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Revenue Management Terms & Definitions EMEA Revenue Management

Term

Description

Definition

Calculation

ADR

Average Daily Rate

A figure representing the room rate received by the hotel when all rates are averaged.

(Room Revenue / Rooms Sold) or (RevPAR / Occ %)

ARI

Average Rate Index

ART

Account Review Tool

BFR

Best Flexible Rate

BTA

Business Travel Agency

ConPAST

Contribution Per Available Space and Time

Meeting space metric that considers profitability as well as revenue in measuring the usage of available space over a specific time period

ConPOST

Contribution Per Occupied Space and Time

Meeting space metric that considers profitability as well as revenue in measuring the usage of sold space over a specific time period

Conversion Ratio

Average Rate Index measures market share in terms of average room rate (or ADR) against the market. It is calculated by dividing the hotel’s average room rate by the market’s average room rate. A sales tool that shows data on the behavior of negotiated accounts. It provides insight into the behaviour of the contracted category, the discount their rate represents compared to Best Flexible Rate, and the potential displacement each account may produce on busy nights. In ART, you will find the volume of business that an account brings to your hotel, the amount of business displaced, and the cost which the accounts’ LRA status represents Best Flex Rate (BFR) is IHG’s benchmark rate from which all dynamic/discounted rates are anchored. It is fully flexible and available on all room types, across all days as long as inventory is available to sell (Mega Agencies) Travel agency/consortia working with IHG (Amex, CWT)

The proportion of converted bookings from ‘Prospect’ status to ‘Definite’ status Booking Analysis: Number of bookings converted from one status to another Revenue Analysis: Revenue of bookings converted from one status to another

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(Hotel ADR / Market ADR) x 100

Contribution / (Available Space x Time) where Contribution = Total Revenue – Total Variable Costs Contribution / (Occupied Space x Time) where Contribution = Total Revenue – Total Variable Costs Booking Analysis: (Tentative – Definite) / Total bookings that went through first status (e.g. Tentative) Revenue Analysis: (Tentative – Definite) / Total revenue of bookings that went through first status (e.g. Tentative)


Revenue Management Terms and Definitions.doc

CorpID Numbers

N/A

9 digit number used to identify a Corporate Account in Holidex Plus and associated with a negotiated rate category

CRO

Central Reservation Office

CRO serve as ‘hubs’ for managing all room reservations and other customer services. All customer calls are answered through global reservations with offices across Asia, Europe and the United States

CRS

Central Reservation System

Holidex Plus is the name of IHG’s CRS

Denials

N/A

DH Screen

Detailed Hotel Screen

ECS EMEA

Electronic Commission Service Europe, Middle East and Africa

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Hotel rejects new business opportunity due to availability / price for requested rooms / function space / event booking / restrictions DH screens are used by CRO sales agents, travel agents, and other hotels to obtain descriptive information about IHG properties. Information included in DH screens includes the hotel’s location, local attractions, and information about the facilities of a hotel The centralized commission payment system for all IHG hotels accessed. IHG region

Fair Market Share

FMS

The percentage of occupied rooms in a hotel relative to the hotel’s share of total rooms in that competitive set; when the percentage of rooms occupied is equal to the physical presence in the market (index equals 1.0). It can also been measured in terms of revenue and average rate.

Fencing

N/A

Restriction which a booking request must meet or overcome in order to qualify for the booking. It is a part of the ‘product’ that the customer buys and does not change often.

GDS

Global Distribution System

A worldwide reservation system (e.g. Sabre, Galileo, Worldspan, Amadeus) that acts as a channel for booking hotel rooms, airline seats, car rentals and other travel products A vital part of the IHG electronic distribution network to travel agents, corporations, and consumers worldwide.

