Pearson New International Edition International pcl tp indd 1

REVENUE MANAGEMENT
288

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Now let’s return to the four rev4enue management principles and match them
with the characteristics of this potential business.
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A lower rate does not, by itself, mean that a piece of business should be refused.
Remember that it is RevPar (not ADR or occupancy) that should be maximized.
•
The Saturday night home games have traditionally created sellouts for the
Altoona Hotel, but the occupancy data from the Friday night before and the
Sunday night after these games are equally important considerations.
•
The impact of the group’s food purchases to the food and beverage department
is a consideration.
•
If, by securing the visiting team’s business this first time, the Altoona could
maintain it during periods that were not as busy (the 12 games that are not on
Saturday night), the total value of the sale could be measured in terms of 15
stays (not just one stay), because the team will need a hotel for all of its games.
A hotel that allocates too many group rooms, however, may displace regu-
lar transient guests, who must find alternative accommodations, at other hotels,
and may not return. Few revenue managers would allocate 100 percent of a
hotel’s total room count to group rooms even when temporary demand for the
property’s group rooms is strong enough to do so.
The decision about when to accept or reject a specific piece of business is similar
to that of considering when to allocate rooms to specific market codes. Each decision
must be based on the unique characteristics of the sale, the dates involved, or both.
Then the revenue manager must carefully consider the total revenue and long-term
marketing impact before suggesting specific allocation levels.
Track Codes
Track codes, like market-codes, are used to segment travelers. Whereas market-code
segments generally relate to group and transient guests, track codes make distinctions
about guests within market-codes. It is possible to create any number of track codes
that the hotel’s management team will find useful. Figure 7 illustrates how a hotel
could use track codes to further subdivide its market-codes. In this illustration, the
Altoona Hotel’s managers have created seven track codes. Each code is assigned a
PMS code to be used when making guest reservations and, ultimately, for generation
of summary reports.
Generally, the more information a hotel has about its current and prospective
guests, the better it can serve them. Revenue managers should develop and monitor
track codes that make sense for their specific hotels. These codes should be entered