Question

Hotel Sport is in the suburb of large metropolitan area near a sports complex that has a stadium suitable for baseball and soccer games. The 250-room independent hotel is a select-service property in the mid-range category. Its rate structure is simple:

Rack                                         $190

Weekend                                 $159

Low season/Government    $140

Groups (of 15+)                     $130

Best available rate                 $120

Late August is traditionally a slow season in the hotel and business picks up in September after area businesses and government offices are back in full gear. The sell rate in late August is the $140 low season rate. For the weekend of August 20 to 22 the forecasted occupancy is around 130 rooms. The reservations on the book are 90 guaranteed and 25 non-guaranteed reservations. The hotel expects 15 walk-ins.

Questions

1. It is July 29. What rate should the revenue manager approve to quote for reservation inquiries for the weekend of August 20–22?

2. Now it is July 30. One day later: The Major League Soccer Franchise of the city had just clinched a spot in the playoffs and the first game in the elimination round will be against a team from California, the L. A. Galaxy. They have the world’s most famous superstar, David Beckham, in its lineup on August 21. All the hotels in the city are filling up fast and phones with reservation inquiries are ringing off the hook at the Sport.

What rate should the revenue manager approve to quote now for group reservation inquiries for the weekend of August 20–22? Are there any stay control measures that should be considered?

Answer 1

Total No. of Rooms= 250

The rate structure is

Rack                                         $190

Weekend                                 $159

Low season/Government    $140

Groups (of 15+)                     $130

Best available rate                 $120

Avg rate= $ (190+159+140+130+120)/5= $ 147.8

For the weekend of August 20 to 22 the forecasted occupancy is around 130 rooms. The reservations on the book are 90 guaranteed and 25 non-guaranteed reservations. The hotel expects 15 walk-ins.

July 29- The revenue manager should approve weekend rate ie. $ 159 as the questions says Aug 20 to Aug 22 is weekend and expected occupancy is more than 50%.

July 30- On July 30, the revenue manager should quote highest rate i.e $ 190 as They have the world’s most famous superstar, David Beckham, in its lineup on August 21. All the hotels in the city are filling up fast and phones with reservation inquiries are ringing off the hook at the Sport.

The hotel should take guaranteed bookings only as its quite a possiblilty that all the rooms will be filled up fast and there would be 100% occupancy on the given dates. Non guaranteed bookings should be avoided. Minimum booking days should be told.