Resort Rate Room

Resort Rate Room Strategy is one of corner stone of Revenue Management Setting the correct pricing and inventory management strategies for a resort property’s room pools is a critical component in the resort pricing strategy.

Re-evaluating the property’s

• • Room Pool definitions and descriptions,
  • Analyzing and seasonally adjusting the pricing structure across the room pools, and
  • Measuring room pool mix and rate efficiency,

resorts can ensure that they are efficiently utilizing their room pools to maximize revenues and profits.

Resort Rate Room / Seasonality

Changing according to Seasons which changes with wide fluctuations in demand and price sensitivity.

Factors such as (but not limited to) group base, holidays, weather, and school vacations can have a major impact on seasonality and may cause it to differ year over year.

On the other hand, seasonality can easily influence pricing more than it should by encouraging operators to set the price too high or too low when seasons, and changes in seasonality, are not fully understood.  Identifying and continually reevaluating seasonality is therefore a key factor in pricing a resort property correctly year round.

To properly establish and adjust pricing seasons in order to maximize revenue and market share

Resort Rate Room / Recommendation:

When determining seasonality for a property, it’s very important that seasonality be evaluated for each segment: Transient, Group and Contract.  Thorough understanding of the three main segments and their individual seasonality trends enables an effective pricing strategy

Setting the correct Rate and inventory management strategies

Resort Property needs to take into consideration 3 Keys activities ,

Analyzing & Seasonally adjusting the pricing structure across the room pools,

Measuring room pool mix and rate efficiency,

• Determine room’s view type
• Analyze, Set appropriate  and season
• analyze Demand Strategy

Resort Rate Room / Three key activities for Managing room pools:

• Determine each room’s view type and assign rooms to room type
• Analyze, set and seasonally adjust the appropriate Best between Room Type

• Review the room pools you currently use at your property. Analyze your current Room Type structure and discuss with the property’s senior leadership whether there is an opportunity to reduce the number of Room Type.  Typical designations might include Sea View, Partial Sea View, and Garden View, in addition to Suites.  If your resort has only one view, you could consider classifying the rooms based on parameters other than view (e.g., size, balcony, location, etc.).
• The new Resort Demand Strategy Tool can be used to analyze Room Type and determine which Room Type can be merged. Ideally, Room Type that are combined should have a similar average seasonal rate, price sensitivity and demand.  Aligning room types with similar metrics will make pricing and measuring the performance of each Room Type much easier.  Note that each Room Type should have a sufficient amount of demand and be able to command a price premium.  They should also comprise a reasonable amount of your property’s inventory.
• Generally, room pools that make up less than 15% of capacity should be reviewed closely to see if they can be re-classified.
• Conduct a physical inspection of all rooms -Director of Operations create a map of all the rooms on a flip chart. Agree on how each room should be reclassified to fit into the chosen Room Type.
• Work with the Front Office Manager to identify rooms and room types that customers are asking for. Understanding which rooms are being requested will help you reclassify your room and assign the right rooms to each room type.

 For suites, decide whether you want to establish a single SUIT Room Type or whether you want to manage suites in separate room pools.

• • One option that has worked for some of our resort properties is to establish one Room Type called SUIT where all suites are managed together, and then manage the sale of the suites (rates and inventory) by individual rate programs (i.e., in the VRPA, cap the number of rooms for a particular suite). To implement this, you should:
    • Add suite descriptions to the facts for each individual rate program.

Another option is managing suites in separate Room Type.  If you have a group of suites that are similar in type and/or location, it might make sense to put them in a separate room pool.  By placing suites in separate room pools, you ensure that they are visible in multiple sales channels (e.g., Online Reservation-Book-On-Line

Each room’s designated view should be reviewed annually during pricing season; this ensures that view types are kept up to date and take into consideration any new obstructions such as buildings, trees that have grown and matured, etc.

• Inspect each room. Together with the Director of Operations or Front Office Manager, inspect each of the property’s rooms.  Note for each room what view you see when standing at the window.
  • For example, if you stand at the window and see the ocean, the room would be considered “ocean view”.

If you have to step onto the balcony and look to one side or the other, it would not be considered a premium view room, but a partial view room

• Analyze demand by Room Type.

  • The Demand Strategy Tool
  • By selecting the Room Type you want to analyze, you can view seasonal room Nights, mix, ADR, revenue, demand, and price sensitivity at the Room Type level, comparing this year’s numbers to last year.

• • You can calculate occupancy and RevPAR by Room Type by dividing Room Nights and revenue by the respective Room Type capacities for the time frame.
  • You can also calculate room rate efficiency and demand trends for each Room Type, which will help you determine opportunities for adjusting the premiums you are currently charging.
• Use the tool to calculate Room Type metrics such as room rate efficiency by room type, and paid occupancy by room type.

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