make better
decisions more quickly.
• Performance tracking: A computer-based System is capable of analyzing sales
and Revenue transactions occurring within a business period to determine how
Well Revenue Management goals are being achieved.
• Revenue Management software is also able to generate an assortment of special
reports. The following are representative of Revenue Management software
output:
• Market segment report: Provides information regarding customer mix. This
information is important for effective forecasting by Market segment.
• Calendar/booking graph: presents Room-nights demands and volume of
reservations on a daily basis.
• Future arrival dates status reports: Furnishes demand data for each day of The
Week. This report contains a variety of forecasting information that enables the
discovery of occupancy trends by comparative analysis of Weekdays. It can be
designed to cover several future periods.

• Single arrival date history report: Indicates the Hotel's booking patterns (trends in
reservations). This report relates to the booking graph by documenting how a
specific day was constructed on the graph.
• Room statistics tracking sheet: This tracks no-shows, guaranteed no-shows,
walk-ins, and turn-always. This information can be instrumental in accurate
forecasting.
Since Management is interested in Revenue enhancement, computer-based Revenue

Management has become a popular hospitality industry software application.
Just one example of Revenue Management software is Easy Revenue Management

Solutions.
Measuring Yield
Various formulae
1. Occupancy Percentage = Number of Rooms sold X 100
Number of lettable Rooms
2. Double Occupancy Percentage = Number of guests- No. of Rooms sold X 100
Number of Rooms sold
3. Average Room Rate (ARR) = Total Room Revenue
Number of Rooms
4. Revenue Per Available Room (RevPAR) = Actual Room Revenue
Number of available Rooms
RevPAR = Occupancy percentage X ADR
5. Room Rate Achievement Factor = Actual Average rate

Potential Average Rate
6. Yield = Room Revenue realized X 100
Room Revenue potential
Or
= Occupancy percentage * Achievement factor
Or
= Room nights sold X Average room rate

Rooms available Potential average rate
7. Potential Average single rate =
Room revenue at single occupancy at rack rate
Number of rooms
8. Potential average double rate=
Room revenue at double occupancy at rack rate
Number of rooms
9. Rate spread = Potential average double rate - Potential average single rate
10. Potential average rate =
(Multiple occupancy percentage X Rate spread) + Potential average single rate

11. Room rate achievement factor = Actual average rate X100
Potential average rate
12. Identical yield occupancy percentage =
Current occupancy percentage X Current average rate X100
Proposed average rate
13. Equivalent occupancy percentage =
Current occupancy percentage X Current contribution margin X100
Proposed contribution margin
Contribution margin = Room rate – Marginal cost
14. CMRw =
Total non-room revenue-total non room revenue variable center costs
Total non-room revenue
Elements of Yield Management
1. Group Room sales
The following parameters have to be analyzed for a Group sale.

Group booking data
Analyze The Group’s previous business profile if any as to whether overestimate or

underestimate Room requirements. Then adjust expected reservations. Groups usually
tend to overbook or block 5% to 10% more Rooms than they are likely to need, “wash
factor” – The Hotel’s deletion of un-necessary Group Rooms from a Group block. One
must be careful of wash factor to avoid too much of over-booking.
Group booking pace
The rate at which Group business is being booked. Once a Hotel has accumulated
several years of Group booking data it can identify a historical trend that reveals a
normal booking pace for each month of the year.
Anticipated Group business
Meeting held by national, regional state and other major corporation, etc fall on a set of
pattern of locations & meeting trends. Even if they do not enter into contract with The
Hotel but tentatively bookings awaiting final negotiations and confirmation should also
be included in the analysis.
Group booking lead-time
A measure of how far in advance of a stay, bookings are made. One should know his
Hotel’s lead time for Group bookings so that booking trends can be charted. Booking
trends can be combined with booking pace to illustrate the rate at which Hotel is
booking Group business compared to the past. This information can be utilized for
determining whether to accept or reject an additional Group and at What Room rate to
book it.
The primary challenge in Revenue Management for Group business involves The
forecasting related decision whether to accept reservations that are made anywhere
from six months to two years in advance of The arrival date. When deciding whether to
accept The Group’s offer Hotels must first forecast the relative value of business as

compared to the other, potentially higher paying Groups to transient guests who books
nearer to the time of arrival. Second, once a Group reservation is accepted, Hotels have
to forecast Room block utilization to ensure that Rooms will be filled or released for sale
to transient guests.
Setting Group rates
• The rates requested by The Group
Considerations here included forecasted Revenue or contribution from the transient

segment, the arrivals and the occupancy forecast. (Transient guests and booked
Groups), and reservations on hand.
• Potential Revenue or contribution from The Group.
Most Hotels consider The Group’s potential Revenue or contribution including the
banquets and meeting space rents.
• Competitor information
• Other inputs
• Other considerations included historical Group demand, both overall and from a
given Group, The Group profile (The stay pattern) and the potential or future
business from The Group. Some Revenue managers also look at Group specific
historical demand, Market wide demand, the potential of The Group to increase
Market share, and The Market share of The Hotel as rate setting factors.
Group Forecasting
History and current Group status emerged as the key inputs to Group forecasting for
both respondent Groups along with specific Group characteristics, external information
and the time period.
History

This refers to The Groups’ past booking pace, pick up, utilization, and no show rate (or
wash rate).in the absence of direct historical data, the respondents look to similar type
of Group to predict Group utilization.
Current Group Status
The respondents refine Group forecasts using current reservations on The books and
The Group’s pick up and booking pace as Well as communications with The client
whether direct or indirect. There are many things to look at: on the gooks compared to
contract, booking pace, Group history, recent Groups that matched a similar style and
inputs from the sales team.
Specific Group Characteristics
Some managers take into account such characteristics as
The meeting’s purpose, and schedule and whether The Group block is a citywide block
or an in-House Rooming list (since citywide block is more likely to wash than an in-
House Rooming list).
External Information
Like general demand trends, and rate and inventory availability across Hotels in The
Market in addition to rates and availability in related sectors like airlines.
Time Period
A number of Revenue managers forecast take into account the day of The Week and
The time of the year e.g. season or holidays
2. Transient Room Sales
Transient Rooms are those Rooms sold to free independent travellers. Transient
business is usually booked closer to the date of arrival than Group business. A
commercial Hotel may book a majority of its Group business three to six months before
arrival, but book transient business only one to three Weeks before arrival. At a resort

Hotel, for example, Group bookings maybe established one to two years in advance,
while transient business may be booked three months in advance. As with Group
business, Management must monitor the booking pace & lead time of transient
business in order to understand how current reservations compare with historical &
anticipated trends, this leads to the more complex subject of transient Room pricing.
Another issue to consider in transient Room sales is the discounting offered to certain
sources of business. Discounts can be offered to corporate & government travellers, as
Well as senior citizens, military & airlines personnel, & others.
Business ethics should be included in any discussion of Yield Management. If a guest

Room is classified as superior Room, There should be good reason for it.
3. Food & Beverage Activity
Banqueting and catering functions are a major part of F&B Revenue and have an effect
on Room Revenue. For example, if a banquet with no guestroom requirement is
occupying The Hotel’s conference Room, a Group needing 50 guestrooms and a
meeting hall may have to be turned away. In most cases, The Group needing both
catering and guest Room space will be more profitable. Therefore, local food &beverage
functions should be viewed in light of The potential for booking Groups that need
meeting space, food & beverage service, and guest Rooms. Cooperation and
communication between departments is necessary to Maximize Revenue from all
Revenue centers in The Hotel.
4. Local and Area-Wide Activity
Local and area-wide activity conventions can have dramatic effects on The Yield
Management strategies of a Hotel. Even when a Hotel is not in the immediate vicinity of
the convention, transient guest and smaller Groups displaced by the convention may
book at The Hotel due to Room availability. When this is the case, The FOM should be
aware of the convention and the demand for guestrooms it is creating in the area. If the

demand is substantial, transient and Group rates should reflect this fact to take full
advantage of the opportunity.
5. Special Events
Special events such as concerts, festivals, and sporting events are held in or near a
Hotel. The Hotel may be able to take advantage of this by controlling discounts or
requiring a minimum length of stay. This is a common practice, for example, during
Christmas at many resorts. Guest wishing to stay over Christmas may be required to
guarantee a four-or five-night minimum stay. Similarly, in case of international sporting
events (Olympics, Commonwealth games, World cup soccer) discount on Rooms may
be eliminated, as there is a temporary surge in demand for those days of the event.
These are sound Yield Management tactics, but they must be managed carefully so The
Hotel does not alienate regular guests.
6. Fair Market Share Forecasting
One of The other important elements of Revenue Management is, understanding how
well the Hotel is doing in relation to the competition. This is known as the fair Market
share. It is important to know whether the rates quoted are being Competitive and
whether The Hotel is actually getting its fair share of its available business in a Market.
A primary tool for analysis is The Smith travel Accommodations Report, or STAR report.
The STAR report is historical, so the information it provides tells us Hotel Management
how Well Their Revenue Management strategies and tactics worked in the past. By
reviewing the past, however the manager can make key decisions on how The Hotel
should be positioned in The future. The key statistic in The STAR report is RevPAR
index. This statistic tell Hotel Management whether The property received its fair share
of The business for The period reported compared to its competition .for example if The
property has 100 percent RevPAR index, it would have received its fair share of
business for The Market.
RevPAR index = (Hotel RevPAR/Competitive set RevPAR) X 100

Using Yield Management
Potential High & Low Demand Tactics
Yield Management required each Hotel to determine its strategies for both high and low
demand periods. In The case of high demand peaks, The Theory is to increase Room
Revenue by maximizing average Room rate. Transient and Group business Market
Segments may each call for a unique, specific strategy.
Implementing Yield Strategies
Once all this revenue management information has been organized and analysed the
front office manager must determine what rates will the hotel use on any given day.
Certain strategies and tactics come with warnings. Applying restrictions too rigidly can
actually discourage business. Managers must certainly keep in mind that the ultimate
goal is to meet guests’ needs. Any tactic fail to do so will not produce the desired result.
Too much revenue management can as ineffective as no revenue management. That
being the case there are four tactics that must be applied carefully.
Hurdle Rate
Rack rates are always left open whether the demand is high or low. Then the front office
manager must set the lowest rate for a given date based upon anticipated demand.
Rates that fall below this will not be offered. This is sometimes called HURDLE RATE
OR BAR (BEST AVAILABLE RATE) .Any ate below the hurdle rate should not be
offered. Hurdle rates can fluctuate from day to day depending upon the hotel’s desired
yield and market conditions. Staff may be offered incentives for selling above the hurdle
rate. Incentives may be provided for long-stay guests.
How to communicate Hurdle rates?
Post those in reservation and at reception. Computers may automatically display them.
The Yield strategies may change several times during a single day & it must be
communicated to the staff.

