Scribd
Upload
55 views43 pages

Student Handout Tenative

.

Uploaded by

Xox, M
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
55 views43 pages

Student Handout Tenative

.

Uploaded by

Xox, M
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 43

FOM 5th Sem Chapter 1

PLANNING & EVALUATING FRONT OFFICE OPERATIONS


• A. Setting Room Rates (Details/Calculations thereof)
• - Hubbart Formula, market condition approach & Thumb Rule
• - Types of discounted rates – corporate, rack etc.

• B. Forecasting techniques
• C. Forecasting Room availability
• D. Useful forecasting data
•  % of walkin
•  % of overstay
•  % of under stay
• E. Forecast formula
• F. Types of forecast
• G. Sample forecast forms
• H. Factors for evaluating front office operations
• Q.9. (a) Write forecast formula. (b) Write any
two formulas for the following: (i) % of no
show (ii) % of overstay (iii) Occupancy % (iv)
Double occupancy % (5+(2x2 ½) =10)
Occupancy percentage
No of Rooms Sold
= X 100
No of Rooms available
Walkins Percentage

No of Walkins
= X 100
Total no of Arrivals
No show Percentage

No of Noshows
= X 100
No of Reservations
Understay percentage

No of Understay
= X 100
Total No of Checkouts
Overstay percentage

No of Overstays
= X 100
Total no of Checkouts
ADR

Room Revenue
=
No of Rooms Sold
Revpar

Room Revenue
=
No of Rooms Available
Total Revpar

Room Revenue + Other Revenues from POS


=
No of Rooms Available
Avg Rate per Guest

Room Revenue
=
No of Guests
Avg Guest per Room Sold

No of Guests
=
No of Rooms Sold
Multiple Occupancy Ratio

No of Rooms occupied by more than one guest


=
No of Rooms Occupied
Percentage of Potential Revenue

Actual Rooms Revenue


= X 100
Potential Rooms Revenue
Forecast Formula
Rooms available for sale =
Total No. of Guest Rooms
- Number of OOO Rooms
- Number of Stayovers
- Number of Reservations
- Number of Overstays
+ Number of Reservations X Percentage of Noshows
+ Number of Understays
Occ Res LOS Booking No of Revenue
% trend Rule Taken Rooms Generated
@Rs @Rs Sold
5k 8k
Day 40 30%
1(Fri)

Day 20 10%
2(Sat)

Day 10 10%
3(Sun)

Total

Conditions:
Total No. of Rooms : 100 Walkin Percentage : 10%
Corporate Bookings : 10 No Show percentage : 10
rooms Length of Stay :LOS
Occupancy %
Occupancy %= Number of rooms occupied x 100
Number of rooms available
Multiple or Double Occupancy Ratio
DOR% = No. of Rooms occupied by more than one Guest x 100
No. of rooms sold
(Or)

House Count – No. of rooms Sold


No. of Rooms Sold
• % of No-Shows = Number of No-Shows________ X 100
Number of Room Reservations
• % of Walk-Ins = Number of Room Walk-Ins X 100
Total Number of Room Arrivals
• % of Over-Stays = Number of Over-stay Rooms X 100
Number of Expected Check-Outs
• % of Under-stays = Number of Under-stay Rooms X 100
Number of Expected Check-Outs
Average Daily Rate (ADR)
• ADR= Total Room Revenue
Number of Rooms Sold
Revenue per Available Room (RevPAR)
RevPAR= Total Room Revenue
Number of Rooms Available
Average Rate per Guest (ARG)
ARG= Total rooms revenue
Number of room guests/ House count
Average guest per room
AGR = Number of guests or house count
Number of rooms sold
Forecast Formula
Number of Rooms Available for Sale
Total No. of Guestrooms
- No. of OOO Rooms
- No. of Room Stay-overs
- No. of Room Reservations
+ No. of Room Reservations × % of No-Shows
+ No of Room Under-stays
- Number of Room Overstays
Number of Rooms Available for Sale
* The above formula does not include walk-ins as the data
can be determined through the forecast formula.
Forecasting Room Availability
Front office managers do this as short-term
planning to know the number of rooms available
for future reservation
It helps to manage the room inventory effectively
as the number of rooms are fixed
The forecasted availability and occupancy
numbers are important to the daily operations
It is the foundation for making room pricing
decisions, set room aside for OOO for
maintenance or deep cleaning as well as for HR
planning for the entire room & food division
Skill of forecasting is complex and can be
acquired through experience, effective
recordkeeping and accurate counting methods
Following types of information can be helpful
in room availability forecasting:
• A thorough knowledge of the hotel and its
surrounding area
• Market profiles of the constituencies the hotel
serves
• Occupancy data for the past several months
and for the same period of the previous year
• Reservation trends and a history of reservation
lead times (how far in advance)
• A listing of special events scheduled in the
surrounding geographic area
• Business and historical profiles of specific groups
booked for the forecast dates
• The number of non-guaranteed and guaranteed
reservation and an estimate of the number of
expected no shows
• The percentage of rooms are already reserved
and the cut-off date for group room blocks held
for the forecast dates
• The room availability of the most important
competing hotels for the forecast dates (as
discovered by blind calls)
• The impact of citywide or multi-hotel groups
and their potential influence on the forecast
dates
• Plans for remodeling or renovating the hotel
that would change the number of available
rooms
• Construction or renovating plans for
competitive hotels in the area
Forecasting Data
• The process of forecasting room availability generally
relies on historical occupancy data.
• To facilitate forecasting, the following daily occupancy
data should be collected:
• No. of expected room arrivals
• No. of expected room walk-ins
• No. of expected room stayovers (rooms occupied on previous
nights that’ll continue to be occupied for the night in question)
• No. of expected room no-shows
• No. of expected room understays
• No. of expected room check-outs
• No. of expected room overstays
Sample Forecast Forms

