Case 2: Holiday inn .. the right time at the right price

Holiday inn hotel is running smart revenue management system by knowing lead time to book for each market segment through historical records, for example Leisure groups usually book few months in advance. They understand this pace of bookings that helped in planning their marketing strategy to fill the vacant rooms through the season. Lowering the rate is not always the best option, Holiday inn have a planned rate calendar for low and high seasons. Some suggested promotions are Advance Saver (save X% on early bookings), Stay 3 Pay 2, Free Breakfast, Minimum Night Stay, Early Check-in or Late Check-out deals, Romance Package and Dinner Package.

1. Check out the three scenarios below. Which is a better outcome for this 100-room property? Why?

Scenario Hotel 1 Hotel 2 Hotel 3 Total Rooms to Sell 100 100 100 Occupancy (Occ) 100% 50% 80% Average Daily Rate (ADR) $100 $220 $175 Total Revenue $10,000 $11,000 $14,000 Revenue per Room (RevPAR) $100 $110 $140