Proposed Plan addressing

revenue management
Submitted by:
Table Of Content

Introduction
Astors Belgravi Income statement.
ASTORS BELGRAVI’ Pvt. ltd. Balance sheet
ASTORS BELGRAVI’ CASH FLOWS STATEMENT
Revenue management
Importance of Revenue Management
Scope of revenue management
Revenue management Methods
o Market Segment Pricing
o Forecasting Demand
o Inventory Allocation
o Manage Distribution
o Hotel revenue management systems
Table Of Content

 Revenue Management Formulas

 Marketing Policies
1. Safety in Hotel Marketing and Guest Communication
2. Increase the priorities on Leisure Trips
3. Shift From International to Local Travelers
4. Esteem and the Role of Flexible Cancellations
5. Investigate data and asses new hotel marketing trends because of COVID
6. Allow Potential Guests To encounter Your Hotel From Afar
 Conclusion
 Reference List:
Introduction

 ASTORS BELGRAVIA has shown tremendous growth in the last few years. The continuous growth of the
hotel indicates that the ASTORS BELGRAVIA is becoming one of the largest budget hotels in London.
However, conducting a situational analysis of OPERATIONS, MARKETING & FINANCIALS of the
hotel gives a clear view of the hotel’s performance. ASTORS BELGRAVIA was introduced into the
market with its convenient booking that offered hygienic, air-conditioned, wi-fi enabled hotels to stay in
(Tinniswood, 2019, p.34). The hotels build the network with a budget and smart marketing. The hotel is
now performing well and has a good rating on its sites as well as other channel sites. It provides various
discounts to its customers. There is huge traffic on its online platform due to the high demand for rooms in
Astors Belgravia (Baxter and Srisaeng, 2020, p.25).
 ASTORS BELGRAVI’ S Existing Situation in Terms Of OPERATIONS, MARKETING & FINANCIALS
 The following statements show the overall performance and current situation of Astors Belgravia
Hotel.
 Below is financial Information about the company.
ASTORS BELGRAVI’ S Existing Situation in Terms Of
OPERATIONS, MARKETING & FINANCIALS

ASTORS BELGRAVI’
Profit and loss account
31st December 2021
Sales $130,000

Less: Cost of goods sold $78,000

Gross profit $52,000

Expenses:

Advertising 1,500

Depreciation 5,000

Interest 2,000

Rent 4,000

Travel 600

Wages 7000

Total expenses $20,100

Net profit $31,900

Less : Drawing $30,000

Profit/loss $1,900
Continued..

 The income statement of the company shows the total cost, revenue, and profit/loss of the
company during a particular period. ASTORS BELGRAVI’s income statement for 2021
shows a net profit (Vives et al. 2018, p.743).

7.3 Balance Sheet

 The balance sheet is a financial instrument. It is always prepared at the end of
the year. It records assets, liabilities, and shareholder’s equity. The balance sheet shows
the financial position of the business. It presents brief information about the company
(what the company owes and owns).
 Assets=Liability + Equity
 ASTORS BELGRAVI’ s balance sheet for the year 2021 shows the company is having a
good balance between its assets and liabilities and can be expected to perform well in the
future.
 ASTORS BELGRAVI’ Pvt. ltd.
Balance sheet
31st December 2021

Assets $ Liabilities $

Current assets Current Liabilities

Cash $5,000 Line of Credit $2,000

Accounts Receivable $10,000 Accounts Payable $1,500

Inventory $4,000 Wages Payable $1,000

Pre-Paid Insurance $1,200 Current Portion of Term Debt $2,000

Total Current Assets $20,200 Total Current Liabilities $6,500

Capital Assets Non-Current liabilities

Machinery & Equipment $18,000 Term Loan $20,000

Automobiles $20,000 Less Current Portion -$2,000

Leasehold Improvements $24,000 Shareholders Loan $30,000

Total Capital Assets $62,000 Total Non-Current Liabilities $48,000

Equity

Initial Investment $20,000

Retained Earnings $7,700

Operational Information's

 Operational Information’s
 Cash Flows Statement
 The below is the cash flows from operational activities. A cash flow forecast helps in
answering the question if the business will run out of cash, then what could be the major
step the company can take to run the business. It helps to keep the solution ready before
the problem occurs.
 ASTORS BELGRAVI’s expenses of $300, monthly expenses of $500, and a yearly draw
of $1500, It plans to spa service in the hotel, so it will buy spa equipment’s of $5000,
storage equipment of $1000, and some office equipment of $2000.These cash flows are
described below the cash flow statement (Baker et al. 2019, p.27).
Below is ASTORS BELGRAVI’ s cash flow statement

ASTORS BELGRAVI’
CASH FLOWS STATEMENT
31st December 2021
Year 0 Year 1 Year 2 Year 3

Cost of goods sold 100 100 200

Disbursements

Accounts payable 0 100 100

Overheads 300 500 500 500

Drawings 1500 1500 1500

Spa service equipment 5000

office equipment’s 1000

storage equipment’s 2000

Total 8300 2000 2100 2100

Continued..

