6.

2 Revenue Management Tools

Market Codes:
Market codes is a selling process, where guests are segmented according to sales source, for example
transient or group. There are 4 principles that help revenue managers in market codes:

1. Maximize room sales whenever possible (achieve highest RevPAR)

2. Only assign discounted rooms to groups only when necessary (if rooms will remain unsold)
3. Consider how market code decisions will affect revenue.
4. Consider short-term and long-term impact of market codes.

Track Codes:
Track codes segment travelers according to demographics (Leisure or Business). It is important for the
following reasons:

1. Market Size Variation: The hotel should know the client type and sell them rooms based on
that. For example, add leisure activities to leisure travelers. The hotel will be busy on weekdays
for business travelers.
2. Variability in ADR: Room rate varies according to track code. Higher ADR from transient, and
lower from groups.
3. Variability on date demand: Leisure travelers come on weekends and national holidays, while
business travelers come on weekdays.
4. Variation in room (bed) type: Corporate travelers use single bed; leisure travelers use double
beds.

7.2 Management of Distribution System

Walk-in
Walk-in guests are valuable source of revenue because they have zero cost. To maximize room rate
acceptance:

1. Welcome the guests immediately and be friendly

2. Have an attractive and clean lobby
3. Give special discount for last-minute travelers
4. Increase perceived value by room upgrade
5. Give a logical fade (discount) rate if the guest resisted rack rate.

Third party websites

Third party websites help the client see and compare hotels. There are 2 models:

Merchant model: Third party website operators buy many rooms at high discounts, then sell them at
higher rate, and gain more profit.
Opaque Model: The client doesn’t know from which hotel he/she is buying until they purchase the
room.
10.3 Telephone Skills
Proper phone system training should be included in the training process for new front desk agents.

• Answer the phone on time; not more than three rings. The agent should smile, use proper
volume, and appropriate speed of speaking. The tone should be respectful, enthusiastic, and
professional.
• Greet callers with a statement
• Don’t multitask, give full focus to the caller.
• Speak clearly, use proper English, and don’t use jargons.
• Apply listening skills
• Transfer calls only when necessary.
• If the client is calling for someone else, who is not available, record all necessary information
(client’s name, number, and message), and inform the client that his message will be delivered
shortly.

12.3 Credit Limit Strategies

The following factors are considered by FOMs who must make decisions about credit extension:

• Credit Extension amount: If exceeded by short amount, take no action.

• Potential cost: Credit extension is more flexible on higher profit margin products/services
(rooms) than on less profitable ones (food).
• Occupancy levels: Credit extension is suitable when occupancy is low. When the occupancy is
high use more strict policies.
• Guest history: First-time guests are treated differently than returning guests. The PMS records
guest histories for easy review. Frequent hotel guests are at lower credit risk compared to those
who have not stayed there before.
• Guest affiliation: Business travels are more creditworthiness.

12.4 Management-Oriented Reports:

The most popular reports are the following:

1. Credit related: Allows us to know who is near the credit limit.

2. Group sales related: Includes room pickup, food and beverage activities and purchases.
3. Housekeeping related: Helps maintain room status (occupied, clean…)
4. Maintenance report: Allows us to know which rooms require quick attention
5. Accounts receivable related: Shows what the guest paid and what he/she owes.
6. Special Coverage: Reports that include unique features (Golf game, water park…)

13.5 Role of Front Office: Hub of the Hotel

The front office is the center of the hotel. They collect and spread data across all hotel department. The
responsibilities are the following:

1. Coordination of guest service: Front office must assist guest in everything during the guest’s
stay. The front office is the guest’s primary contact.
2. Centralization of operating information: The data the front office has helps in making short and
long-term decisions.

3. Ease the work of hotel staff: They help to develop plans, make schedules, and create quality for
guests.