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Reservation Management

Reservation Management. Yvonne Yang - RDM LRJJ. Contents. Understanding availability Forecasting room availability Forecasting data Forecasting formula Group reservations. Yvonne Yang - RDM LRJJ. Reservations Management. Understanding Availability. Yvonne Yang - RDM LRJJ.

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Reservation Management

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  1. Reservation Management Yvonne Yang - RDM LRJJ

  2. Contents Understanding availability Forecasting room availability Forecasting data Forecasting formula Group reservations Yvonne Yang - RDM LRJJ

  3. Reservations Management Understanding Availability Yvonne Yang - RDM LRJJ

  4. How long each guest stays at the hotel? Best to look by market segment How long on average does that particular market segment stay Used for setting Rate Controls Reservations Management Length of Stay UnderstandingAvailability Yvonne Yang - RDM LRJJ

  5. Which day of the week does each market segment usually stay Important for forecasting Used for setting rate controls Reservations Management Day of week UnderstandingAvailability Yvonne Yang - RDM LRJJ

  6. Reservations Management When guests book and do not show up at the hotel Which day of the week do we have the most No Shows Which market segments do No Shows Are they all GTD reservations? No Show UnderstandingAvailability Yvonne Yang - RDM LRJJ

  7. Which day of the week do we have the most Cancellations? Which market segments Cancel ? What are the cancellation reasons? Reservations Management Cancellations UnderstandingAvailability Yvonne Yang - RDM LRJJ

  8. A waitlisted reservation that cannot be taken How many regrets do we have? What rate? What reason? Reservations Management Regrets UnderstandingAvailability Yvonne Yang - RDM LRJJ

  9. The time in advance that bookings are made Important to look at the market segmentation for forecasting & rate controls Reservations Management Lead Time UnderstandingAvailability Yvonne Yang - RDM LRJJ

  10. How quickly reservations are coming into the hotel If the booking pace is unusually fast then there might be something happening in town Best results to look at the booking pace by market segment Booking Pace Reservations Management UnderstandingAvailability Yvonne Yang - RDM LRJJ

  11. Room type overbooking House overbooking Reservations Management Overbooking UnderstandingAvailability Yvonne Yang - RDM LRJJ

  12. Reservations Management Forecasting Room Availability • Long Term • Operating budgets • Short Term • Controlling variable costs Yvonne Yang - RDM LRJJ

  13. Reservations Management Forecasting Room Availability • Good Forecasting allows: • Cost centres can react to changes in budgeted occupancy • Cost centres get the opportunity to control variable costs, particularly wages and supplies • The foundation for making room pricing decisions • Cash flow analysis and planning of purchases • Planning of vacations, holidays, renovations and projects Yvonne Yang - RDM LRJJ

  14. Reservations Management Forecasting Room Availability • Types of information helpful in room availability forecasting: • Knowledge of the hotel and its surrounding areas • Occupancy data for the past several months and for the same period of the previous year • Reservation trends and history of reservation lead times (how far in advance reservations are made) • Special events scheduled in the surrounding area Yvonne Yang - RDM LRJJ

  15. Reservations Management Forecasting Data (History – Current – Future) The process of forecasting room availability generally relies on historical occupancy data as well as business already committed Expectedwalkins? Expectedroomarrivals ExpectedOverstays? ExpectedStayovers? Expectedroomunderstays? Expected no shows? Yvonne Yang - RDM LRJJ

  16. Reservations Management Forecasting Rooms Revenue How would you forecast the rooms revenue? ForecastedRoomsRevenue RoomsAvailable Occupancy % Forecasted ADR Whatwould be yourforecastedroomsrevenuefornextyear in a 300 rooms hotel thatis 80% occupied and withan ADR of 150 euros? Yvonne Yang - RDM LRJJ

  17. Reservations ManagementForecasting Data • Percentage of No-Shows: Number of Room No-Shows/ Number of Room Reservations Purpose: Helps front office managers decide when (and if) to sell rooms to walk-in guests. • Percentage of Walk-Ins: Number of Room Walk-Ins/ Total Number of Room Arrivals Purpose: Helps front office managers know how many walk-ins to expect, especially when the hotel is near full occupancy. Yvonne Yang - RDM LRJJ

  18. Forecasting Data • Percentage of Overstays: Number of Overstay Rooms/ Number of Expected Check-Outs Purpose: Alerts front office manager to potential problems when the hotel is near full occupancy and rooms have been reserved for arrivals. • Percentage of Understays: Number of Understay Rooms/ Number of Expected Check-Outs Purpose: Alerts front office manager to additional room availability when the hotel is near full occupancy. 20% of hotels charge understay guests. Yvonne Yang - RDM LRJJ

