Displacement Analysis
Introduction
The hotel industry is a revenue generated business whose profit normally streams mainly from guest room nights, but other areas in the hotel which generate revenue are meeting spaces, food and beverage, gift shop, spa services, etc. These different departments in a hotel go hand in hand, in that, rooms are a vital part of any hotel, if they are being sold and profit is maximized in that department, it is likely that the other departments would be utilized as well, as opposed to if the occupancy and a hotel was very low. The hospitality industry is unpredictable when it comes to forecasting real-time customer demand and profit maximization. The front desk staff often face difficult decisions when it comes to booking in groups of people, either to accept them or reject based on whether or not one group or transient will bring in more revenue than the other because they want to always maximize their revenue as a hotel. There are tools in place to aid in making these tough decisions; a spreadsheet is created with a displacement analysis to ease in this process.
Displacement Analysis Spreadsheet
Purpose of the Spreadsheet
The displacement analysis spreadsheet helps managers see if the hotel’s revenue is being maximized. With this spreadsheet managers can compare the revenue expected by a certain group. By doing this they will decide if they want to accept or reject that certain group reservation. If the group maximizes the hotel’s revenue then they will accept the group, but if not then they will reject it. A displacement analysis spreadsheet will include the differential in room revenue, differential in food and beverage revenue, and differential in other revenues such as meeting facility and spa services. As well the spreadsheet will include the capture rates of the different guests. With all this the hotel will have a summary of the final net revenue with the differential and will then decide if they should accept or reject the group.
Decision Making
The hotel industry is a revenue generated business whose profit normally streams mainly from guest room nights, but other areas in the hotel which generate revenue are meeting spaces, food and beverage, gift shop, spa services, etc. These different departments in a hotel go hand in hand, in that, rooms are a vital part of any hotel, if they are being sold and profit is maximized in that department, it is likely that the other departments would be utilized as well, as opposed to if the occupancy and a hotel was very low. The hospitality industry is unpredictable when it comes to forecasting real-time customer demand and profit maximization. The front desk staff often face difficult decisions when it comes to booking in groups of people, either to accept them or reject based on whether or not one group or transient will bring in more revenue than the other because they want to always maximize their revenue as a hotel. There are tools in place to aid in making these tough decisions; a spreadsheet is created with a displacement analysis to ease in this process.
Displacement Analysis Spreadsheet
Purpose of the Spreadsheet
The displacement analysis spreadsheet helps managers see if the hotel’s revenue is being maximized. With this spreadsheet managers can compare the revenue expected by a certain group. By doing this they will decide if they want to accept or reject that certain group reservation. If the group maximizes the hotel’s revenue then they will accept the group, but if not then they will reject it. A displacement analysis spreadsheet will include the differential in room revenue, differential in food and beverage revenue, and differential in other revenues such as meeting facility and spa services. As well the spreadsheet will include the capture rates of the different guests. With all this the hotel will have a summary of the final net revenue with the differential and will then decide if they should accept or reject the group.
Decision Making