Business targetgroup: Difference between revisions

From Emerald Forest Hotel
Jump to navigation Jump to search
← Older edit
No edit summary
No edit summary
 
(44 intermediate revisions by the same user not shown)
Line 1: Line 1:
[[Category:Hotel info]]__NOTOC__ __NOEDITSECTION__
[[Category:Info pages]] {{Template:New Skin Box}}
''→ Go! [[:Category:Hotel info]]'' <br>
''→ Go! [[Introduction to Hotel]]''</div><br>
{{Running competition}}
{{Template:New Skin Box}}
== Size of the market ==__NOEDITSECTION__
== Size of the market ==
There is [[overcapacity]] in the hotel market, which makes it hard to reach [[occupancy rate]]s above 80% during weekdays. But for any
There is [[overcapacity]] in the hotel market, which makes it hard to reach [[occupancy rate]]s above 60% during weekdays. It is not clear whether this is due to demand or supply side, but for any individual hotel there is enough market demand to get the hotel profitably occupied during both weekdays and weekends.<br>
individual hotel there is enough demand in the market to get the hotel profitably occupied during both weekdays and weekends.
We distinguish two different targetgroups, customers and markets
* [[leisure targetgroup|leisure market and mainly leisure guests]]
* [[business targetgroup|business market and mainly business or corporate guests]]
We now look at the second one.
</div><br>
{{Template:New Skin Box}}
== Sales prices ==
Weekdays account for 4 of the seven weekdays and this means (rounded up) 57% of the total of all available hotel nights (see [[occupancy rate]]). The guest are business guests. <br>
Hotel revenue comprises the average (sales) prices times the number of bookings.
A maximum occupancy rate would mean that all 100 rooms are occupied during all weekdays, so 52 weeks x 100 rooms x 4 days (Monday, Tuesday, Wednesday and Thursday). So 20,800 ''rooms'' booked for one night. Check the [[leisure targetgroup|leisure targetgroup]] page for more information, which will mainly be weekend guests.  


== Sales prices ==__NOEDITSECTION__
Weekdays prices in the past ranged from € 100 to € 140 maximum per room per night, including breakfast.
Revenues comprises the average (sales) prices times the number of bookings.
* the € 100 price has been the last-minute price during weekdays.
A maximum occupancy rate would mean that all 100 rooms are occupied during all of the weeks, so 52 weeks *
* the € 140 price has been the [https://www.xotels.com/en/glossary/rack-rate rack rate] during weekdays. The  rack rate being the (highest) published price without discounts, special deals or commissions. <br>
100 rooms. Also, check the page for information on the [[leisure targetgroup]] which will mainly be the guests on the weekends.
Revenues have been calculated on the [[occupancy rate]] page, you can find the numbers in the [[operating review]].  


Prices during weekdays (especially interesting for business guests) in the past were ranging from € 100 to € 140 maximum per room per night including breakfast.
Of course, there are many different pricing strategies you could apply throughout the year. However, to keep things simple, the family chose not to work with seasonal pricing, but only differentiated between weekdays and weekends. You should continue using this approach. You are limited to just four room rates. Any additional pricing elements or promotional discounts must be accounted for through your marketing budget or as part of 'other costs' under Decision 10. <br>
* the € 100 price has been the last-minute price during the weekdays.
* the € 140 price has been the [https://www.xotels.com/en/glossary/rack-rate rack rate] price during the weekdays. The (highest) published price with no discounts, no special deals or commissions. <br>


The business target group will be of importance during the [[weekdays]]: so Monday to Thursday night (4 nights per week). Thus, the weekdays make up 4/7 of the total days, so around 57% of all days. <br>
The schedule below provides an overview of the situation as you take over. All your pricing decisions must adhere to this structure.
During weekdays the rooms will be occupied by 1 person only. The total number of available nights during the weekdays is 100 rooms for 365 days and with 4/7 part weekdays, so about 57% is a maximum of 20,748 room nights available on weekdays. <br>
The occupancy rate has been 50% over the years, so 10,374 weekdays are occupied as you take over, at an average price of ((€ 100 + € 140)/2) € 120 so € 1,244,880. This is the revenue from renting out the rooms only. There are additional revenues from food & beverage and other revenues linked to the room's occupancy.<br>