 Cash flow can be calculated by using the below formula-

 STARTING CASH BALANCE + RECEIPTS - DISBURSEMENTS = ENDING CASH
BALANCE
 For the year 0 ending cash balance (15000-8300) =$6,700
 For year 1 ending cash balance is 6700+500-2000=$5,200(The present year’s ending cash balance
will be the following year’s starting cash flow)
 For the year 2 ending cash balance=5200+1000-2100=$4,100
 For the year 3 ending cash balance=4100+1500-2100=$3,500
 Since there is no negative balance in the cash flow, it can be predicted that the hotel will perform
well in near future. If there would be a negative cash flow, then the management would have to
decrease the expenditure and increase the revenue to run the business smoothly.
 Revenue management

 Revenue management refers to the strategic method that the managers use to
sell the service and perishable inventory to the target customer at right time
to increase revenue. It includes hotel services, food and beverage service
provided by the hotel, spa facilities, fitness services, and other amenities
provided by the hotel. Revenue management helps in evaluating what
customers to pay from different segments. This can be measured by
evaluating the supply and demand of the hotel rooms (Aydin and Birbil,
2018, p.183).
 Every customer has a pay range, from a minimum amount to a maximum
amount the customer can pay. Basically, revenue management is convincing
the customer to pay at his maximum range and buy extensions and become a
repetitive visitor. Hotel prices are fluid, which means they can change very
frequently. So, the manager should understand that the hotel prices can be
dominated to increase revenue.
 Importance of Revenue Management

 Successful revenue management in the hotel industry is to provide the

right services to a particular segment of customers such as providing
guest rooms for the travelers, banquets for the people who want to
celebrate something, the married couple, family rooms, rooms for friends,
or design rooms for the business people.
 Every customer has a different need for room identifying their demand
and providing the correct room according to their need. Setting price for
the different segments of guests is another important factor in revenue
management, for example, setting a low price for a middle-class family
and a higher price for the business professionals or the people who can
pay a high amount for a hotel (Webb et al. 2020, p.89).
Scope of revenue management

 The hotel managers can use the hotel management techniques to evaluate the total
revenue from
 A particular guest or group: A company applies the revenue management technique to
evaluate how much revenue can be earned from a particular segment of customers or a
group for example Travelers who opt for hotel rooms are more price sensitive (Pimentel
et al.2018, p.108).
 Telephone services:
 Wi-Fi services.
 Food and beverage services.
 Fitness services etc.
Revenue management Methods

1. Market Segment Pricing

 Market segmentation pricing is an important part of the management strategy as it helps in categorizing the guests
that visit hotels. For example, International travelers have different preferences than those on a budget, so the
hotel needs to know their customer and their needs according to the different customer segments the hotel can
charge different prices for the same hotel.
 Some other factors also can be taken into consideration in order to create different segments of customers such as
demographic factors like age, gender, marital status, etc., purpose like business, sport, events, vacation, ceremony,
etc., and booking channels like online or offline and so on.

2. Forecasting Demand
 Hospitality customers’ demand is fluid. It can be changed depending on different factors such as someone’s
income or according to the Seasons. Demand forecasting is the evaluation of previous demand with the present
and future demand predictions. Based on this it can be predicted when demand will go up or down the price of the
product or service can be influenced. This process is called Forecasting demand. This process is a very important
part of revenue management as it helps in fixing the prices and deciding the marketing strategies etc (Huynh,
2018, p.105).
 Continued..

3. Inventory Allocation
 Basically, inventory means the product, and here the product is a room in the hotel, the inventory is
the rooms of the hotel. So it must be planned accordingly and distributed rooms online and offline so
that there will be possibly less chance of rooms being vacant. As vacancy of rooms will be loss of
hotel. Demand forecasting helps in building various segments and Mediums, and building
distribution strategies. This will manage to distribute rooms accordingly and make sure there is no
shortage of the room and increase the revenue (Alrawadieh et al. 2020, p.338).
4. Manage Distribution
 Creating a distribution channel is an important activity of Distribution management. Distribution
Mediums are closely related to guests segments. So depending on the inventory type, the manager
can choose the segment of the customer and set the price for the target customers.
 Hotel revenue management systems

The revenue management system is software that helps the management to

perform the revenue management tasks efficiently and effectively. It helps
the management to be up to date about the competitor’s prices and trends
in the service (Guillet and Shi, 2019, p.22).
Revenue Management Formulas
Revenue management formulas help in evaluating the
performance of the hotel and help highlight the areas that can be improved
to increase the revenue of the hotel(Bandalouski et al 2018, p.221).
Continued..

