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[[Category:Hotel info]]  
[[Category:Info pages]] {{Template:New Skin Box}}
''→ Go! [[:Category:Hotel info]]''  
''→ Go! [[Introduction to Hotel]]''</div><br>
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== Size of the market ==
== Size of the market ==
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 the demand side or the supply side. Though, for any individual hotel there is enough demand in the market to get the hotel profitably occupied during both weekdays and weekends.<br>
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>
We distinguish two different target groups, customers and markets
We distinguish two different targetgroups, customers and markets
* [[leisure targetgroup|leisure market and mainly leisure guests]]
* [[leisure targetgroup|leisure market and mainly leisure guests]]
* [[business targetgroup|business market and mainly business or corporate guests]]
* [[business targetgroup|business market and mainly business or corporate guests]]
We now look at the second one.
We now look at the second one.
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== 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.
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 [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>
Revenues have been calculated on the [[occupancy rate]] page, you can find the numbers in the [[operating review]].


== Sales prices ==
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 revenue of the hotel comprises the average (sales) prices times the number of bookings.
 
A maximum occupancy rate would mean that all 100 rooms are occupied during all of the weekdays, so 52 weeks x 100 rooms x 4 days (Monday, Tuesday, Wednesday and Thursday). So 20,800 ''rooms'' booked during one night. Also, check the page for information on the [[leisure targetgroup|leisure target group]] which will mainly be the guests on the weekends. 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 schedule below provides an overview of the situation as you take over. All your pricing decisions must adhere to this structure.


Prices during weekdays (especially interesting for business guests) in the past were ranging from € 100 to € 140 maximum per room per night, including breakfast.
<center>
* the € 100 price has been the last-minute price during the weekdays.
{| class="wikitable"
* 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>
!colspan="6"|Pricing system at your hotel
On the page [[occupancy rate]], the revenues have been calculated. You can find the numbers in the [[operating review]].
|-
| '''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>


== Type of customers ==
== Type of customers ==
There is no specific information on any type of guests: we do know the business people mainly book on the weekdays. 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. <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>
The records do show information on revenues and guest nights.
The records show information on revenues and guest nights.<br>
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== Guest nights ==
== Guest nights ==
The latest available numbers of the hotel show a 50% occupancy rate during weekdays: so out of the possible 20,800 room (nights) 10,374 room (nights) are ''sold''. So an occupancy rate of the rooms of 50%. This will bring the number of guest nights at this moment at 10,374 x 1,0 (persons per room)= 10,374 guest nights. So on average in the last recorded year 10,374 guest nights have been registered.
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 ==
== Total guest nights ==
* Weekends days 13,304 guest nights: 56% of all guest nights.
* Weekends = 13,304 guest nights: 56% of all guest nights
* Weekdays 10,374 guest nights: 44% of all guest nights.
* Weekdays = 10,374 guest nights: 44% of all guest nights
* Total 23,678 guest nights: 100%.
* 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 ==
== Total revenues from guests ==
* Weekends days € 704,340 revenues: 36% of total revenues from rooms.
* Weekends = € 704,340 in revenue: 36% of total room revenue
* Weekdays € 1,244,880 revenues: 64% of total revenues from rooms.
* Weekdays = € 1,244,880 in revenue: 64% of total room revenue
* Total € 1,949,220 revenues: 100% of total revenues from rooms.
* Total € 1,949,220 in revenue: 100% of total room revenue
The highest revenues are generated by the business guests.
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>


<br>
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''→ Go! Following the Introduction to the Hotel? Step 9/10 is the page [[Operating review]]''
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''→ GO! [[#top|Top of this page]]''
<center><small>''Emerald Forest Hotel'' offering an <font color="green">'''emerald''' </font color="green">hotel experience!
| Run your own hotel in this management simulation.</small></center>

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 . . .


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