As you take over in Year 0 and there is a total of 10 hotels in your city, altogether the demand for weekdays rooms was 10 hotels x 10,374 = 107,740. After all of your decisions and the decisions of your competitors, this demand will never be exactly the same in the years when you run the hotel. It depends on many of your decisions. But keep a close look at this benchmark!
<center>
{| class="wikitable"
!colspan="6"|Pricing system at your hotel
|-
| '''Days of the week'''
| '''Rate type'''
| '''Price'''
| '''Main Target group'''
|-
| Weekend
| Last minute
| €80
| Mainly Leisure
|-
| Weekend
| Rack rate
| €100
| Mainly Leisure
|-
| Weekdays
| Last minute
| €100
| Mainly Business
|-
| Weekdays
| Rack rate
| €140
| Mainly Business
|-
|}
</center>


== Maximum in this target group == __NOEDITSECTION__
== Type of customers ==
The maximum number of hotel nights to be sold during the weekdays would be: 4 out of 7 nights so 57%: <br>
There is no specific information on any type of guests: We do know that business people mainly stay on weekdays. The hotel has always aimed at the business marketgroups and secondly at leisure guests. Therefor the weekdays prices are above the weekend prices. The type of customers attracted so far is an average of the business targetgroups. The average room occupation during weekdays (due to the business guests) is 1.0 per room. Business guests tend to have a single use of rooms. <br>
364 days x 100 rooms x 57% so 20,748. At an average price of € 120 and 100% occupancy, this means a maximum of € 2,489,760 revenues on renting out the weekdays, mainly aiming at the business target group. The occupancy rate was 50% so the revenues from the weekdays, as you take over are € 1,244,880.<br>
The records show information on revenues and guest nights.<br>
As shown by ([http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Tourism_statistics_-_occupancy_rates_in_hotels_and_similar_establishments experiences in the market]) even 50% is rather high on an average during a year. Keep that in mind! Of course, the price is the other factor influencing the revenues.
</div>


This information gives an indication of the maximum growth. Of course, things change if you have a higher occupancy rate AND a higher sales price.<br>
{{Template:New Skin Box}}
So making additional costs (next to the fixed ones and the variable ones you can't avoid) this just calculated maximum gives you an indication of what you could make on extra costs which still could be earned back. Or, even better, lead to more profit.  
== Guest nights ==
The latest available numbers on the hotel show a 50% occupancy rate during weekdays: Out of the possible 20,800 room (nights) 10,374 room (nights) are ''sold''; therefor the occupancy rate is 50%. This will bring the number of guest nights at this moment to 10,374 x 1,0 (guests per room)= 10,374 guest nights. So on average in the last recorded year 10,374 guest nights have been registered.


== Type of customers ==__NOEDITSECTION__
== Total guest nights ==
There is no specific information on the type of customers: we do know the business people mainly book on the weekends. The hotel has always in the first place been aiming at the business target groups and in the second place on the leisure guests. The type of customers attracted so far is an average of the business target groups. The average room occupation during the weekdays (due to the business guests) is 1.0 per room. Business guests tend to have a single use of rooms.
* Weekends = 13,304 guest nights: 56% of all guest nights
* Weekdays = 10,374 guest nights: 44% of all guest nights
* Total = 23,678 guest nights: 100%
The ratio of guest nights between weekends and weekdays remains the same during all years.


<br><hr>
== Total revenues from guests ==
''→ GO! [[#top|Top of this page]]''
* Weekends = € 704,340 in revenue: 36% of total room revenue
<center><small>''Emerald Forest Hotel'' offering an <font color="green">'''emerald''' </font color="green">hotel experience!
* Weekdays = € 1,244,880 in revenue: 64% of total room revenue
| Run your own hotel in this management simulation.</small></center>
* Total € 1,949,220 in revenue: 100% of total room revenue
The highest revenues are generated by the business guests, by far.<br><br>
 
Your pricing strategy is a direct reflection of how you position yourself across different market segments, keep that in mind. When setting prices, carefully evaluate the potential impact on bookings, occupancy rates, overall revenue, and ultimately, profitability.
<br><br><br>
 