GOP

Gross Operating Profit

Income before fixed charges of hotels

GSTS

Guest Satisfaction Tracking System

Herman

N/A

HLDX or H+

Holidex Plus

GSTS measures the aspects that the hotel guests value most and then provides user with the data and tools necessary to monitor the hotel's performance and set improvement initiatives. Data is reported on a monthly basis through a secure web-based reporting system. The graphic user interface (GUI) front-end of Holidex Plus. The system is used by Central Reservation Offices. IHG’s worldwide reservations system created in 1965

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(Rooms Available / Total Rooms Available in Competitive Set) x 100

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Revenue Management Terms and Definitions.doc

HOD information is used to update the four Global Distribution Systems (Sabre, Amadeus, Worldspan, and Apollo/Galileo). The information found here is unique to each hotel property, and can be viewed as an electronic brochure. Updated HOD information is automatically sent to all third party Internet sites that are powered by a GDS. Every hotel in the system is identified by a 5 letter Holidex Plus code that is used by all channels as the unique identifier for a hotel. An identification program for Travel Agencies, the IATA numbers concept has evolved into a system to track and pay commissions to the various GDSs and affiliates, as well as Travel Agencies for bookings made on the Internet IBP is the common revenue planning process for all Hotels, and this process drives each Hotel's revenue generation strategies and actions. The IBP revenue planning process is enabled through a suite of software tools which begin with analysis of the competition and market environment. This is followed by forecasting and pace analysis, and formulating the strategies and actions that drives our key revenue performance metrics. This planning methodology is applied to the areas of Rooms, Food & Beverage and Catering & Events. A corporate discount rate offered to large companies (usually with a strong global presence) that are managed internally through an IHG representative across 5 hotels or more. IHG’s guarantee to our customers that they will not find a lower published (non-opaque) rate than that presented for a particular IHG property. It is designed to steer business to our brand properties against the competition and penalizes hotels that have violations. It does not apply to opaque sites where the guest does not see the hotel until confirmation of booking. If you find a rate lower than the lowest rate shown on the “Best Available” search of IHG website that is viewable and book able for the same hotel and same type of accommodations, and for the same dates, advise IHG within 24 hours of booking your room, and IHG will honour that rate for the nights for which the lower rate was found, plus give an additional 10% discount off that rate upon its verification by IHG.

HOD Screen

N/A

Hotel Code

N/A

IATA number

International Air Transport Association number

IBP

Integrated Business Plan

KNR

Key Negotiated Rates

LIRG

Lowest Internet Rate Guarantee

LNR

Locally Negotiated Rates

Accounts contracted directly by hotel sales.

LOS

Length of stay

The number of nights in a guest reservation.

LRA

Last Room Availability

When a corporate account has an LRA rate, the hotel is obliged to provide travellers with a room at that rate until every room or room type contracted is sold.

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Revenue Management Terms and Definitions.doc

MACRO

Market Area Central Reservation Office

Market Penetration

A fee-based reservations service in which highly-trained reservations agents sell specific market areas. When customers are transferred from a hotel, they do not know that they have been transferred to one of IHG’s CRO locations. Percentage of total demand for rooms in the competitive set achieved by the hotel. Hotels must strive to achieve market penetration of at least 100% and over 100% to be the market set leader.

Market Share

N/A

The percentage of the total available market or market segment that is being serviced by a hotel.

Materializat ion

N/A

Reservations that are realized compared to allotment

Merchant model

N/A

MPI

Market Penetration Index

A system in which IHG sells hotel rooms to TPIs (e.g. Hotels.com, Travelocity.com, Expedia.com) at a (discounted) net price, allowing the TPI to add a mark up price to the room and sell to the consumer. The consumer, when making the purchase, knows exactly what they are buying and at what price, although they do not know the net rate paid to the hotel. Market Penetration Index measures the occupancy market share against the industry average. Hotel’s occupancy against competitive set occupancy.

MTD

Month-to-Date

Items between the first of the month and today.

Occ %

Occupancy Percentage

The number of rooms occupied to the number of rooms available in the hotel.