  19. Forecasting Data • Percentage Of Cancellations Number of Cancelled Rooms/ Number of Reservations • Percentage Of Early Arrivals Number of Early Arrivals Number of Reservations Yvonne Yang - RDM LRJJ

  20. Forecast Formula Total Number of Guestrooms minus Number of out-of-order rooms minus Number of room stayovers minus Number of room reservations plus Number of room reservations ×Percentage of No-shows plus Number of room understays minus Number of room overstays Equal to Number of rooms available for Sale Yvonne Yang - RDM LRJJ

  21. Case 1- Forecasting Availability • A 1,000 room hotel had a total of 950 rooms occupied last night. Of those 950 rooms, 300 are check out today. In addition, there are 325 reservations for today. Rooms available in hotel 1,000 Occupied last night 950 Due to check out today 300 Equals number of stay-overs 650 (950-300) +Today’s reservations 325 Total rooms occupied for today 975 (650+325) Equals rooms available for sale 25 (1000-975) Occupancy/forecast97.5%(975/1,000) Yvonne Yang - RDM LRJJ

  22. Case 2-Forecasting Availability • A 1,000 room hotel had a total of 950 rooms occupied last night. Of those 950 rooms, 300 are expected to check out today. In addition, there are 325 reservations for today. • Adjustments: understays: 6%; overstays: 2%; cancellations: 2%; no-shows: 5%; early arrivals: 1% Yvonne Yang - RDM LRJJ

  23. Case 2-Forecasting Availability +1000 rooms -650 stayovers (950 rooms occupied – 300 expected c/o) -325 reservations +18 understays (6% of 300) - 6 overstays (2% of 300) + 7 cancellations (2% of 325) +17 no shows (5% of 325) - 4 early arrivals (1% of 325) 57 rooms available for sale Yvonne Yang - RDM LRJJ

  24. Case 3-Forecasting Availability • A 550 room hotel had a total of 420 rooms occupied last night. Of those 420 rooms, 300 are due to check out today. In addition, there are 325 reservations for today. • Adjustments: Understays: 5%; overstays: 3%; cancellations: 3%; no-shows: 6%; early arrivals: 1% Yvonne Yang - RDM LRJJ

  25. Case 3-Forecasting Availability +550 rooms -120 stayovers (420 rooms occupied – 300 expected c/o) -325 reservations +15 understays (5% of 300) - 9 overstays (3% of 300) + 10 cancellations (3% of 325) +20 no shows (6% of 325) - 4 early arrivals (1% of 325) 137 rooms available for sale Yvonne Yang - RDM LRJJ

  26. Case 4: Forecasting occupancy Yvonne Yang - RDM LRJJ

  27. Reservations Management Group Reservations Yvonne Yang - RDM LRJJ

  28. Reservations Management GroupReservations Tentative Definitve Option Block Cut Off Date Washdown Yvonne Yang - RDM LRJJ

  29. Reservations Management GroupReservations • How many rooms you wish to sell to the group. • Does it fit hotel strategy • What is the demand for that period • Forecasted Revenue and ARR • Revenue for other departments • What they are willing to pay • Total revenue • Transient displacement Yvonne Yang - RDM LRJJ

  30. Reservations Management GroupReservations Average rate vs Occupancy • 10 rooms x $500 = $5,000 Revenue • 50 rooms x $100 = $5,000 Revenue What are the pros and cons of taking a groupreservation? Yvonne Yang - RDM LRJJ

  31. Reservations Management High rate or high occupancy? GroupReservations Yvonne Yang - RDM LRJJ

  32. Advantages of High Average Rate Reservations Management GroupReservations • Lowerpreparationcostsonfewerroomsoccupied • Reputationforqualitypreserved • Lower general staff requirements • Lesswear and tearontheproperty Yvonne Yang - RDM LRJJ

  33. Disadvantages of High Average Rate Reservations Management GroupReservations • Fragile market may lose customers • Hotel less occupied, may look unpopular • Fewer clients for F&B Oulets • Narrow range of services Yvonne Yang - RDM LRJJ

  34. Advantages of High Occupancy Reservations Management GroupReservations • More clients for F&B outlets • Range of services can be mantained • Greater cash flow (more likely) • Hotel looks successful Yvonne Yang - RDM LRJJ

  35. Disadvantages of High Occupancy Reservations Management GroupReservations • May lose guest who prefer a more quite hotel • Group guests may not use outlets • Higher staff / preparation cost • Possible unwillingness to pay for services Yvonne Yang - RDM LRJJ

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