''→ Go! Following the Introduction to the Hotel? Step 9/10 is the [[Operating review| Operating review page, click here]]''
<hr></hr></div><br>
 
{{Footer}}

Latest revision as of 17:30, 9 May 2025

→ Go! Introduction to Hotel


Size of the market

There is overcapacity in the hotel market, which makes it hard to reach occupancy rates above 60% during weekdays. It is not clear whether this is due to demand or supply side, but for any individual hotel there is enough market demand to get the hotel profitably occupied during both weekdays and weekends.
We distinguish two different targetgroups, customers and markets

We now look at the second one.


Sales prices

Weekdays account for 4 of the seven weekdays and this means (rounded up) 57% of the total of all available hotel nights (see occupancy rate). The guest are business guests.
Hotel revenue comprises the average (sales) prices times the number of bookings. A maximum occupancy rate would mean that all 100 rooms are occupied during all weekdays, so 52 weeks x 100 rooms x 4 days (Monday, Tuesday, Wednesday and Thursday). So 20,800 rooms booked for one night. Check the leisure targetgroup page for more information, which will mainly be weekend guests.

Weekdays prices in the past ranged from € 100 to € 140 maximum per room per night, including breakfast.

  • the € 100 price has been the last-minute price during weekdays.
  • the € 140 price has been the rack rate during weekdays. The rack rate being the (highest) published price without discounts, special deals or commissions.

Revenues have been calculated on the occupancy rate page, you can find the numbers in the operating review.

Of course, there are many different pricing strategies you could apply throughout the year. However, to keep things simple, the family chose not to work with seasonal pricing, but only differentiated between weekdays and weekends. You should continue using this approach. You are limited to just four room rates. Any additional pricing elements or promotional discounts must be accounted for through your marketing budget or as part of 'other costs' under Decision 10.

The schedule below provides an overview of the situation as you take over. All your pricing decisions must adhere to this structure.

Pricing system at your hotel
Days of the week Rate type Price Main Target group
Weekend Last minute €80 Mainly Leisure
Weekend Rack rate €100 Mainly Leisure
Weekdays Last minute €100 Mainly Business
Weekdays Rack rate €140 Mainly Business

Type of customers

There is no specific information on any type of guests: We do know that business people mainly stay on weekdays. The hotel has always aimed at the business marketgroups and secondly at leisure guests. Therefor the weekdays prices are above the weekend prices. The type of customers attracted so far is an average of the business targetgroups. The average room occupation during weekdays (due to the business guests) is 1.0 per room. Business guests tend to have a single use of rooms.
The records show information on revenues and guest nights.


Guest nights

The latest available numbers on the hotel show a 50% occupancy rate during weekdays: Out of the possible 20,800 room (nights) 10,374 room (nights) are sold; therefor the occupancy rate is 50%. This will bring the number of guest nights at this moment to 10,374 x 1,0 (guests per room)= 10,374 guest nights. So on average in the last recorded year 10,374 guest nights have been registered.

Total guest nights

  • Weekends = 13,304 guest nights: 56% of all guest nights
  • Weekdays = 10,374 guest nights: 44% of all guest nights
  • Total = 23,678 guest nights: 100%

The ratio of guest nights between weekends and weekdays remains the same during all years.

Total revenues from guests

  • Weekends = € 704,340 in revenue: 36% of total room revenue
  • Weekdays = € 1,244,880 in revenue: 64% of total room revenue
  • Total € 1,949,220 in revenue: 100% of total room revenue

The highest revenues are generated by the business guests, by far.

Your pricing strategy is a direct reflection of how you position yourself across different market segments, keep that in mind. When setting prices, carefully evaluate the potential impact on bookings, occupancy rates, overall revenue, and ultimately, profitability.


→ Go! Following the Introduction to the Hotel? Step 9/10 is the Operating review page, click here


→ GO! Top of this page
. . . Emerald Forest Hotel offer an emerald hotel experience! Run your own hotel in this management simulation . . .


Retrieved from "https://www.emeraldforesthotel.eu/index.php?title=Business_targetgroup&oldid=36193"