Business targetgroup

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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 demand in the market to get the hotel profitably occupied during both weekdays and weekends.
We distinguish two different targetgroups, customers and markets

• leisure market and mainly leisure guests
• business market and mainly business or corporate guests

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.

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. 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%.

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.

When your assignment is managing one of the new establishments, this will be the benchmarks you start with, and refer to.

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

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