Availability Strategies
Minimum Length of Stay: A reservation must be for at least a specified number of

nights in order to be accepted. It helps a Hotel to develop a relatively even occupancy
pattern. Common for resorts during peak periods. May also be used during special
events or high occupancy period by other Hotels. This is intended to keep an occupancy
peak on one day from reducing occupancy on the days before or after the peak.
The use of minimum length of stay requirements is intended to keep an occupancy peak
on one day from reducing occupancy on the days before and after the peak. This
strategy must be applied with great care. With a strict minimum stay requirement,
profitable guests who don’t want to stay for the required time may choose to take their
business elsewhere. This strategy should be applied only when it will encourage
additional business rater than frustrate business .To ensures that the strategy is
working, managers can check denials and regrets on a daily basis.
Close-To-Arrival Strategy: This allows reservations to be taken for a certain date as

long as the guest arrives before that date (to avoid strain on that day due to too many
check-INS)
Sell-Through Strategy: Works like a minimum length of stay requirement except that
the length of the required stay can begin before the date, the strategy is applied. This
strategy is effective when one has a peak in occupancy and The Management does not
want the peak to adversely affect reservations on other side of the peak days.
The Revenue Management Team
Those individuals that participate in the process Of revenue management are referred
to as the Revenue Management Team or RMT. Some RMT members just provide
marketing or competitive intelligence along the path, while others are instrumental in the
developing, executing and evaluating strategies and tactics for the upcoming year.
Those personnel’s that are directly involved in the Revenue Management Process are:

• The General Manager

• The Director Of Sales
• The Controller
• The Director of Revenue Management
• The Revenue Manager
• The Revenue Agents
• The Reservations Manager
• The Reservations Sales Manager
• The Reservations Sales Agents
• The Front Office Manager
• The Director Of Rooms Division
The Composition of the RMT may vary from the Individuality of the Hotel and its needs.
The Hierarchy of The RMT varies from Hotel to Hotel; some hotels have the director of
sales and revenue management in a position higher than the GM, Operating in the
corporate level. In the organization Chart Given Is a Standard Hotel RMT Where the
members may be playing a role either in data collection or in the actual Strategising and
implementing of Revenue tools
Roles and Responsibilities of a Revenue Manager
• It may appear daunting at first to consider all the tasks that a Revenue Manager
or Director needs to perform. However, these can be broken down on a daily, a
weekly, a monthly and an annual basis to make it become quickly achievable.
• The first task that a revenue professional will usually perform in the morning is a
quick analysis of the flash report.
• The Revenue Director should immediately address any major deviations from
expectations that occurred and find out their cause. Any deviation between
forecast and actual production is recorded on a variance report.

• To make sure that all the adjustments needed to be made, ensure that these
issues do not impact upcoming demand.
• The Revenue Manager must prepare the short term 3-5 day forecast by utilizing
the most currently received data.
• He should adjust the next 90-day forecast based upon the most current data.
• All the selling strategies in place for the next 90 days should be reviewed to
ensure their continued application. Any needed changes to selling strategies
should be made in the appropriate channels.
• On a weekly basis, the Revenue Director will review and asses a series of
reports.
• He or she must review the pickup activity by day for the 90-day forecast period.
[Pickup refers to the number of rooms sold. If 10 rooms were reserved yesterday
for September 1 and this morning there are 16 rooms reserved for September 1,
then the daily pickup for that day was6 rooms.]
• Next, cut-off date and group block pickup are reviewed to determine the action to
be taken. [A cut-off date is the date that all unconfirmed reservations will be
released to general inventory for resale.]
• The Revenue Director would prepare a midterm forecast generally covering 10-
14 days and review the accuracy of the previous week’s forecast.
• The Revenue Director must make sure that a check must be made on peak and
weak periods occurring in the next 6 to 12 months. All selling strategies for those
dates must be reviewed and adjusted as needed.
• The Revenue Director should review all third-party vendor reports to assess how
the organization fared over previous week in market and competitive set
performance.
• Tracking reports should be analyzed to determine where the organization’s
business is emanating from to seize any potential opportunities arising from the
appearance of effectiveness of pricing strategies should also be determined.

• Most organizations set anticipated production figures of business expected from

their key and target accounts. Each week the Director of revenue should
compare these figures to actual production. Should discrepancies appear,
strategies and tactics may need to be re-evaluated.
• Upon completion of the weekly reviews, the Revenue Director should reforecast
demand based on a rolling 12-month basis.
• All selling strategies should be adjusted as needed to fit the newly projected
demand.
Now, based upon the size of the revenue management team, the size of the
organization, and the amount of resources available, many of these weekly tasks will
also be performed on a monthly basis.
Position Title: Director of Revenue Management
Department: Sales & Marketing
Reports To: Director of Sales and Marketing
ESSENTIAL FUNCTIONS
• Formulate and deploy transient/group inventory restrictions and pricing strategies

to maximise revenue from a rate and occupancy perspective.
• Manage hotel inventory control, including stay controls, open/close status.
• Achieve and maintain rate integrity within all distribution channels. Minimize rate
issues with group contracts.
• Grow market share.
• Grow ADR over budget with the corporate and leisure discount market segments
through promotions with our e-commerce partners.
• Secure relocation rooms in the event of a relocation.
• Provide “walk day” support for the front office team.
• Train and mentor reservation manager to maintain and exceed current service
levels in the reservation departments.

• Ownership of rate integrity throughout the distribution system.

• Compile revenue and occupancy pace and forecast reports ; market segment
(group and transient) pace, transient sub market segment pace, daily revenue
pace report, daily inventory pickup, 10 day and 4 day forecast via reservation
manager.
• Compile 90 day forecast report in accordance with the scheduled deadline.
• Consult with sales managers on rate/ inventory suitability of all potential group
business that exceeds group selling.
• Conduct displacement analysis utilizing profit calculation.
• Analyse End of Month Reports and compile Revenue Management Recap.
• Manage group block activity. Through Reservation Manager responsible for
management of group cut-off dates, securing and reviewing all rooming lists,
monitoring group block activity. When necessary or appropriate, communicate
with group contacts and/or housing bureaus.
• Participate in Daily Business Review and weekly Marketing Meeting in
accordance with company standards.
• Manage/monitor Central Reservation System and Global Distribution Systems to
maintain consistency and property-level inventory strategies and align with
company’s Best Available Rate pricing philosophy.
• Prepare weekly and monthly occupancy and revenue forecasts. Assist in
preparation of annual budget and Strategic Business Plan.
• Prepare Quarterly Action Plans.
• Prepare Monthly Summary Report.
• Mentor, coach, and supervise Reservations Manager relating to the daily
operation of the Reservations Department. Oversee recruiting, hiring, and
training within the department.
• Oversee divisional matters as they relate to federal, state, and local employment
civil rights law.
• Adhere to Sales and Marketing expense budget.

SUPPORTIVE FUNCTIONS:
• In addition to performances of the essential functions, this position may be

required to perform a combination of the following supportive functions.
• Professionally represent the hotel by participating in and/or conducting client and
industry functions.
• Develop working relationships with managers in the Group and Catering Sales
Offices, providing consultation on strategies for booking optimal group and
catering business.
• Continually monitoring actions of competitive hotels.
Position Title: Revenue Manager
Department: Sales & Marketing
Job Overview:
To manage external and internal programs, processes, systems, inventory, and

information for the Reservation/Sales/Accounting Departments, including rate and
inventory management in all internal and external GDS (global distribution system),
ADOS (alternative distribution system), website and other distribution partners. This
includes all pricing for all the products, packages, room inventory and amenities sold in
and through reservations. This position is to provide analysis, reports, information, and
data that allows the property management and staff to optimize and maximize its room
inventory sales, revenue and services, which includes Group and FIT travel sales,
wholesale and other market.
STANDARD SPECIFICATIONS:
Requirements are representative of minimum levels of knowledge, skills and/or abilities

to perform this job successfully. The associate will possess the abilities to perform each
duty proficiently.