Occupancy forecasts are prepared on a monthly


basis and reviewed by the F&B and rooms
division management to forecast revenues,
project expenses, and develop labor schedules.
Purpose of the 10-Day Forecast Form:

Planning Staffing and Payroll Levels

Components of the 10-Day Forecast Form:


Daily Occupancy Figures
Group Commitments
Comparison with Previous Periods
Process of Developing the Forecast:

• Data Collection Sources


• Review and Estimation
• Reservation Evaluation
• Adjustments Based on Historical Data
• Inclusion of Group Information
• Role of FOM and Computer System
• Distribution to Departments
Ten-Day Occupancy Forecast
Location____________________#_______________Week Ending_____________

Date Prepared________________________Prepared by_______________________

To be submitted to all department heads at least on week before the first day listed on the forecast.
1. Date / Day M T W Th F Sa Su M T W
2. Estimated departures 10
3. Reservation arrivals – Group
4. Reservation arrivals – Individual
5. Future reservation (estimate)
6. Expected walk-ins
7. Total arrivals
8. Stay over
9. TOTAL FORECASTED ROOMS
10. Occupancy multiplier (no. of guests per
occupied room for average of the same day for
the last 3 weeks.)
11. FORECASTED NO. OF GUESTS
12. Actual rooms occupied
13. Forecasted variance
14. Explanation

Approved by_______________________ Date_________________________


(G.M)
Three–Day Forecast

• It is an updated report that reflects a more


current estimate of room availability. It details
changes from 10-day forecast. It guides
management in fine tuning labor schedules
and adjusting room availability information.
Three-Day Forecast
Date of forecast:______________________ Compiled by_________________

Total room in Hotel:___________________

Tonight Tomorrow 3rd night


Day
Date
100
Previous Night
Occupied Room 60
- Expected departures 20
- Early departures 10
+ Unexpected Stay overs 10
+ Unoccupied rooms 20
= Rooms avbl. for sale 30
+ Expected arrivals 10 20
+ Walkins&same day resev 5 15
- No-Shows 5 20
= Occupied rooms 20
= Occupancy Percentage 20
= Expected house count

Distribution: General Manager, House Keeping, All F&B Outlets, Accounting, Sales,
Banquets, Security
Evaluating Front Office Operations
The important tools required in evaluating the
success of front office operations include
Daily operations report: it contains a summary
of the hotels financial activities during a 24hr
period. It provides a means of reconciling cash,
bank account, revenue, and accounts receivable.
Copies of the DOR are generally distributed to
all department and division managers in the
hotel.
Occupancy Ratios: they measure the success of the
Front office in selling the hotel’s primary product
the guest rooms. The data necessary to calculate
the ratios,
• No. of rooms available for sale
• No. of rooms sold
• No. of guests
• No. of guests per room
• Net rooms revenue.
The ratios that can be calculated from this data
include
• Rooms Revenue Analysis: This report helps
the FOM review the use of various special
rates to determine whether the staff have
followed all appropriate policies and
procedures.
• Hotel Income Statement: provides important
financial information about the results of
hotel operations for a given period of time.
The period can be a month or longer but
cannot exceed one year. It is one of the most
important reports as it reveals the amount of
net income for a given period.
• Rooms Division Income Statement: Shows only
summary information, separate departmental income
statements provide more detail.
• Operating Ratios: assist managers in evaluating the
success of front office operations. The operating ratios
should be compared against proper standards –
budgeted % etc.
• Ratio Standards: Operating ratios are meaningful only
when compared against useful criteria such as:
• Planned ratio goals
• Corresponding historical ratios
• Industry Averages
• The ratios are best compared against planned ratio
goals.

You might also like