Pearson New International Edition International pcl tp indd 1

REVENUE MANAGEMENT
The FOM in Action: The Challenge
Considering the events of the prior three hours, the
evening was going well. The afternoon shift had
started with 50 unsold rooms for that night.
However, in the past few hours, the telephones
were ringing incessantly, and persons with
Internet reservations for the night were arriving
every few minutes. Danielle Pelley, FOM at the
Radisson Courtyard Hotel, looked over at Sandy,
the front desk agent who was helping her on this
busy Friday night.
“How many rooms do we still have vacant,
Sandy?” Danielle asked.
Sandy made a few quick strokes on the key-
board of her PMS terminal, called up a “Vacant,
Ready, and Unoccupied” report, and looked in-
tently at her terminal. “Looks like 10 rooms remain-
ing to sell and two suites. Twelve total. And the
phone calls keep coming in,” she said as she
reached to pick up the line now ringing at her station.
It was 8:30 p.m. with 12 rooms left to sell and
plenty of demand, mostly because of the snow-
storm that had slowed nearby interstate traffic to
a near standstill. It was always hard to predict
when weather would drive demand, but Danielle
thought she and her team had done a good job
responding.
“Let’s sell the last 10 rooms at rack rate,” said
Danielle, “and no reductions on the suites. This is
not a night to accept discount reservations.”
“Okay,” replied Sandy, “that’s what we’ll do.”
Just then the telephone rang again, and
Danielle picked it up. “Thank you for calling the
Raddison Courtyard. This is Danielle, how may I
help you?”
“Dani,” said the voice on the other line. “It’s
Tim Berger at the Hempsted Plaza. I’m glad I got
you.” Danielle knew Tim. He was a good friend and
the FOM of a hotel about three miles away. “Tim,”
she said, “We’re busy; bet you are to.”
“Dani,” he replied, “I need a favor. We are 15
rooms oversold and getting zero cancellations. I
need to walk some folks. Can you help me out?
And,” he finished, “can you cut us a break and give
us our walk rate?”
“I know I can sell my remaining rooms at rack
rate,” thought Danielle, “Now what do I do?”