ESSENTIAL JOB FUNCTIONS:
• Develop and maintain a record and reporting system which provides current and
historical data for analysis on sales, inventory of all room types, rates, source of
business, and length of stay patterns.
• Manage all rates, inventories, and information necessary to represent and sell
the property in all distribution channels including but not limited to the GDS,
Internet—Expedia, Orbitz, HRN, Travelocity, site59 and other alternative and
Internet distribution channels.
• Provide information and reports to the management company as required.
• Review all group billing procedures and group blocks for accuracy and
consistency.
• Maintain an excellent working relationship and information flow process with
accounting, reservations and sales.
• Maintain all contracts, billing procedures and account reconciliation with
wholesalers both domestic and international.
• Find new avenues to produce incremental revenue during soft time periods.
• Participate in and execute some marketing and sales strategies directed to the
FIT and Group and wholesale market segments of the property, including but not
limited to direct mail, packages, web specials, past-guest mailings and
newsletters, communication with domestic wholesalers and travel agents.
• Assist in the development and marketing of FIT travel through input on
packaging, pricing and promotion.
• Maximize homeowner revenue monthly, including identifying “distressed”
properties and using rotation. Responsible for yield management of properties.
• Manage/input homeowner stays via direct calls and owner response forms.
• Manage all reservations changes that occur as a result of properties being added
or removed to the rental inventory.
• Manage complimentary and special rate business.
• Develop and maintain correspondence in SMS.

• Develop and build rate package plans for all reservations.

• Produce a weekly, monthly, and 90 day forecast and distribute to staff. Produce
monthly statistics report, including source code, travel agent and top states
report.
• Have a comprehensive understanding of the property and community activities,
recreation, cultural and dining opportunities.
• Maintain a professional appearance and attitude at all the times in dealing with
clients or potential clients.
• Provide any other reports or information as may be requested.
• Can interface with homeowners, vendors, wholesalers, group contacts and
industry-related contacts professionally and with the ability to handle their needs.
Position Title: Reservation Manager
Department: Sales and Marketing/Front office
Job Overview:
To manage all reservations sales and staff, internal and external programs, processes
systems, inventory and information for the Reservation/Sales Department, including rate
and inventory management. This includes participation in development of pricing for all
products, packages, room inventory and amenities sold in and through reservations.
This position is instrumental in Reservations cross training of all Front Office Associates
and the maintenance of the property’s commitment to exceptional customer service.
STANDARD SPECIFICATION:
Requirements are representative of minimum levels of knowledge, skills, and/or

abilities. To perform this job successfully, the associate will possess the abilities to
perform each duty proficiently.
ESSENTIAL JOB FUNCTIONS:

• Hire and train all Reservation Sales Agents in Springer Miller software,
properties, bookings procedures, the Tariff Book, and other elements of their job
description.
• Develop and implement comprehensive Sales Training with the use of various
training resources.
• Manage block space form wholesalers.
• Develop and maintain a comprehensive resource and training manual that
provides information on the property, its services, amenities, packages, products
and programs.
• Provide information and reports to the management company as required.
• Establish and maintain all group billing procedures and process all necessary
paperwork as outlined and required.
• Maintain an excellent working relationship and information flow process with
accounting and revenue manager.
• Establish and maintain strong relationships with all wholesalers, both domestic
and international.
• Find new avenues to produce incremental revenue during soft time periods.
• Travel if necessary to promote and sell property.
• Participate in and execute some marketing and sales strategies, directed to the
FIT, group and wholesale market segments of the property, including but not
limited to, direct mail, packages, web specials, past guest mailings and
newsletters and communication with the wholesalers and travel agents.
• Develop, implement and oversee the daily routine for the effective operation of
the Sales Department, which includes processing of leads, follow ups,
contracting, and group maintenance.
• Assist the development and marketing of FIT travel through input on packaging,
pricing and promotion.
• Responsible for moving reservations as deemed necessary by General Manager,
Homeowner Relations, Maintenance and Front Desk.

• Develop, manage and execute incentive programs for all personnel in

Reservation Department.
• Coordinate/communicate with Group Sales Manager as it related to room blocks
and group reservation.
• Attend weekly departmental and staff meetings.
• Develop and manage reservations agents, conversion ratios. Track phone
volume.
• Have a comprehensive understanding of the property and the community
activities, recreation, cultural and dining opportunities.
• Maintain a professional appearance and attitude at all times in dealing with
clients and potential clients.
• Provide any other reports or information as maybe requested.
Revenue Management Meetings
One essential duty on the job descriptions that we have not yet addressed is the subject
of meetings. Meetings are a daily event in nearly every large organization and occur
with varying frequencies in similar ones. We have started all along that revenue
management is a team process. So the team coming together to assess information
and then revenue and adjust strategies and tactics is critical to obtaining optimal
revenue management success.
Many hospitality organizations have a daily meeting to assess the previous day’s
activity and prepare for the upcoming day. Depending upon the size of the organization
and the efficiency of the RMT, this meeting will range from 15 minutes to 2 hours each
day. In addition to its immediate needs, the team reviews changing forecast information
and suggests possible adjustments to rates and inventory in the various channels.
Displacement analyses are conducted on any group business pending decision. During
group displacement analysis, the organization needs to determine the total customer
worth of two or more competing pieces of business and select the business which will
generate the highest total customer worth. It should be noted that displacement

analyses may also apply to individual transient business. It is important that an

organization calculate the total customer worth of its various market segments and sub
segments to facilitate future displacement analyses.
RMT ROUITNE AND SCHEDULE
Daily Activities
• Review daily activity from previous day

• Prepare short term(3-5 day) forecast
• Review previous day booking report
• Review availability for next 90 days in all systems
• Evaluate strategies for next 90 days
• Implement changes to selling strategies in all systems
• Meet with Reservation Manager to reaffirm selling strategies.
Review and track reservations call statistics from prior day, including:
1. Number of calls to reservation office

2. Number of calls answered in reservation office
3. Number of calls converted to bookings (conversion ratio)
4. Lost business reports, denial and regret reports.
5. Review group block and pick up for the next 30 days
6. Meet with Front Office Manager to discuss that day’s selling strategies.
7. Review competitors’ rate strategies
8. Attend the daily business review meeting
Weekly and Monthly

1. Review room picked up by the day for the next 90 days since prior review
2. Review group cut off dates
3. Review group blocks and pick up for the next 90 days

4. Analyse the variance from forecast to actual production from last week or last
month
5. Prepare midterm (10-14 day) op monthly forecast coming
6. Evaluate peak and weak demand periods for the next 6 to 12 months adjust
selling strategies and tactics as needed.
7. Review channel reports to evaluate market and competitive performance.
8. Track and review sources of business from the following:
9. Geographic location
10. Mode of transportation
11. Channel or booking method
12. Reason for travel
13. Rate plans booked
14. Evaluate key account production and compare to established target.
15. Meeting with other property departments to discuss additional revenue
opportunities.
16. Evaluate 1-800 number logs.
17. Reforecast for a rolling 12-month period and adjust selling strategies and
tactics as indicated.
18. Attend weekly yield meeting and weekly group business review meeting.
19. Attend monthly forecast meeting and marketing plan update meeting.
Annually
• Attend all strategies revenue management planning meetings assigned.
REVENUE MANAGEMENT SOFTWARE
There are many companies that offer a variety of revenue management software
programs designed for lodging companies. Although the individual tasks of revenue
management can be performed manually, the most efficient means of handling data and
generating yield statistics is through revenue management software. Revenue

management software can integrate room demand and room price statistics to simulate
high revenue-producing product scenarios.
Revenue management software does not make decisions for managers. It merely
provides information and support for managerial decisions. Since revenue management
is often quite complex, front office staff will not have the time to process the voluminous
data manually. Fortunately, a computer can store, retrieve, and manipulate large
amounts of data on a broad range of factors influencing room revenue. Over time,
revenue management software can help management create models that produce
probable results of decisions. Decision models are based on historical data, forecasts,
and booked business.
RESULTS
In those industries where computer-based revenue management has been applied, the
following results have been observed:
• Continuous monitoring: a computerized revenue management system can

track and analyze business conditions 24 hours a day, seven days a week.
• Consistency: software can be programmed to respond to specific changes
in the marketplace with specific corporate or local management rules
resident in the software.
• Information availability: revenue management software can provide
improved management information which, in turn, may help managers
make better decisions more quickly.
• Performance tracking: a computer-based system is capable of analyzing
sales and revenue transactions occurring within a business period to
determine how well revenue management goals are being achieved.
• Revenue management software is also able to generate an assortment of
special reports. The following are representative of revenue management
software output:

• Market segment report: provides information regarding customer mix. This

information is important for effective forecasting by market segment.
• Calendar/booking graph: presents room-nights demands and volume of
reservations on a daily basis.
• Future arrival dates status reports: furnishes demand data for each day of
the week. This report contains a variety of forecasting information that
enables the discovery of occupancy trends by comparative analysis of
weekdays. It can be designed to cover several future periods.
• Single arrival date history report: indicates the hotel's booking patterns
(trends in reservations). This report relates to the booking graph by
documenting how a specific day was constructed on the graph.
• Room statistics tracking sheet: tracks no-shows, guaranteed no-shows,
walk-ins, and turn-always. This information can be instrumental in accurate
forecasting.
Since management is interested in revenue enhancement, computer-based revenue

management has become a popular hospitality industry software application.
Just one example of revenue management software is Easy Revenue Management

Solutions.

