Lecture 6 - Lecture 6 Rate Fences and Yield Lab The Revenue...

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Lecture 6 Rate Fences and Yield Lab The Revenue Management Model Who Are Our Customers? The Market Segments Compared Customer Loyalty and Decision Rules Reengineering the Hotel Organization Homework debrief
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Yield Lab: Length of Stay Exercise Arrival Rate Length of Stay Sun $70 4 nights Thur $60 2 nights Mon $100 2 nights Sun $80 5 nights Tues $90 3 nights Sat $80 1 night Tues $100 2 nights Mon $100 3 nights Tues $70 4 nights Wed $90 2 nights Sat $60 1 night Wed $60 4 nights Mon $70 5 nights Tues $90 2 nights Wed $100 1 night What “rules” (or fences or restrictions) do you need to apply to each reservation request as it comes in (random order) to ensure that you are able to achieve the optimal revenue of $2030 no matter what the reservation order?
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Can you figure out which reservations you need to accept and reject so that you can maximize revenues ($2030), no matter what order the reservation requests come in? Sun Mon Tue Wed Thu Fri Sat Transient Demand: 2 5 9 11 7 4 3 Room 1 Room 2 Room 3 Room 4 Room 5 Of all the days you sell rooms in this hotel, which day has the greatest limiting affect on your revenue maximization? Reservations involving this day will need to pass your rules test.
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Stay Controls or Booking Restrictions are... …minimum-night restrictions placed on a projected sold-out date in order to allow flow- through bookings on shoulder nights. 0 20 40 60 80 100 Monday Tuesday Wednesday Thursday 100 Room Hotel
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For a hotel to use stay controls effectively the manager must: Understand the controls Monitor the controls, the booking pace and the number of denials Understand the impact of the controls
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Putting mandatory controls on a given date is pointless unless: The day in question is projected to fill plus generate denials. There is demand for multiple night stays. There is a pattern of denials received on shoulder nights where multiple night requests could not be accommodated.
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Types of Controls: Minimum LOS Use during high demand periods.
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