HADM 1350 Study Guide - Final Guide: Yield Management

• School: Cornell University
• Department: Hotel Administration
• Course: HADM 1350
• Professor: Reneta Mc Carthy

Document Summary

The most important long-term planning function performed by managers. The annual operations budget is a profit plan that addresses: all revenue sources, expense items. Start with forecasted occupied rooms and adr. Estimate related direct and variable expenses in terms: cpor, percentage of revenue. Accounting"s role in the budget process: coordinates process, provides inflation and property stats, compile property wide budget for top management or review. Hotel should focus on 2 things: occupancy, adr, hotels already use it through seasonally adjusted rates. Yield management works well for medium to large properties, not for properties with 50 rooms or less or single market property. Yield management requires: good historical information, good understanding on how transient and group guests behave. Yield = revenue realized/revenue potential (#rooms*rack rate) Yield management team should comprise of a rooms director, reservation manager, and sales director and it should meet once a week.