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The Wedding Bell Blues
Transcript of The Wedding Bell Blues
Function space provides a substantial revenue stream for hotel.
Goal: to maximize contribution per available space for a given time (ConPAST) by manipulating price and event duration.
Contribution: preferable to revenue because of the varying profit margins of the different streams of function space revenue.
Space: the number of square feet or metres in the function room
Time: refers to the time segment for which contribution is measured.
Clients were having difficulty in meeting minimum revenue requirements and sales managers were offering expensive(but unprofitable) upgrades.
Sales managers were booking the weddings very far out. Resulting in turning away many unexpected short-term weddings.
Pricing management strategy
Demand based pricing where hotel charge function space according to demand.
Duration control management strategy
Refining the definition of duration: consider duration as an hour.
Reducing arrival uncertainty: requiring non-refundable deposits and pre-payments for function space
Reducing duration uncertainty: ensure that the guest rooms associated with the event do not unnecessarily displace higher paying transient business and must ensure that the event lasts for the agreed length of time.
Reducing the amount of time between functions: more employees were assigned to speed the transition will increased labor cost.
Function room prices should consider the impact on room sales and food and beverage.
Managers must determine the appropriate price to charge.
Justify the prices charged to different clients.
Definition of duration: most computerized systems track this information (define duration as an hour), but it may be difficult to retrieve.
Arrival uncertainty: determining the timing and number requests from different market segments is challenging since it difficult to forecast demand for group rooms an most have not even attempted to forecast function space.
Duration uncertainty: facing difficult time ensuring guest room occupied for specified length of time since many groups suffer from high room attrition on the last day or two of the event.
Time between functions: hotels that try to minimize the labor cost associated with set-up and tear-down often end up turning down business.
Establish the baseline of performance
Understand the drivers of that performance
Developed a revenue management strategy
Implement that strategy
Monitor the strategy’s outcome Thank You…..
Q & A 1.Introduction 2. Components of ConPAST: 3.The Problem 4.Suggested Strategies 5. Implementation Issue 6. Develop Revenue Management Programme