DAILY COMMON TASKS OF A REVENUE MANAGER
• Review of nightly reports (last day or days rooms sold and room revenue,
booking evolution, segmentation, annual rate plan, etc).
• Picking-up reports for the previous day.
• Revising forecast through month end.
• Going back to make rate/room availability and making changes in the different
distribution channels.
• Updating the forecast once again
• Checking reservations.
• Processing no shows (no errors under a different name, for instance).
• Handling travel agencies commission queries.

Chapter 2
Vacation Ownership & Time share

Definition of Timeshare: Any arrangement, plan or similar device, but not including any
exchange programmers, whether by membership, agreement, tenancy in common, sale
lease, deed, rental agreement, license, right to use agreement, or by any other means
whereby a purchaser in exchange for consideration, receives a right to use
accommodation or facilities, or both, for a specific period of time less than a full year
during any given year, but not necessarily for consecutive years, and which extends for
a period of more than three years.
Vacation Ownership Industry – Profile
A window to the world of vacation ownership
Sales 2003: $10 Billion
Over 5400 resorts in 95 countries (1590 in U.S.)
Total no. of owners: Approx. 7 million (3 million in U.S.)
Residing in over 270 countries
Economic impact of U. S. Industry: $66.7 billion (2002)
Fastest growing segment of travel & tourism.
Vacation Ownership – Characteristics

The advantages of taking a holiday
• Builds a culture of leisure tourism

• Targets a large cross section of consumers offering wide choice of holidays
• Attractive value package
• Contributes to economy of the resort location
• Promotes domestic tourism & creates jobs
• Success stories in Florida, California, South Carolina, Tenerife, and Malaga
Hawaii
• Mixed use improves utilization or resort services, increases cash inflow
Vacation Ownership in India
Incredible holidays in an incredible land
Number of Timeshare companies : 40
Number of resorts : 80
Number of Memberships : 2, 00,000
Annual additions : 15,000
Families taking holidays : 40,000
No or rooms : 4,000
Total investments : $ 220 million
Growth since 1998 : Over 15% CAGR

Industry - Highlights
• Facilitating safe, comfortable, enjoyable holidays

• Growth through new investments
• Strong consumer safeguards
• Self regulation
• Code of ethics in business conduct
• Overall excellence in products & services
Vacation Ownership – The Road Ahead
What needs to be done by:
• Industry
• Government
Government
• Providing an impetus for growth

• Industry recognition
• Project and operational incentives
• Regulatory framework
• Selective infrastructural support
• Utilize industry potential to drive domestic tourism
• Nurturing vacation ownership. Reaping benefits.
• Vacation ownership- a fast growing tourism brand
• Promotes all types- inbound, outbound and domestic tourism
• Theme based leisure tourism that satisfies consumer needs.
• High potential for employment opportunities

• Domestic Tourism – the catalyst for India’s tourism growth

• Full potential of domestic tourism – to be exploited by industry and government
partnership
• Consumer Insight
Timeshare buyer
• Chief wage earner of the household

• Average monthly income of 50,000/- or higher
• Married
• Owns a car
• Aged between 25-50 years
• Importantly, has holidayed thrice in the last 3 years or at least 3N/4D at a stretch
Typical Holiday Habits
• Survey revealed that a majority averaged at least 1 trip a year

• Less than 2/3rd took shorter vacation averaging 2 short trips every year (thanks
to split weeks)
• Only about 10% had traveled abroad in the last 3 years on leisure or business
cum leisure
• Many preferred holiday destinations abroad – US, Dubai, Singapore & London
• Marked preference for city centric (‘urban’) locations
• Within India- Goa, Shimla, Manali, Kashmir, Bangalore, Tirupati, Ooty, Rajasthan
preferred destinations for future holidaying. Blend of hill stations, cities, beaches,
historical and religious places are preferred destinations.
• Key decision maker for destination is chief wage earner.
• 11 days is the average duration of a long trip with at least 2 destinations covered.
• Average total expenditure – Rs. 25,000/-

Learnings
• Penetration rate of Vacation Ownership in Indian market is very low.

• Low awareness of the timesharing concept and benefits i.e. exchange
• Concept non-relevance to holidays plans
• Perceived low value for money (largely due to poor quality of information
supplied)
• Negative word of mouth publicity on account of past happenings
• Satisfaction rated high amongst active timeshare users
Overall satisfaction by world regions
South Africa : 82%
New Zealand : 92%
Australia : 85%
U.S.A. : 84%
Europe : 76%
Italy : 73%
Implication:
• Huge opportunity exists.

• Burgeoning middle class with growing interest in annual holidays
• Products for different segments for the market
• India’s diversity of leisure options

• Catalyst will be the ongoing interest in domestic tourism
History of Timeshare
Timesharing originated in the French Alps in the late 1960’s at the French Ski Resort,
Supportively in 1966-67. The idea was basically by a group of regular vacationers who
realized that taking holidays every year was becoming more and more expensive. So
they decided to get together, choose a resort and share the cost. This of course worked
wonderfully, since it meant saving an accommodation cost for subsequent vacations.
Timeshare made its entrance into the U.S. market in the 1970s and has come a long
way since then! The early timeshare projects, mostly in the south, were started by
independent developers who took a lot of marginal motels and hotels and converted
them to mostly one bedroom and efficiency timeshare units. Timeshare was popularized
in condominiums and resorts throughout the country. In 1974, exchanging or swapping
an ownership week first began.
Since its introduction into the U.S. market, the timeshare industry has exploded! It is
presently the fastest growing segment of the hospitality industry. Since 1990 alone, the
industry has grown 75% in terms of timeshare resorts developed and households
purchasing timeshare. Over 4 million households world-wide in more than 190 countries
own timeshare. Over 3 million Americans own vacations rather than 'renting' a vacation.
In India, the concept arrived as late as 1982 and wholesomely welcomed since it meant
buying future vacations at today’s price.
There exists a tremendous potential for timesharing in the Indian market and only
0.069% of the market are members.
Types of Timeshare
Fixed Timeshare – Buying holiday time for a specific number of years in

advance.Floating Timeshare – one holiday with their family in various resorts owned by
the timeshare company for the specific period one has purchased the holiday for.

For Whom – Individuals who believe that holiday are an integral part of their lifestyle.
Why Vacation Ownership
• Yearly Vacations
• Worldwide Exchanges
• Can gift vacations
• Lifetime membership
Why are lifetime Holidays so popular??
Lifetime Holidays owners holiday more, strengthen family relationships –
Lifetime Holidays owners use more of their available holiday time than non-Lifetime
Holidays owners, according to research, because they know they are spending their
holidays at a resort that they enjoy, with amenities for an entire family, with no nasty
surprises. And Lifetime Holidays owners use exchange companies to open a whole new
world of adventure, experiencing memorable holidays at exotic locations that they might
otherwise never think of visiting! All these options contribute to the high satisfaction
levels that Lifetime Holidays owners consistently record year in year out Lifetime
Holidays is an investment in Family.
Quality Amenities –
The typical Lifetime Holidays development has top class amenities, from restaurants
and bars to sports and leisure facilities.
Superior Accommodation –
Lifetime Holidays owners choose accommodations to suit their personal needs - from
comfortable studios to lodges and villas to accommodate the largest of families all with
the Lifetime Holidays hallmark of quality that places them above standard package

holiday accommodation! Most offer full or partial kitchens and other conveniences of
home.
Holiday any time of year –
Lifetime Holidays owners may buy Lifetime Holidays to holiday at the time of year that
best suits them.
Flexibility to Exchange –
One of the main benefits of Lifetime Holidays is that owners can swap their holiday time
for a comparable holiday through an exchange organisation such as RCI, which has
4,000 affiliated resorts in more than 90 countries in exotic locations ranging from Goa to
Geneva, from Bangkok to Baltimore, from Manali to Melbourne, with a style to suit all
tastes and budgets, from sun- kissed beach locations to ski resorts... from the
excitement of cosmopolitan cities to tranquil countryside settings. Many resorts are
situated by lakes or golf courses. Others are close by theme parks for those seeking
non-stop fun!
Security –
By investing in future holidays, Lifetime Holidays owners have peace of mind and
security of ownership. They can relax knowing their chosen week or weeks will always
be available and that the quality of accommodation is a known factor. Owners can also
relax, knowing they have paid for their resort accommodation at today's prices for years
to come,
Gift it to friends –
Lifetime Holidays offers owners the ability to gift their holiday week to friends & family
should they not wish to use it in a particular year!

