HTM 3060 Lecture Notes - Lecture 3: Revpar, Upselling

• School: University of Guelph
• Department: Hospitality and Tourism Management
• Course: HTM 3060
• Professor: Woomi Jo

Document Summary

Supply and demand: demand generally reflects the economy. Competition: set the rate enough to make money, not more than your competitors, or kill" the market. Elasticity: change in demand resulting from a change in price, demand increases with a drop of price, demand decreases when price is raised, rate cutting lower rates do not generate new business in inelastic market. The hubbart room rate formula: operating expenses, taxes and insurance. 294,750: depreciation, reasonable roa 414,000, total, less income form other sources (-139,200, amount needed from room sales, revenue from room sales needed. 1,945,350: number of rooms available (per day, rooms available per year (x365, less allowance for vacancies (@ 30%, number of rooms to be sold (@70%, adr per room to get roa (item 8/item12) The ideal average room rate: assumes 70% occupancy, revenue is calculated based on this assumption.