We will build a Flexible Room Rate packages will be easy :
- Calculate the savings to the customer
- Allocate package revenue to departments and amenities
- Provide a record of all packages offered
- Test potential package offers
4 steps
Step 1 define season names or date ranges for up to five pricing seasons.
Step 2 - Enter Room/View types at your property. Then, enter both benchmark rates and cost per occupied room, by season.
Step 3 - Work with
other departments to create a list of all property-related components as well
as their retail price and cost to the property by season. Both retail price and
cost to property should exclude any gratuity, as that will be calculated
separately.
- A property-related component is
defined as a non-room package component that can be discounted. In other words,
this component's generated revenue is allocated back to a department managed by
the property.
- For those components that are service
related, and cost cannot easily be calculated, enter the lowest price that
would be acceptable for the component. This is your discount threshold.
Step 4 - Work with
other departments to create a list all outside vendor components along with the
retail price and cost to the property by season.
- An outside vendor component is a
non-room package component that cannot be discounted; its revenue is a fixed
amount allocated to the vendor and is not managed by the property.
Second Step
Once the Inputs tab is complete, the
rooms and components entered can be combined to create packacges. This
spreadsheet will automatically calculate:
1) Package Price
2) Cost to Customer
3) Finance Allocations
4) Profit or Loss From Each Room and
Component
In the Package Template, follow the
instructions in blue to create a package. Make sure that all cells that are
highlighted in yellow have been filled in.
Instuctions for Completing Package
Template:
Step 1 - Enter
package name, rate program, select room/view types that this package will apply
to, and enter the number of nights (paid and comp) of the package.
Step 2 - Enter the
percent discount off of retail that you would like to use each season to
price the package. There are two
discounts entered, the first for the room and the second for property-related
components. The first discount will be applied seasonally to the benchmark rate
entered on the Inputs sheet for each room/view type selected in Step 1. The
second discount will be applied seasonally to all property-related components
selected in Step 3 (below).
Step 3 - If the
package being created should not be offered during a season, use the
corresponding hide season button.
Step 4 - Select the property-related components and
the outside vendor components included in the package and determine if each
component is Per Night (PN) or Per Stay (PS).
If it is Per Night, the guests will receive the component during each
day of their stay; if it is Per Stay, they will receive it only once during
their stay. All components selected will have the same percent discount entered
in Step 2 applied seasonally to the retail price that was entered on the Inputs
tab. If a component requires gratuity, the gratuity percent should be entered
in the yellow column to the right of the component price. No discount is
applied to the gratuity.
Step 5 - Select the
property-related components and the outside vendor components included in the
package and determine if each component is Per Night (PN) or Per Stay
(PS). If it is Per Night, the guests
will receive the component during each day of their stay; if it is Per Stay,
they will receive it only once during their stay. No discount is applied to
these components, and any gratuity should be included in the full retail price
and cost entered on the Inputs tab.
Step 6 - Review the
calculated recommended package rate which is based on selections in steps 1-5.
Now, choose an option for calculating the actual package rate. The first option
is to accept the recommended rate. The second option is to manually type in
your own rates based on the recommendations generated by the tool, such as rounding
the recommended rate to the nearest whole number. The third option allows you
to set a daily premium amount increase over daily room rate. You can use the
recommended room rate premium for guidance in setting this number. This option
should used if you are building the package in MARSHA to mirror off of room
rate.
Step 7 - Review the
pricing for the pacakge along with the revenue distribution and profit and loss
sections to determine if the pricing is financially acceptable while showing a
value to the guest. Also, compare the
pricing recommendations to pricing being offered for similar packages by your
competitors.
Step 8 - Once you
have completely entered a package and are satisfied with its expected profit,
click on the "Save Package" button. This will copy the package to a
new tab, which will carry the same name that was entered in Step 1.
Step 9 - Return to
the Template tab and click on the Reset Template button in order to create a
new package. Please note, the drop down boxes must be manually reset.
Step 10 - Build the
packages in PMS. Please note, the calculations and drop down boxes will
continue to work within each saved package tab. This allows the user
flexibility in changing a package's price, season, components, discounts,
etc... throughtout the life of the package.
The Fun Part is Daily Revenue Distribution Methodology:
Room
Revenue Distribution:
First, the tool takes the full retail package rate and backs out all hard costs (outside vendor components and gratuity). Then, the total retail room rate is divided by the retail package rate without hard costs. This percentage is applied to the actual package rate, with its hard costs backed out. This dollar amount is then divided by the number of paid nights of the package.
Room
Profitability:
This number is calculated as the difference between the daily revenue distribution and the cost per occupied room entered on the inputs screen.
Comp Room Note:
If a comp room is part of the package, you will see two more rows on the Package Profitability that shows 1) The pro-rated room rate, including comp rooms. This takes the cost per occupied room for any comp room(s) and spreads it to the daily room profitability. and 2) Total Package Profitability with Comp Room Cost, which shows total package daily profitability with the comp room's cost taken into account.
Property Component Distribution:
This works similarly to the Room Revenue Distribution in that the retail property component price is used as a percent of total retail package rate (excluding hard costs). This same percentage is applied to the actual package rate to come up with the revenue distribution of a property component. It is divided by paid nights for the daily distribution.
Property
Component Profitability:
This number is calculated as the difference between the daily revenue distribution of the component and the corresponding component cost entered on the inputs screen.*
Comp Room
Note:
If a comp room is part of the package, and there are Per Night property components, then the cost of these components on the comp night is distributed across all paid days to allow for the component cost to be covered.
Outside Vendor Components:
View detailed dataset analysis on my GitHub portfolio for booking patterns
Check out my detailed hotel data analytics projects on GitHub Portfolio
📊 Forecast Accuracy: Forecast vs Actual
📈 Segment Trends: Revenue Mix by Channel