Financial Logic –
One of Lifetime Holidays greatest benefits is that it saves owners a huge amount of
money in the long-term. Take the example of Lotus Suites Mumbai Ecotel. The
advertised room rate of this Lifetime Holidays resort is Rs 6500 + 16% taxes, per night
in a studio. Over 25 years, 7 nights per year, would cost a total of 13.2 lacs. But, of
course, over 25 years inflation would drive up the price per night. So in actuality you
would pay over 20 lacs! And yet members of LSM have only paid about 1.5 lacs to join
the scheme! And in future they will only pay a minimal annual maintenance charge and
utility fees. This financial saving and inflation beating effect is a central reason why
millions of families have purchased Lifetime Holidays worldwide.
All India Resort Development Association (AIRDA)
What is AIRDA?
Today there are a variety of resorts available in India, each of which uses different
marketing techniques to sell vacation ownership (timeshare) holidays to the customer.
Being a new industry in the market, the awareness of this product is quite low. This has
led to developers and marketers using unfair means of selling vacation ownership
holidays.
The All India Resort Development Association (AIRDA) is an organization comprising

genuine vacation ownership members, dedicated to setting the standards of operation
and ensuring customer protection. The association is a self-regulatory body with a core
committee that oversees the functioning of the association.
What does AIRDA seek to do?
AIRDA’s objectives:

• To ensure that all activities of the vacation ownership (timeshare) industry are
honest, fair and conducted with total transparency.
• To safeguard the interests of all vacation ownership customers, existing and
prospective, against all misleading vacation ownership selling practices.
• To ensure the highest ethical standards amongst those engaged in the vacation
ownership industry and holiday ownership in India.
• To check the activities of unscrupulous developers/marketers of vacation
ownership holidays, to the extent of taking legal punitive action against them.
• Redressal of complaints against defaulting vacation ownership (timeshare)
sellers/ marketers.
• Having recognized that a majority of the customer complaints were actually
arising from customers being forced to buy the same day they visit the sales
centre, AIRDA has made the following mandatory:
• Every prospective customer must be given a 10-day cooling off period to give
him/her sufficient time for a change of mind.
• Every member must be given his deposit or membership fee if he asks for a
refund within "10 days of purchase". The amount that has to be refunded is the
total amount given by the customer without any deduction for administration.
However, the customer must clarify this with the marketer to his complete
satisfaction.
• On no account is a telemarketer to announce a prospective customer as a “lucky
winner of a prize." The telemarketer can invite the customer to attend a
presentation for which a gift can be given. A distinct demarcation between a
"prize" and a "gift" has to be made during transactions with the buyer.
What is vacation ownership (timeshare)?
A vacation ownership is a product sold by vacation ownership/holiday companies in

which a buyer acquires the right to use a unit of a resort for a specific period of time in a
year for a specified number of years.

With vacation ownership, you won't need to own a vacation home right through the year
or rent lodgings by the day when you travel. You can purchase a resort unit only for the
time you need at a location you desire. Simply put, timesharing means owning a week
annually at a resort. For instance, you can choose to own the 2nd week of December,
every year, at a resort in Goa.
But you don’t have to spend your holidays at one location year after year! Through a
vacation ownership exchange system facilitated by RCI, you can take a holiday in India
as well as in 86 other countries. Which means Goa today, Venice tomorrow!
Is there any difference between vacation ownership (timeshare) and holiday ownership?
No difference whatsoever. Holiday ownership is simply a more correct name for

vacation ownership because it better describes what the product means. However, most
owners still prefer to call their ownership weeks as vacation ownership.
What is the best price for a vacation ownership (timeshare)?
There are many factors that affect price - the week, the location of the resort, the size of
the accommodation, the season it belongs to, the promoters behind the resort etc.
Does it make sense to buy vacation ownership (timeshare)?
Definitely, once you take a decision keeping in mind the above points and buy
timeshare, it is a great way to ensure that you have quality holiday accommodation at
an affordable price. A carefully researched vacation ownership (timeshare) purchase
gives you the benefit of long-term savings compared to the cost of staying in hotels
while holidaying.
Are there any benefits?

Choice of location: Vacation ownership (timeshare) resorts are located at many
desirable locations around India and the world.

Home away from home:
Your vacation ownership is truly a home away from home. Most resort units are
equipped with an independent kitchen that provides privacy and independence. With
Indian food habits, this is an attractive option specially when traveling abroad.
More fun at a lesser cost:
You can buy a vacation ownership for a fraction of the cost of owning a vacation home.
It is yours to enjoy for a fixed period of time, for as long as 25-33 years! Thus, it's a
hedge against inflation as your future vacation costs are locked in at today's prices.
Repeat vacations:
Vacation ownership resorts offer quality accommodation and associated amenities ideal
for repeat vacations. It also offers a better price/value than a hotel room for extended
stays.
Action-packed holidays:
Vacation ownership resorts offer a wide range of recreational activities aimed at the
family - swimming, table tennis, badminton, tennis courts and horse riding.
Flexibility:
Vacation ownership offers flexibility of use and a variety of experiences through

exchange options and peripheral benefits offered through an exchange company.
In short, vacation ownership offers a better price and greater value than a conventional
hotel room - an apartment that can accommodate more people, with a kitchen that
provides privacy and independence.

AIRDA Member Brands
• Avalon Resorts
• Averina Beach
• Country Vacations
• Clifftop Club Resort
• Conamore Resorts Pvt. Ltd.
• Country Inn
• Golden Stables Lifestyles Centres Pvt. Ltd.
• Golden Stables Outsourced Services
• Hotel Green Castle
• Mahindra Holiday & Resorts India Ltd.
• Neesa Leisure Ltd.
• RCI
• Resort Country Club
• The Ffort Holiday Klub
• The Luxury Club
• Treasure Island Resorts
• VITS, Mumbai
• Himalayan Vistas
• Sheridan Resorts Development
Avalon Resorts

» Averina Beach
» Country Vacations
» Clifftop Club Resort
» Conamore Resorts Pvt. Ltd.
» Country Inn

» Golden Stables Lifestyles

Centres Pvt. Ltd.
» Golden Stables Outsourced Services
» Hotel Green Castle
» Mahindra Holiday & Resorts India Ltd.
» Neesa Leisure Ltd.
» Resort Country Club

» The Ffort Holiday Klub
» The Luxury Club
» Treasure Island Resorts
» VITS, Mumbai
» Himalayan Vistas
» Sheridan Resorts Development

Timeshare
A timeshare is a property or the right to use a property, typically a resort condominium

unit, in which multiple parties have rights, such as the right-to-use.
According to one account, this notion was originally created in Europe in the 1960s.A
resort developer (Hapimag) in the FrenchAlps marketed his resort by encouraging
guests to "stop renting a room" and instead "buy the hotel". Subsequent success
followed, and the concept was quickly embraced by developers worldwide, boosting
sales of surplus condominium units at a time when the resort industry was depressed.
Due to the promise of exchange, these units, called "vacation ownership" by the
industry, often sell regardless of their deeded resort (most are deeded into a certain
resort site, though other forms of use do exist). What is not often disclosed is that all
differ in trading power. If one is in Hawaii or Southern California it will exchange
extremely well, however, those areas are some of the most expensive in the world,
subject to demand typical of a highly trafficked vacation area. The vast majority of
inventory flows briskly through two international exchange companies: Resort
Condominiums International (RCI) and Interval International (II). Critics contend these
units are often overpriced, especially in places such as Mexico and Florida where
almost every resort offers this style of accommodation.
3 Varieties
3.1 Deeded vs. Right to Use
3.2 Fixed Week Ownership
3.3 Floating

3.4 Rotating
3.5 Vacation Clubs
3.6 Points Programs
4 Types and sizes of accommodations
5 How to Buy
6 Scope of the industry
Industry
This innovative concept has attracted the eye of many resort developers and prominent
hoteliers, among which loom Starwood, Hyatt, Hilton, Marriott, and Disney. Vacation
ownership has proven to be remarkably lucrative for stakeholders in these major resort
families, due to its popularity with vacation goers. This "slice" of the industry
foreshadows perennial profits, with an optimistic economic forecast. Indeed, this form of
lodging has spawned a variety of products sold on similar occupancy schemes; cars,
planes, condo-hotel units and luxury fractional properties (at which affluent guests may
stay for as long as a quarter of a year, and which often command a six-figure price tag)
Methods of use
Owners can:
• Use their usage time

• Rent out their owned usage
• Give it as a gift
• Exchange internally within the same resort or resort group
• Exchange externally into thousands of other resorts
• Sell it either through traditional advertising, online advertising or by using a
licensed broker

Recently, with most point systems, owners may elect to:
• Assign their usage time to the point system to be exchanged for airline tickets,
hotels, travel packages, cruises, amusement park tickets;
• Instead of renting all their actual usage time, rent part of their points without
actually getting any usage time and use the rest of the points;
• Rent more points from either the internal exchange entity or another owner to get
a larger unit or more vacation time or at a better location;
• Save or move points from one year to another.
• Some developers, however, may limit which of these options are available at
their properties.
• Owners can elect to stay at their resort during the prescribed period, which varies
depending on the nature of their ownership. In many resorts, they can rent out
their week or give it as a gift to friends and family.
Much lauded is the idea of owners exchanging their week, either independently or
through several exchange agencies, to stay at one of the thousands of other resorts
worldwide. There are many exchange agencies, of which the two largest are Resort
Condominiums International (RCI) and Interval International (II). They have resort
affiliate programs and members can only exchange to affiliate resorts. It is most
common for a resort to be affiliated with only one of the larger exchange agencies, but it
isn't rare to find a dual affiliate resort. Together they have over 7,000 resorts. The time
share resort one purchases determines which of the major exchange companies can be
used to make exchanges. RCI and II charge a yearly membership fee and fees for when
they find an exchange. They also bar members from renting weeks for which they
already have exchanged.
Owners can also exchange their timeshare through independent exchange companies.
Dial an Exchange, Trading Places International, Platinum Interchange, The San
Francisco Exchange, Timex, and Redweek.com are the main independent exchange

companies. Owners can exchange without needing the resort to have a formal affiliation
agreement with the companies.
Sometimes, owners may also arrange a direct exchange. This requires locating an
owner with the location and weeks both mutually desire. This form of exchange is rare
but since it can save in exchange fees it is often sought after. Several bulletin boards
have been created to help timeshare owners meet others and swap.
This type of lodging may take different forms depending on the seller. The vast majority
consist of one week of ownership, i.e. 1/52 year, but some developers sell point based
systems that are a different form of vacation currency that allow hotel stays, car rentals,
and stays at large networks of resorts.
Varieties
Deeded vs. Right to Use
A major difference in types of vacation ownership is that between deeded and right to
use contracts.
With deeded contracts the use of the resort is usually divided into week long increments
and these are sold as fractional ownership and are real property. As with any other
piece of real estate the owner may use his or her week, rent his or her week, give it
away, leave it to his or her heirs or sell the week to another prospective buyer. While
this form of ownership can offer additional security to the owner as a form of physical
ownership, deeded ownership can be as complex as outright property ownership in that
the structure of deeds varies according to local property laws. Leasehold deeds are
common and offer ownership for a fixed period of time after which the ownership reverts
to the Freeholder. Occasionally, leasehold deeds are offered in perpetuity however
many do not convey ownership of the land but merely the apartment or 'unit' of
accommodation.