Opaque model

N/A

Over booking

N/A

OXI

OPERA Xchange Interface

PCR

Priority Club Rewards

A system in which IHG sells hotel rooms to TPIs at a (discounted) net price, allowing the TPI to add a mark up price to the room and sell to the consumer. The consumer books a hotel or hotel package at the TPI’s set price, but does not know exactly what the package is (e.g. Priceline.com, Hotwire.com). Maximizing occupancy by accepting more reservations than the hotel’s available capacity with the view that some bookings will not materialize on the Arrival date A switch between Holidex Plus and OPERA PMS. Both OPERA and HOLIDEX® Plus maintains a separate inventory for individual and group reservations. With the two-way interface, both inventories are updated instantaneously, if the connection is fine and defaults and conversion codes have been set-up correctly. There may be times however when the inventories are out of balance. It is imperative that inventory is managed on a daily basis for at least 14 days to prevent overbooking, loss of revenue, to ensure guest satisfaction, and to support other systems such as PERFORM IHG’s “frequent guest” program that allows members to earn points that can be used for rewards.

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Rooms Occupied / Competitive Set Rooms Occupied (Rooms Sold in Hotel / Total Rooms Sold in Competitive Set) x 100

Hotel Occupancy / Competitive Set Occupancy (Rooms Occupied / Rooms Available) X 100 or (RevPAR / ADR)


Revenue Management Terms and Definitions.doc

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PERFORM

Performing Optimal Revenue Management

Pick-Up

N/A

PMS

Property Management System

Price Point

N/A

Level of pricing for a product or service

Price Resistance

N/A

A measurement that compares a hotel’s total regret ratio to bookings.

Regrets

N/A

Guest rejects room/space offer due to product price or timing

RevPAR

Revenue Per Available Room

A performance metric stating hotel revenue based upon number of total rooms within the hotel

(Room Revenue / Rooms Available) or (Occupancy % x Average Room Rate)

Meeting space metric measuring the revenue from available space over a specific time period

Revenue / (Available Space x Time)

Meeting space metric measuring the revenue from sold space over a specific time period

Revenue / (Occupied Space x Time)

RevPAST

RevPOST

RFP

RGI

RMS RN

Revenue Per Available Space and Time Revenue Per Occupied Space and Time Request for Proposal Revenue Generation Index Revenue Management System

Revenue management system designed to determine the most competitive rate for a customer while maximizing room revenue. Pace at which guests are reserving rooms ahead of their Arrival date in the hotel The PMS is a hotel tool that centralizes all handling of reservations, checking in and out of guests, assigning rooms and managing room inventory, handling accounting and billing, and managing guests’ requests and needs. Total Regrets / (Total Regrets + Total Booked)

Document with details for sales contracts or other negotiated products. If the RFP is launched to the hotel, hotels have the option to either accept the RFP as is from the client, negotiate the rate or decline the proposal. The hotel RevPAR proportional to the competitive set RevPAR See PERFORM

Room Night

Room availability measured in spans of one calendar day

RO

Room Only

Refers to reservations in which the guest has explicitly chosen a rate with no other elements. The rate which the guest pays only pays for the room (e.g. no breakfast included)

TPI

Third Party Intermediary

External parties like online travel agencies

Unconstrai ned Demand

N/A

A reflection of total demand, irrespective of capacity constraints

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(Hotel RevPAR / Comp Set RevPAR) x 100

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Revenue Management Terms and Definitions.doc

VCRO

Virtual Central Reservation Office

A program that helps hotels worldwide maximize revenue from reservation calls. VCRO allows the participating hotels to automatically link their reservations department or front desk with one of the CROs, ensuring reservation calls are always answered in a timely manner. VCRO supports the hotels with trained and qualified sales agents and provides consistent service to their customers

YTD

Year-to-Date

Items between the start of the year and today

If you have any questions or if you want to make any addition, please email us on emearevmgt@ihg.com Last update 04 May 2010

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Revenue Management Terms & Definitions EMEA Revenue Management  

Management Terms & Definitions EMEA Revenue Management

Revenue Management Terms & Definitions EMEA Revenue Management  

Management Terms & Definitions EMEA Revenue Management

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