TRM73001 Revenue and Yield Management for Tourism and Hospitality
Assessment 1: Revenue and Yield calculations
This assessment is for these students only: Sydney – Hotel School , Melbourne – Hotel School
This is an ‘open book’ assessment which will be held during your scheduled Week 5 tutorial. The assessment consists of 20 calculation/multiple - choice questions with duration of 35 minutes . Questions are randomised so each student will be get different questions. The assessment focuses on lecture and tutorial contents of Weeks 2 - 4.
It is fine to bring notes on your own laptop and a non - programmable calculator, but you are not permitted to use an external communication platform e.g. phone, email, Facebook or other social media and communication apps etc., otherwise you will get zero marks for the Assessment 1.
You can use background document; lecture /tutorial contents of Weeks 2 to 4; all information contained within HOTS e.g. Market Research reports, User Guide, all Help files contained in Decision Tabs.
Assessment 1 - Sample Questions
1. Your hotel has 100 rooms to sell. This Saturday night has enough customers to sell 125 rooms so you will be refusing 25 requests for rooms. What is this an example of?
- Distribution channels
- Differential pricing
- Constrained supply
- Yield management
2. What is an algebraic equivalent of the formula: Sales = Costs + Profit ?
- Prof it = Sales – Costs
- Costs = Sales + Profits
- Costs = Profit – Sales
- Profit = Costs – Sales
3. What is the industry term for t he average revenue generated by each occupied guestroom during a defined period of time?
- Total Rev PAR
4. What is the industry term used to describe the selling of rooms which are not actually available for sale?
- Yield management
- Revenue management
- Maximum ADR
5. Which industry was the first to use Yield Management principles?
6. Your hotel has 250 rooms. You sold 175 rooms last night at an ADR of $200.00 . What was your occupancy % last night?
- 87.5 %
- 70 %
- 114.3 %
- 80 %
7. Your hotel has 250 rooms. You sold 1 75 rooms last night at an ADR of $200.00. What was your RevPAR last night?
- $ 140.00
- $ 35.00
- $ 125.00
- $ 160.00
8. If your hotel offered the following discounts, how much would a guest pay if they stayed for 4 nights during the week and bought a non - cancellable room?
- $ 9 0.00
- $ 80 .00
- $ 70 .00
- $ 60.00
9. Based on the revenue split shown below, how much would be allocated to rooms department for conference business?
- $ 8 4. 50
- $ 92.95
- $ 12 6.75
- $ 42 . 25
10. If you are forecasting your revenue for the month of February to be $1,000,000, how much would you spend on marketing per week?
- $ 25000
- $ 3 500
- $ 80 00
Assessment 2: HOTS simulation group report
This group assignment is worth 4 0% of your overall grade . You r group report consists of two parts. The first part is an analysis of your hotel’s performance based on the decisions made on rate s, distribution channels, advertising, social media and strategies your team implemented in Year 1 of the HOTS simulation. The second part is a business plan for Year 2 based on the outcome of Year 1. T he mark you get as a team is moderated by your contribution to your team , and evaluated by your team members. Peer evaluation scores will be used to moderate your individual mark
The recommended report template (see enclosed) includes the following items, but not limited to:
Table of contents
2. PERFORMANCE AND FINANCIAL ANALYSIS
Analyse the Year 1, providing data in graph form (showing figures, see example s on Black Board). Each of the sub - points below requires an analysis of your performance . The first line should provide specific figures/performance for that particular year, for example, the total revenue was $..., and net income was $ .... This will be then followed by a discussion which should briefly outline decisions/strategies, performance, unusual trends, expenditure etc.
2.1. Total hotel revenue and total hotel net income
Include figures of total hotel revenue and total hotel net income, explaining performance.
2.2. Rooms department revenue and rooms net income
Include figures of rooms revenue, room net income, and % of total revenue, explaining performance/rate decisions/strategy.
2.3. Occupancy%, ADR and RevPAR
Include figures of average occupancy, average daily rate and average RevPAR, explaining performance and rate strategy decisions.
2.4. Return on capital employed (ROCE) ( plot annual figures only )
Include a description/definition of ROCE. ROCE should be followed by an analysis of your performance. Check ROCE formula to provide an adequate explanation of performance.