With right to use, the purchaser has the right to use the property in accordance with the
contract but at some point the contract ends and all rights revert to the property owner.
In other words, the right to use contract grants the right to use the resort for a specific
number of years. In many countries there are severe limits on foreign property
ownership, so this is a common method for developing resorts in countries such as
Mexico. Disney Vacation Club is also sold as a right to use. Care should be taken with
this form of ownership as the right to use often takes the form of 'club membership' or
right to use the reservation system. Where the reservation system is owned by a
Company not in the control of the owners, the right of use may be lost with the demise
of the controlling Company.
Fixed Week Ownership
The most basic unit is a fixed week; the resort will have a calendar enumerating the
weeks roughly starting with the first calendar week of the year. An owner may own a
deed to use a unit for a single specified week. For example, week 26 normally includes
the Fourth of July Holiday, week 51 - Christmas and so on. If an owner owned Week 26
at a resort he or she could use that week every year.
Floating
Sometimes units are sold as floating weeks. The ownership will be specific on how
many weeks the owner owns and from which weeks the owner may select for the
owner's stay. An example of this may be a floating summer week where the owner may
request any week during the summer season generally weeks 22 through 36. In this
example there would be competition for prime holidays such as the weeks of Memorial
Day, Fourth of July and Labor Day. The weeks when schools may still be in session
would not be so high in demand. Some floating contracts exclude major holidays so
they may be sold as fixed weeks.
Rotating

Some are sold as rotating weeks. In an attempt to give all owners a chance for the best
weeks, the weeks are rotated forward or backward through the calendar, so one year
the owner may have use of week 25, then week 26 the next year and then week 27 the
year after that. This method does give each owner a fair opportunity for prime weeks but
it is not flexible.
Vacation Clubs
Vacation clubs are organizations that may own units in multiple resorts in different
locations. Some clubs consist only of individual weeks at other developer's resorts.
They are sold both as deeded or right to use and club members may reserve vacation
time at any of the owned resort units based on availability. Vacation clubs cater to a
wide range of economic backgrounds and income levels.
Points Programs
Resort based points programs are also sold as deeded and as right to use. Points
programs annually give the owner an amount of points equal to the level of ownership.
The owner in a points program can then use these points to make travel arrangements
within the resort group. Many points programs are affiliated with large resort groups
offering a large selection of options for destination. Many resort point programs provide
flexibility from the traditional week stay. Resort point program members, such as
Worldmark, may request from the entire available inventory of the resort group.
Exchange company point programs are not a method of ownership nor are specifically
associated with one resort or resort group. With the exchange company points
programs the members may be limited to exchanging for weeks deposited by other
members.
A points program member may often request fractional weeks as well as full or multiple
weeks stays. The number of points required to stay at the resort will vary based on a
points chart. The points chart will allow for factors such as:

• The popularity of the resort;

• The size of the accommodations;
• The number of nights;
• The popularity of the season;
• The specific nights requested.
There is flexibility as well as complexity in point programs.
Types and sizes of accommodations
These properties tend to be apartment-style units ranging in size from studio units (with
room for two) to three and four-bedroom units. These larger units can comfortably
house large families. Units normally include fully equipped kitchens with a dining area,
dishwasher, televisions, VCRs and more. It is not uncommon to have washers and
dryers either in the unit or easily accessible on the resort. Kitchens are equipped to the
size of the unit, so that a unit that sleeps four should have at least four glasses, plates,
forks, knives, spoons, and bowls so that all four guests can sit and eat at once.
Units are usually listed by how many the unit will sleep and how many the unit will sleep
privately.
Sleeps 2/2 would normally be a one bedroom or studio
Sleeps 6/4 would normally be a two bedroom with a sleeper sofa
Sleep privately refers to the number of guests who will not have to walk through another
guest's sleeping area to use a restroom. Timeshare resorts tend to be strict on the
number of guests per unit. Unit size can affect demand at a given resort where a two-
bedroom unit may be in higher demand than a one-bedroom unit at the same resort.
The same does not hold true comparing resorts in different locations. A one bedroom
with a great location may still be in higher demand than a resort with less demand. An
example of this may be a one bedroom at a great beach resort compared to a two
bedroom unit at a resort located inland from the same beach.

How to Buy
• There basically are two ways to buy a timeshare.

• Buy it directly from the resort developer.
• Buy it from a current owner.
Buying from the developer, you'll see exactly what you’re buying, the developer will
have financing available, closing will be fast and the developer will often have extras
included in the deal. But if you buy from a current owner, you will likely save at least
50% over what the developer is asking for the same timeshare. Sometimes, you may
save more than 90% off the developer prices buying from the current owner.
Scope of the industry
The scope of today's time share industry in the USA is well-documented. The ARDA
International Foundation ("AIF"), which is the research arm of the American Resort
Development Association ("ARDA"), reports there are 1,604 timeshare resorts, with
154,439 units, in the USA as of January 1, 2006 (AIF 2006). Though reportedly fewer
than six percent of U.S. households own one, the prevalence of vacation ownership
continues to expand [3]. Approximately 4.4 million households own one or more U.S.
weekly intervals or points-equivalent as of January 1, 2007, an increase of sixteen
percent from the prior year.
About half of the resorts in the USA are currently selling, generating sales of $8.6 billion
in 2005 (AIF 2006).
The global scope of the industry is not as readily quantified. Interval International, one of
the two major exchange companies, reports there are 5,400 resorts in nearly 100
countries, with 2004 worldwide sales estimated at nearly $11.8 billion (Interval
International 2006).

CHAPTER 3
FRENCH
_________________________________________________________________
Voici mon passeport et mon visa - Here are my passport and visa
Voulez vous voir mon billet de retour? - Do you want to see my return
ticket?
Je ne suis accompagne de personne - I don’t have anyone with me
Je suis venu seul - I came alone .
Ce sont mes valises - Those are my suitcases.
Il y en a deux - There are two of them
Puis-je fermer a clef mes valises? - Can I please lock my suitcases?
Applez-moi un taxi,sil vous plait? - Could you please call me a cab?
Je veux louer une voiture - I want to rent a car.
Parlez-vous anglais,monsieur? - Do you speak English Sir?
Conduisez-moi a l’aeroport - Take me to the airport
Quell est le prix du voyage? - What is the price for the trip?
Voice mes bagages - Here is my luggage
Je voudrais annuler ma reservation pour le September- I would like to cancel my

booking for September
Avez-vous une carte routiere? - Do you have a road map?

Attendez moi quelques minutes - Wait for me for a few minutes
Arretez au coin de la rue - Stop at the corner of the road
Bonjour monsieur - Hello, Sir
J’ai retenu une chamber a un lit avec bain - I booked a single room with a bathtub
Je m’appelle ________________ - My name is….
Je voudrais une chambre a un lit avec bain - I would like a double room with a bathtub
Je voudrais une chambre a deux lits avec bain - What is the price for this room on
a day basis?
Quelle est le prix de cette chaambre par jour? - What is the price for this room without
the meals/food?
Quell est le prix de cette chamber sans le repas? - Does the price include the
meals or not?
Vos chambers sont avec ou sans repas? -
Je prefere une chamber a l’arruere - I would prefer to have a room

on the backside
Il me faut une chamber tranquille -I want a calm room
Je prefere une chamber qui donne sur la rue - I would prefer a room on the street
side
Le tarif est eleve.vous pourriez peut etre le baisser? The price is high. Maybe you could
down it a little?
Je voudrais voir la chamber ,si c’est possible - I would like to see the room, if
possible

Avez –vous une chambrea meilleur marche? - Would you have a less
expensive room?
Quel sera le tariff avec le lit supplementaire? - What would be the price with an extra-
bed?
La chambre est a quell etage? - At which floor is the room?
Y a-t-il un ascenseur dans l’hotel? - Is there an elevator in the hotel?
Ou est-il? - Where is it?
La chambre est au cinquieme. - The room is on the 5th floor
Faites-vous un prix a la semaine? - is there a rate for a week?
Ma chambre me plait beaucoup - I really like my room
Voudriez-vouz me montrer votre passeport? - Could you please show me your

passport?
Le voici - Here it is.
Signez le register,sil vous plait.donnez –moi votre adresse- Please, sign the register.
Give me your address
Combien de jours comptez-vous rester? - How many days are you planning to
stay?
La nuit seulement.quelques jours.une semaine.jusqua mardi- Only for the night. A few
days. A week. Until Tuesday.
A quelle heure faut-il que je quitte la chamber pour ne pas payer une autre journee?- At
what time do I have to leave the room in order to avoid paying an extra-day? (What is
the check-out time?)

