Hotel Manager and Yield Management

Hotel Manager and Yield Management

The hotel management business is getting really popular worldwide. When a hotel has good and organized staff, it makes a good impression on the customers.

Hotel management jobs are professions that are worth your time and attention. The main reason for its popularity is because

  • It is a profession which encourages creativity.
  • It gives you the opportunity to meet people.
  • It provides great career opportunities. 
  • It offers enticing rewards. 
  • It is affordable. 
  • It does not take a lot of time and school.
  • It instills responsibility. 
  • It is fun.

and above all, one job that attracts most of the graduates is "Hotel Manager". For this position They will be looking for few special traits in you. To be specific - Multi tasking , interpersonal skill , Multi lingual , team work , conflict resolution and ,the most priority , Respect for your job!

Remember, The hotel industry is very competitive. Attracting prospective guests to consider your hotel and then actually securing their room bookings is enormously daunting in this day and age. The Internet has changed everything. Your online reputation is now critical to your hotel's success. Internet has strengthened your worst nightmare, which are disrespectful guests and desperate competitors that wish to tarnish your reputation.

When you become a manager in a hotel, there are lot things which become dependent on you and you have to handle your responsibilities very cautiously. Of course you will make some mistakes in the beginning of your career but it would be really appreciable that you learn from those mistakes and be extra careful. You should have a strong leadership skill to manage work-force diversity as managing hundreds of employee from different backgrounds is going to be tough. Extra attention should be given on employee of organization.

Employee needs are much more basic, and while your first idea may be to give your employees raises and benefits to make them happy, employees also expect respect, honesty, recognition, job enrichment, and feedback to feel fulfilled. Employee morale is emotion based so, get out of your office. Employees need to feel connected to their managers, and it is difficult to create this connection and trust with someone who is always behind closed doors. I meant to say is that, you should be visible to your employees!

Generally, the main responsibility of a hotel manager is to monitor the daily operations of a particular hotel together by co-ordinating with all the departments of hotel by ensuring the friction between departments are minimum.

The main idea behind a hotel is to generate revenue to meet profit, survival and growth of our business while providing space and comfort for its clients. But, unfortunately, even though a hotel might have the potential to succeed, some wrong managerial decisions could and most likely will cost it a great deal. There are cases when a bad decisions by manager has cost hotel chain a million.

Thus, here are some advice that are meant to guide hotel managers and help them better understand the importance of becoming pro-active while selling their rooms. The truth is most managers only focus their attention on posting low rates and hoping for guests to barge in.

First of all, hotel managers should try and sell their rooms at different rates, and hence produce good occupancy. The sad fact is most hotel managers tend to decrease the rates and level them only to discover that this actually draws less guests and lower incomes. The income is not going to meet your overheads.

Managers should put themselves in the customer's shoes and determine the best approach for different types of audiences. One family may need certain services and prices to consider staying compared with a higher end couple looking to spend a lot of money while they are enjoying themselves on vacation. It really depends on a case by case situation.

A successful hotel manager should be smart enough to carefully analyze the market conditions, determine a trend and only then make the right decisions. There is no point in lowering the price of rooms if the general tendency of tourists is to actually pay more for a room in a certain period. Similarly, Hotel managers have to make sure that the rooms are ready for new guests, there is sufficient staffing to run the hotel, and that any of the restaurants, bars or even gyms are working properly. On top of all this, they will have to make sure that the accounts are in working order, ensure there is an audit.

Therefore, smart hotel managers need to manage their rates bearing in mind the fact that these rates have to be the direct result of guests' demands. Lower demands translate into lower rates, and vice verse.

Also, Hotel managers really need to keep a close eye on their competition at all times. Reading some reports that indicate the exact way in which your rates have developed compared to the rates of your competitors is a smart move. 

A hotel manager should have a good knowledge about yield management. Yield, or revenue management, is the process by which sales of a limited quantity of goods, such as hotel rooms, airline seats, apartment leasing, rental cars, etc. are managed in order to maximize profits.

Successful yield management focuses on selling the product in such a manner that is timely, price competitive, and directed towards the right subset of customers. It is an economic concept first posited by Matt H. Keller, and first used by the airline industries beginning in the 1970s, yield management has evolved in more recent years as an important tool especially for the airline and hotel industries for staying economically competitive in otherwise saturated business playing fields focusing on selling right products at right time in right place.

The basic concept of yield management is based in the economic principle of supply and demand: when supplies are short, prices go up; when supply is high, prices go down. Yield management is a studied, systematic method by which managers can logically place customers within the supply demand spectrum, and thus gain the highest yield for their products. For example, a customer who has very little flexibility in his or her travel plans is the customer who is most likely to pay a higher price for airline tickets and hotel rooms. The customer with a great deal of flexibility is not as inclined to pay a higher price.

Many hotels rate their success by their occupancy levels, but this isn't necessarily the best measure of success. Another way to rate a hotel's performance is by determining its REVPAR, or Revenue Per Available Room. REVPAR is calculated by dividing the total room revenue by the total number of rooms.

The yield manager's job is to maximize the revenue per available room by selling rooms to the right customers, at the right price, at the right time.

Successful yield management arises from several factors like an understanding of what the hotel hopes to achieve (whether that is room occupancy, REVPAR, or some other measurement), A clear understanding of what kind of hotel the manager is working with, which will lead to an understanding of what a customer visiting the hotel wants in his or her hotel experience, and why customers choose their hotel over another hotel, an ability to measure group sales against the overall goals of the hotel (for example, a hotel whose main goal is occupancy will be happy to host a large group at a lowered rate, but a hotel whose main goal is revenue may turn down a larger group in favor of a smaller group who can pay a higher rate) and a knowledge of what will cause the market to fluctuate (such as holidays, regular regional and local events, etc.) The yield manager will ideally consider all these factors when creating different rates for hotel guests.

A basic yield management price arrangement might look something like this:

Regular Rate: Rs. 1000

Corporate or Business Rate: Rs. 1300

Special Discount rate: Rs. 800

Other arrangements will take into account seasonal price changes. For instance, A mountain resort whose main business is serving winter vacationers, such as skiers and snowboarders, will have a lower supply and higher demand of rooms during winter months, whereas a hotel on the beach can charge more for rooms during the summer months than during the winter months. Hotels can create three seasonal rates: the highest rate for the months during which they expect to serve the most guests, a mid-season rate, and the lowest rate for months during which they have the lowest demand.

Seasonal arrangements do not necessarily need to be tied to the local geography not all hotels are in the mountains or on the beach. City hotel managers must take it upon themselves to learn about the corporations in their area and make personal connections with these corporate executives, learning their business cycles. Different businesses have annual events or conferences that they will be host on a regular basis so it's up to the hotel sales managers to learn these business cycles and cater to these corporate clients.

In conclusion, to stay competitive in today's market, any hotel that wishes to be successful must learn how to apply yield management techniques to their particular situation. Having determined how to gain the highest yield per room, any staff member who interacts with customer must be trained in how to clearly explain room rates to guests. The ability of staff to explain room rates to guests will determine whether customers are happy or unhappy.

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