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 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.
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.
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. Check the page for information on the leisure targetgroup which will mainly be the guests on the weekends.

Prices during weekdays in the past were ranging from € 100 to € 140 maximum per room per night, including breakfast.

• the € 100 price has been the last-minute price during the weekdays.
• the € 140 price has been the rack rate price during the weekdays. The rack-rate being the (highest) published price with no discounts, no special deals or commissions.
  

On the page occupancy rate, the revenues have been calculated. 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 the business people mainly book on the weekdays. The hotel has always in the first place been aiming at the business targetgroups and in the second place on the leisure guests. The type of customers attracted so far is an average of the business targetgroups. 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.
The records do show information on revenues and 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.

Total guest nights

• Weekend days 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 days € 704,340 revenues: 36% of total revenues from rooms.
• Weekdays € 1,244,880 revenues: 64% of total revenues from rooms.
• Total € 1,949,220 revenues: 100% of total revenues from rooms.

The highest revenues are generated by the business guests.

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

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

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