A quelle heure les repas sont-ils servis? - At what time do you serve the meals?
Voudriez vous faire monter de l’eau chaude? - Can you please send me some hot
water?
Je voudrais prendre le petit dejeuner dans ma chambre- I would like to take the
breakfast in my room please
Appelez –moi a six heures,sil vous plait - Call me at 6 please.
Apportez – moi des serviettes propres,sil vous plait- Can you please bring me some
clean towels?
Il me faut une lampe de bureau - I need a table lamp for the desk.
Il n’y a pas de cendrier dans ma chamber - There is no ashtray in my room
Ouvrez les fenetres,sil vous plait - Open the windows please
Puis –je entrer monsieur? - Can I please come in Sir?
Qui est la? - Who is there?
Un moment,sil vous plait - One moment, please.
Entrez - Come in
Mettez-le sur la table - Put it on the table
Voice un message pour nous - Here is a message for us
Il n’y a pas message pour vous aujourd’hui - There is no message for you
today
J’ai besoin de faire laver des vetements - I need to have my clothes washed
Nous voudrions faire le tour de la ville. - We would like to do a city tour Pouvez-
vous nous aider a louer une auto? - Could you help us to rent a car?

Combine faut-il payer par heure? - How much is the cost for an hour?
Je voudrais un guide - I would like a guide
Qui recommandez-vous? - Who do you recommend?
J’ai besoin de lui pour demain matin - I need him/her for tomorrow
morning
Donnez-moi la cle de ma chamber,sil vous plait - Can I please have my room key?
Je ne me sens pas bien.faites venir le medecin de l’hotel,sil vous plait?] I don’t feel well,
can you please send me the hotel’s doctor?
Je voudrais vous avertir que nous partirons demain- I would like to let you know that we
will be leaving tomorrow
Donnez-moi la facture sil vous palit - Give me an invoice please
Voice la cle ma chamber - Here is my room key
Au revoir,monsieur/madame - Bye Sir/Mrs
Est-ce-que je peux changer des dollars ici? - Can I exchange dollars here?
Je voudrais changer ce biller de banque American en argent local- I would like to

exchange this American note with local currency
Quell est le cours actuel de votre monnaie? - What is the current rate of your
currency?
Combein de roupies pour un dollar? - How much Rupees can I have

for a Dollar?
Je voudrais toucher ce cheque de voyage - I would like to get the money of

this traveler check
Pouvez –vous accepter ce cheque personnel? -do you accept personal cheques?

Puis-je vous payer par cheque? -can I pay by cheque
DIALOGUE 1
Receptionnaire : Bonjour, monsieur.
Francois Martin : Bonjour.
Receptionnaire : Voila votre cle, monsieur.
Francois Martin : Merci
Receptionnaire : A votre service
DIALOGUE 2
Garcon : bonsoir, Madame.
Jeanne Martin : Bonsoir
Garcon : Voila votre the, madame
Jeanne Martin : Merci
Garcon : A votre service
DIALOGUE 3
Receptionnaire : Voila votre fax, Mademoiselle

Mereille Martin : Merci.
Receptionnaire : A votre service.
Bonne nuit, mademoiselle.
DIALOGUE 4
M.Robert : Bonjour je suis monsieur Robert.
Employe : Bonjour, monsieur Robert
Je m’appelle imtiaz, de Everest Travels.
Bienvenue en Inde.
DIALOGUE 5
Employe : Voila votre guide, messieurs-dames.
Guide : Bonjour, je m’appelle Ravi.
Je suis votre guide.
M.Robert : Gilles Robert, enchante!
Guide : Voila le chauffer, avec la voiture.
ll s’appelle David
DIALOGUE 6

M.Girard : Bonjour, j’ai une reservation.
Receptionnaire : Bnjour, Monsieur.
A quell nom, s’il vous plait?
M.Girard : Girard.
Receptionnaire : (…) C’est exact. Bienvenue, monsieur Girard!
DIALOGUE 7
Mme Dupont : Bonsoir, je m’appelle Francoise Duppont.
Jai une reservation
Receptionairre : Excusez-moi, madame. Est-ce que vous pouvez peeler votre nom?
Mme Dupont : D.U.P.O.N.T.
Receptionnaire : Merci (…)
DIALOGUE 8
Receptionnaire : Bonjour, monsieur Lacroix.
M.Lacroix : Bonjour. Est-ce que ma voiture est ici?
Receptionnaire : Excusez-moi, monsieur. Est-ce que vous pouvez repeater votre

question?
M.Lacroix : Est-ce que la voiture est la?
Receptionnaire : Oui, monsieur. Voila votre chauffer.

M.Lacroix : Merci. Au revoir.
Receptionnaire : A votre service, monsieur. Bonne journee’.
DIALOGUE 9
M.Henri : Bonsoir.
Nous avons une reservation.
Receptionnaire : Bonsoir, monsieur.
A quell nom, s’il vous plait?
M.Henri : Henri.
Receptionnaire : Un instant, s’il vous plait! (…) C’est exact.
Une chamber double pour trios nuits?
M.Henri : Oui. On voudrait une chambre calme.
Receptionnaire : Bien. (…) Vous avez la chamber n 4, cote piscine.
Mme Henri : Ah, il y a une piscine! Est-ce que la chambre est climatisee?
Receptionnaire : Oui, bien sur!
DIALOGUE 10
Receptionnaire : Est-ce que vous pouvez remplir cette fiche, s’il vous plait?
M.Simon : (…) Voila.
Receptionnaire : Merci (…) Excusez-moi, est-ce que je peux voir votre passeport?
Merci.

(…) Est-ce que vous pouvez signer ici, s’il vous plait?
M.Simon : Voila.
Receptionnaire : Merci. Voila votre passeport et la cle de votre chambre.
M.Simon : Quel est le n de ma chambre?
Receptionnaire : Vous avez la chambre 124, monsieur.
J’appelle un porteur pour vous bagages.
Bon sejour,monsieur Simon.
DIALOGUE 11
Employe: Bonjour,monsieur.
M.Martin: Bonjour.Je Voudrais changer des dollars.
Employe: combine est-ce que vous voulez changer?
M.Martin: 200 dollars.Quel est le taux de change?
Emloye: 36,monsieur.
Est-ce que je peux voir votre passeport,s’il vous plait?
M.Martin: Voila.
Employe: Merci.Est-ce que vous pouvez ecrire votre adresse a udaipur,s’il vous plait?
M.Martin : Voila.
Employe: Merci.Est-ce que vous pouvez ecrire votre adresse a Udaipur, s’il vous plait?
(…) Est-ce que vous pouvez signer ici ?

(…)Voila 7200 roupies, votre recu et votre passeport.
Merci. Au revoir, monsieur.
DIALOGUE 12
M.Saint-Hillier: Bonsoir.Est-ce que vous avez une chambre?
Receptionnaire: Je suis desole, monsieur,mais l’hotel est complet.
DIALOUGE 13
M.Chatelain: ll n’y a pas de savon dans la sale de bains.
Receptionnaire: Excusez-moi, monsieur. Est-ce que vous pouvez repeater?
M.Chatelain: Je n’ai pas de savon dans ma sale de bains.
Receptionnaire: Je suis desole,monsieur. Je fais le necessaire tout de suite.
DAILOUGE 14
M.Bouchet: Bonjour,je voudrais changer de l’ aregent.
Receptionnaire: Je suis desole, monsieur,mais le bureau de change ouvre seulement a
10h00.
DAILOUGE 15
Mme Deschamps : Allo,ma chambre n’est pas faite.
Employe : je suis desole,madame.jemen occupe tout de suite.

DIALOGUE-16
M.Mercier : Nous voudrions diner.
Maitre d’hotel : Je suis desole, monsieur, mais le restaurant est femme.
DIALOGUE- 17
Receptionaire: Reception Bonsoir
M. Seguin : Bonsoir. J’ai un probleme. La climatisation ne fonctionne pas
Receptionnair : jesuis desole, monsieur. Je fais le necessaire tout de suite
DIALOGUE – 18
M. Lejeune : Je voudraise une biere
Serveur: Je suis desole monsieur, mais nous ne servons pas d’alcool.
Est-ce que vous volez prendre autre chose?
DIALOGUE-19
Maitre d’hotel: Bonjour, messieurs-dames
Mme Rigal: nous voudrions une table calme
Maitre d’hotel: Par ici, s,il vous plait. Est-ce que cela vous convient?
Mme Rigal: C’est parfait, merci.
Maitre d’hotel: Est-ce que vous volez commander?
Mme Rigal: Oui, Je vais prendre un jus d’orange. Du the et des toasts
Maitre d’ hotel: et vous, Monsieur?

M.Rigal: Hum, moi je vais prendre du café, une omlette et des toasts.
Maitre d’hotel: Est-ce que vous prenes un jus de fruit, monsieur?
M.Rigal: Non merci.
Maitre d’hotel: Est-ce que je peux avoir le no.de chambre, s’il vous plait?
M.Rigal: 951
Maitre d’hotel: Merci, Messieurs-dames
DIALOGUE-20
Maitre d hotel : est-ce que vous avez choisi,messieurs-dames?
Mme andre : oui,je vais prendre un butter chicken.
M.Andere : Et moi,un seekh kebab.
Qu’est-ce qu’on peut manger avec ca?
Dialogue 1
Receptionnist : Hello Sir.
FM : Hello
Receptionnist : Here is your key, Sir
FM : Thank’s
Receptionnist : At your service.
Dialogue 2

Waiter : Good evening Madam,
JM : Good evening
Waiter : Here is your tea, Madam
JM : Thank’s
Waiter : At your service.
Dialogue 3
Receptionnist : Here is your fax Miss
MM : Thanx
Receptionnist : At your service. Have a good night Miss.
Dialogue 4
MR : Hello, I am Sir Robert
Employee : Hello Sir Robert. My name is Imtiaz, from Everest travels. Welcome in India.
Dialogue 5

Employee : Ladies and Gentlemen, here is your guide.
Guide : Hello, my name is Ravi. I am your guide.
MR : Gilles Robert, nice to meet you.
Guide : Here is the driver, with the car. His name is David.
Dialogue 6
MG : Hello, I have a booking.