The following are some KPIs (Key Performance Indicators) that help to calculate the revenue of a hotel ADR (Average Daily Rate):

• Total Room Revenue

• RevPAR (Revenue per Available Room):

• GOPPAR (Gross Operating Profit per Available Room):

• TRevPAR (Total Revenue per Available Room):

• RevPASH (Revenue per Available Seat Hour):

• ALOS (Average Length of Stay):

• LOS (Length of Stay)

• EBITDAR

• CPOR
Continued..

 ADR (Average Daily Rate): ADR shows the average revenue of an opted room per day. It considers only occupied
rooms so it will help in keeping the record of revenue per room also it will help in forecasting the future revenue
considering the past ADR.
 Average Rate Per Day = Revenue of room / Number of Rooms Sold
 Total Room Revenue: Total room revenue shows how much revenue a hotel earned for all occupied rooms for a
particular period of time.
 Total Revenue of Room = Number of Sold Rooms * Average Rate per day.
 RevPAR (Revenue per Available Room): RevPAR is a KIP that helps in evaluating the performance of the per-room
revenue and occupancy rate. In simple words, it takes all the rooms into consideration and calculates how many
rooms are occupied during a period of time kind weekdays or weekends or months, etc.
 Revenue per Available Room = Total Room Revenue / Number of Available Rooms
 GOPPAR (Gross Operating Profit per Available Room): GOPPAR is the net revenue after all the expenses such
as telephonic bills, salaries, electric city bills, taxes etc. It can be used to determine the overall performance
and revenue of a hotel.
 Gross Operating Profit per Available Room = Gross Operating Profit (GOP) / Number of Available Rooms
 TRevPAR (Total Revenue per Available Room): TRevPAR is the extra revenue that a hotel earned from spa,
fitness, food or beverage, etc. services per seat per hour.
 Total Revenue per Available Room = Total Net Revenue / Number of Available Rooms
Continued..

 RevPASH (Revenue per Available Seat Hour): RevPASH is revenue that a hotel generates from a particular food or
beverage service provider from the hotel such as a bar or restaurant within the hotel.
 Revenue per Available Seat Hour = Total Outlet Revenue / (Number of Seats * Opening Hours)
 SDOS (Standard duration of Stay): SDOS is KOI that measures the minimum time a person stayed there at a
particular time period.
 Standard Duration of Stay = Total Occupied Rooms / Number of Bookings
 DOS (Duration of Stay): It is the number of night customer is staying. It helps to keep a track of occupancy and
rates.
 Length of Stay = Check-out Date - Check-in DateEBITDAM (Earnings before Interest, Taxes, Depreciation,
Amortization, and Maintainance or lease costs): It helps in evaluating the hotel’s financial performance and
profitability when expenses are higher than the expectation.
 EBITDAM = EBITDA (Total Revenue - Expenses) + maintenance or lease cost
 CPFR (Cost per Filled Room): It helps in tracking the room’s profitability.
 Cost per Filled Room = Total Departmental Cost of Rooms / Numbers Sold
 Occupancy Rate: It can be applied to measure how the hotel is performing over a period of time.
 Occupancy Rate = (Total Rooms occupied/ Numbers Available) * 100
Marketing Policies

 Hotel Marketing is an umbrella term, which alludes to the different advertising systems and procedures
that are in use, to advance their business and establish a positive connection with clients. Basically, it is
tied in with making an inn as engaging as could be expected, drawing in whatever number of visitors
would be prudent.
 In the computerized age, inn promoting is done on the internet, as well as face to face, and the brands
need to amplify their presence through site traffic, web-based entertainment, email, and a variety of
channels.
 Inside the hospitality industry, the rivalry is one of the most significant difficulties for individual
lodgings to deal with. Hotel marketing is fundamental, as helps the inns to advance their property,
exhibit their extraordinary elements, and makes sure that it keeps their individuality from rivals and
lays out the benefits of remaining there.
 Finally, having knowledge about the trending marketing patterns and keeping in touch with clients
with promotions can help hotel proprietors to boost the number of appointments they produce, and the
income they acquire. (Jiang, Y. and Wen, J., 2020, p.74)
1. Safety in Hotel Marketing and Guest
Communication

 Perhaps the greatest pattern inside hotel marketing is connected to the expanded need to
feature well-being procedures and cleanliness inside your promoting content and visitor
interchanges. All things considered, voyagers need consolations that you treat the danger
of COVID in a serious way and are doing whatever it takes to guard them as could be
expected.