3. BUSINESS PLAN FOR YEAR 2 (based on the outcome of Year 1 )
Assessment of current environment (as of January Year 2 ). Your business’s Strengths and Weaknesses a re internal factors, while the Opportunities and Threats are external trends or facts.
Each point identified will need supporting evidence. For example, i f you have good occupancy, give your occupancy % provide evidence from HOTS.
Each Opportunity and Threat requires a reference to support the fact/trend discussed. The majority of these references should be from HOTS documents. Do present information in a table format in bullet points.
- 3.1.1. Strengths
- 3.1.2. Weaknesses
- 3.1.3. Opportunities
- 3.1.4. Threats
Each objective must b e SMART i.e. Specific , Measurable, Agreed upon (among your team) and Time - based. Four to six objectives are required including both financial and marketing objectives which can be presented in point form.
You might consider to s et /adjust financial targets for the following:
- Rooms’ Occupancy %
- ADR (Average Daily Rate)
- RevPAR (Revenue per Available Room)
- ROCE % (Return on Capital Employed)
Strategies are what HOTS decisions you would like to be implemented for Year 2. These can be a mix of areas that you are doing well (continue) and areas that are poor (improve). Opportunities and Threats that have been identified should also be addressed.
A list of headings are suggestions only but more can be added. For example, after 3.3.2 you could then have 3.3.3 labelled ‘Conference market’ ( not ‘Other’ as the headings need to be descriptive ). For each discussion on market segments, e.g. Corporate and leisure, discuss the basic HOTS decisions first. For example, if you focus corporate market in Year 2 , what weekday rate you are planning to charge, how do you plan to promote weekday rooms, what discounts you are offering etc. This information is the minimum level required for PASS and CREDIT mark.
Then you can introduce external ideas which are referenced from journals. For example, you may read the latest research which identified corporate want mobile check in opportunities. This would then be a recommendation in 3.3.1 to install this technology. This additional information is required for a DISTINCTION.
3.3.1. Corporate/weekday Market
Discuss each of the following: Product, promotion and sales, pricing and distribution, as relevant to the corporate market
3.3.2. Leisure/weekend Market
Discuss each of the following: Product, promotion and sales, pricing and distribution, as relevant to the leisure market
3.3.3. Other market segments ( use a descriptive heading e.g., conference market)
Discuss each of the following: Product, promotion and sales, pricing and distribution
A short paragraph and no new information
- 6.1. Monthly Indicator Report for Year 1
- 6.2. Current Balance Sheet (December Year 1)
- 6.3. Statement of Income for the whole of Year 1
Assessment 3: HOTS simulation reflective writing
You are required to prepare a critical and in - depth analysis on your contribution you made to optimise your hotel profit over the past two years. The report should 1/ discuss the tactics / strategies you have applied to achieve your year 2 target(s) and its impacts and 2/ benchmark your hotel performance (year 2) against the year 1 performance, other hotel teams and hotel industry performance (STAR) with supporting evidence from the HOTS simulation. Each student should select one aspect of revenue management , for example, rate management, distribution channels , advertising, financial stability, social media etc. , to focus on. Additionally, y our report should 3/ reflect the experience s you learnt through working with your revenue management team and 4/ recommendations for your hotel manager.
The recommended report includes the following items, but not limited to:
Title page (SCU cover is not required)
- Hotel name
- Student name (student ID )
- State the purpose of your report.
- Justify the aspect of revenue management you selected to discuss , for example, rate, overbooking, advertising, social media, target market, calendar of events, F&B, gross profit etc.
- Recall the target which you set in your business plan year 2 i.e. select one target only
- Explain (What) and justify (Why) the decision ( s ) i.e. tactics/strategies you made to achieve your set target .
- Compare * your achievement/ impacts/ outcome/benefit with
- Your set target – Business Plan Y ear 2 (i.e. discrepancy)
- Your hotel performance Year 1 (increase or decrease)
- Hotel industry ( Comp s et – indexes : MPI, ARI, RGI ), if relevant
- Discuss your contribution and/o r lessons / experiences, you learnt through working with your revenue management team
- Recommendations for your hotel manager to implement in year 3 (related to your discussed strategy) .