Receptionnist : Hello Sir. Under which name is your booking please?
MG : Girard.
Receptionnist : This is exact. Welcome Sir Girard!
Dialogue 7
MD : Good evening, my name is Françoise Duppont
Receptionnist : Excuse-me Madam, could you please spell out your name?
MD : D.U.P.O.N.T.
Receptionnist : Thank you.
Dialogue 8

Receptionnist : Hello Mister Lacroix/
ML : Hello, is my car here?
R : Excuse me Sir, could you please repeat your question?
ML : Is the car here?
R : Yes Sir, here is your driver.
ML : Thank you, good bye.
R : At your service Sir. Have a good day!
Dialogue 9
MH : Good evening. We have a booking.
R : Good evening Sir. Under what name is your booking please?
MH : Henri
R : One moment please. Yes, this is exact. A double room for three nights?
MH : Yes, we would like a quiet room.
R : All right. We have room 4, on the pool side.
MmeH : Ah! There is a pool! Is the room with AC?
R : Yes, ofc!
Dialogue 10

R : Could you please fill this form?
MS : Here.
R : Thank you. Excuse-me, can I please see your passeport? Thank You. Can you
please sign here?
MS : here.
R : Thank you. Here are your passport and the key for your room.
MS : What is my room’s number?
R : You have room number 124, Sir. I am calling a porter for your luggage. Have a nice
stay Mister Simon.
Dialogue 11
E : Hello Sir
MM : Hello, I would like to exchange dollars.
E : How much do you want to exchange
MM : 200 dollars. What is your rate?
E : 36, Sir. Can I please see your passport?
MM : Here.
E : Thank you. Can you please write down your address in Udaipur?
MM : Here.

E : Can you please sign here? Here are 7200 INP, your receipt and your passport.
Thank you. Good bye Sir.
Dialogue 12
MSH : Good evening. Do you have a room?
R : I am sorry Sir, but our hotel is full.
Dialogue 13
MC : There is no soap in the bathroom in the bathroom.
R : Excuse me Sir, could you please repeat?
MC : I don’t have soap in my bathroom.
R : I am sorry Sir. I will send someone right away.
Dialogue 14
MB : Hello, I would like to exchange money.
R : I am sorry Sir, but the change office only opens at 10.
Dialogue 15

MD : Allo, my room has not been cleaned?
E : I am sorry Madam, I will take care of it right away.
Dialogue 16
MM : We would like to have dinner.
MDH : I am really sorry Sir, but the restaurant is closed.
Dialogue 17
R : Reception desk, good evening.
MS : Good evening. I have a problem. The AC is not working.
R : I am sorry Sir, I am taking care of it right away.
Dialogue 18
ML : I would like to have a beer.
Waiter : I am sorry Sir, but we don’t serve alcohol. Would you like to have anything
else?

Dialogue 19
MH : Hello Madam, Sir.
MmeR : We would like a quiet table.
MH : This way please. Is that convenient for you?
MmeR : It’s perfect, thank’s.
MH : Would you like to order?
MmeR : Yes, I will have an orange juice, a tea and some toasts.
MH : What about you Sir?
MR : Well, I will have a coffee, an omelet and some toasts.
MH : Would you like a fruit juice Sir?
MR : No, thank’s.
MH : Can you please give me your room number?
MR : 951
MH : Thank you Madam, Sir.
Dialogue 20
MH: Did you make your choice Madam, Sir?
MmeA: Yes, I will have a butter chicken.

MA: And a seekh kebab for me. What can we have along with it?
Les salutation(the salutations)
Bonjour-good morning(a salutation also used for the formal meetings with people and
starting of the conversation at any point of the day).
Bonne après midi-Good afternoon
Bonsoir-Good evening
Bonne nuit-Good night
Pour le salution de la jour(the salutations for the day)
Bonne soirée-have a good evening
Bonne journée-have a good day
Bonne voyage-have a nice journey
Bonne apettite-eat well
Bon Week-end- have a nice week-end
A Demain-See you tomorrow
A Bientot-See you soon
Au revoir-good bye
Merci-thanks
Les jours de la semaine(the days of the week)
Lundi-Monday
Mardi-Tuesday

Mercredi-Wednesday
Jeudi-Thursday
Vendredi-Friday
Samedi-Saturday
Dimanche-Sunday
Les moins de l’annee(the months of the year)
Janvier- January
Février-February
Mars-March
Avril-April
Mai-May
Juin-June
Juillet- July
Août-August
Septembre-September
Octobre-October
Novembre-November
Décembre-December
Les Numbres(the numbers)

Un
Deux 50.Cinquante
Trois 51.Cinquante-et-un
Quatre 52.Cinquante-deux
Cinq 60.Soixante
Six 61.Soixante-et-un
Sept 62.Soixante-deux
Huit 70.Soixante-dix
Neuf 71. Soixante-et-onze
Dix 72.Soixante-douze
Onze 80.Quatre-vingts
Douze 81.Quatre-vingt-un
Treize 82.Quatre-deux
Quatorze 90.Quatre-vingt-dix
Quinze 91.Quatre-vingt-onze
Seize 92.Quatre-vingt-douze
Dix- Sept 100.cent
Dix- Huit 200.deux cents
Dix- Neuf 1 000.mille
Vingt 1 000 000.un million
Vingt-et-un
Vingt-deux
Vingt-trois
30.Trente
31.Trente-et-un
32.Trente-deux
40.Quarante
41.Quarante-et-un
42.Quarante-deux

Saleur de maniere FORMELLE(formal conversation)
Comment allez vous?-how are you doing?
Oui , je vais bien ,merci, et vous?-yes, I am doing good , thanks, and you?
Comment ca va?-how are you?
Non,je suis mal.-no, I am bad or not good.


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FRONT

OFFICE MANAGEMENT-VI SEMESTER

THE CONCEPT OF YIELD MANAGEMENT

Yield Management, also known as Revenue Management, is the process of

What Is Revenue Management?

We can summarize that Revenue Management is the process of understanding,

Good Yield Management Maximizes (or at least significantly increases) Revenue

The Occupancy Crunch of The mid 80’s

To understand why our industry turned to Revenue or Yield Management, We need to

The goal of revenue management is to strike a balance between maximizing occupancy

The Airlines’ Revenue Management Model

• Occupancy demand is the major difference.

The key to successful Revenue or Yield Management is to review advance reservations

Yield Management is a technique of maximizing Room Revenues. It is also known as

Why Revenue Management?

A Hotel’s capacity is relatively fixed - it is nearly impossible to add or remove Rooms

Low Marginal Cost:

Revenue Management is based on complex Optimisation methodologies developed

Market Segment Identification:

“A Market segment is a subgroup of people or organizations sharing one or more

“Market segmentation is the process in marketing of dividing a market into distinct

How Do We Crete A Good Forecast?

• Define the difference between constrained and unconstrained demand

Measuring performance of an RM System is a major issue. Occupancy rates and Yield

Thereby reducing their decision-making responsibilities. Sometimes, employees taking

Before the emergence of Revenue Management, BOAC (now British Airways)

advance-purchase restricted and capacity controlled. This Yield Management system

HOTEL INDUSTRY APPLICATION

Benefits of Yield Management: -

How does Yield Management maximize Revenue by controlling forecast information

The Primary objective: -

A second objective of limiting discounts by Room type is to encourage up-selling. This

Duration control places time constraints on accepting reservation in order to protect

COMMON ATTRIBUTES OF REVENUE MANAGER

QUALITIES & MANAGERIAL SKILLS:

Ability to manage from 3 to 8 varying property types

1. Strong understanding of managing online distribution channels

• Ability to produce consistent profits

An indispensable tool for Revenue Management is a Calendar of Events because it can

REVENUE MANAGEMENT SOFTWARE

• Continuous monitoring: A computerized Revenue Management System can track

Since Management is interested in Revenue enhancement, computer-based Revenue

Just one example of Revenue Management software is Easy Revenue Management

1. Occupancy Percentage = Number of Rooms sold X 100

Number of lettable Rooms

2. Double Occupancy Percentage = Number of guests- No. of Rooms sold X 100

Number of Rooms sold

3. Average Room Rate (ARR) = Total Room Revenue

4. Revenue Per Available Room (RevPAR) = Actual Room Revenue

Number of available Rooms

RevPAR = Occupancy percentage X ADR

5. Room Rate Achievement Factor = Actual Average rate

Potential Average Rate

6. Yield = Room Revenue realized X 100

Room Revenue potential

= Occupancy percentage * Achievement factor

= Room nights sold X Average room rate

Room revenue at single occupancy at rack rate

8. Potential average double rate=

Room revenue at double occupancy at rack rate

10. Potential average rate =

(Multiple occupancy percentage X Rate spread) + Potential average single rate

11. Room rate achievement factor = Actual average rate X100