 Cleanliness measures and security arrangements are at the actual very front of clients'
brains while going with booking choices and how well you convey the ways you chose
can effortlessly be the contrast between creating deals and neglecting to do such.
2. Increase the priorities on Leisure Trips

 A few lodging focuses quite a bit of their advertising endeavors on business guests, yet the
mix of movement limitations, telecommute approaches, limitations on mass get-togethers,
and general difficulties are the reasons why many business meetings got canceled, and it
affected the business travels, as it went down exponentially.
 Nonetheless, due to the pandemic, many individuals are looking out for breaks. Hence,
while voyagers are more doubtful about traveling than they used to be previously, interest
in recreational breaks is always there. In light of this, those in the inn the executives might
be astute to consider focusing the attention on relaxation-based showcasing
correspondence.
 Contingent upon the area and offices, one can target various kinds of crowds there,
including couples, families, little gatherings of companions, or mixed gatherings. You may
likewise wish to consider changing a portion of the channels you use and making
comprehensive bundles that emphasize recreational tourists, to energize more appointments
3. Shift From International to Local Travelers

 Another hospitality pattern to consider is an expanded focus on nearby tourists, instead of

global ones. This has mainly been affected by movement restrictions during the COVID
situation, which has either hindered travel or implemented quarantine prerequisites on
voyagers to and from certain specific nations.
 A lot of inns have answered by shifting their marketing endeavors to focus on nearby clients,
or possibly clients from adjoining nations. This might mean featuring various parts of your
inn, for example, exercise center offices, wi-fi access, and the capacity to do remote work
from your lodgings or from devoted workspaces.
 A few hotels have likewise investigated administrations like food conveyance and you might
actually make your inn different from others by conveying an eating experience to
individuals' entryways through extra administrations, such as QR code Spotify playlists
(Huang et al. 2021, p.102986).
4. Esteem and the Role of Flexible
Cancellations

 Due to the monetary factors emerging from the Covid pandemic, a number of lodgings met themselves
in positions where they can't contend absolutely with the cost of lodgings. Be that as it may, you might
possibly contend in light of significant worth. All things considered, clients are normally glad to pay
something else for astounding offices and top-notch client care.

 Increasing the value of your suggestion can take many structures. You could, for example, make
bundles that add room administration morning meals, longer stays, or additional administrations,

 Along with client care, one of the important facts those in the inn business need to remember is that
COVID has managed a great deal of helplessness. Clients could without much of a stretch face the
sudden burden of new hindrances, or even got positively reported for the viral infection. Showing
cognition through an adaptable abrogations strategy can go far towards empowering appointments in
any case and can assist you with focusing away from negative promotions.
5.Investigate data and asses new hotel
marketing trends because of COVID

 As the pandemic has created a commotion, a portion of the essential ideas stay as evident as
could be foretold. It is as still important to utilize the data you have access to to reconcile
informed options, so carve out an opportunity to investigate site information and data from
your property the executive's framework, and utilize this to illuminate your inn advertising
endeavors.
 This can assist you with distinguishing which socioeconomics wants to come to stay at your
lodging, as well as what the market sections have become less inclined to travel. Whenever this
part is finished, you can locate opportunities for development, focus your endeavors around
engaging that socioeconomics and take on the most applicable in showcasing patterns.
 This could mean geo-focusing on your advertising endeavors, or in any event, going to new
promoting channels. It might likewise bring about you going to various lodging advertising
patterns than you in any case would.
6. Allow Potential Guests To encounter Your
Hotel From Afar

 As expressed, COVID has made another vulnerability among guests' movements, yet
imagine a scenario in which there was an innovation you could go to solve a segment of
these issues. The uplifting news is, that computer-generated simulation visits offer
exactly this. Utilizing VR innovation, possible visitors and B2B clients can really
encounter your inn from a remote place.
 This can be especially powerful during the booking system, which is the reason VR visits
are progressively being incorporated into booking motors. For those keen on your
business or occasion choices, VR implies they can likewise see your wedding, occasion,
or supper offices and book without requiring an in-person review first (Gursoy and Chi,
2021, p.279).
Conclusion

 Revenue management is a concept that is used by managers in the hospitality sector to

increase the revenue of the organization over a period of time. Earlier this concept was
started in the airline industry but later it became popular and adopted by other hospitality
industries. The hotel industry adopts this idea to increase the number of guests who visit
the hotel. The concept is mainly used to forecast the demand and supply of the booking
rooms services. The forecast demand helps the management to set the future price
according to the current and future demand forecast (Antonio et al 2019, p.301).
 Several factors should be taken into consideration before forecasting the future demand
or revenue generation by Astor Belgravia. Perfect revenue management has its main
factors pricing, distribution, and yield management. Effective revenue management has
been done through segmentation, overbooking controls, and forecasting (Vives et al.
2018, p.240).
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3215
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Thank You