Function Space Revenue Management
Revenue Optimization Conference (ROC)
April 22, 2015
IHG©
Agenda
The
Concept
@
IHG
IHG©
Group Price
Optimization
2
Why Function Space RevMan?
“Function Space will have the highest
likelihood of success outside of traditional
rooms revenue management”
-2011 Survey by
Sherri Kimes
IHG©
The Challenges
Ownership – Sales, Catering Sales, F&B, RM
The Approach – Operational & Sales Driven vs
Analytical
Function Space - What, When and How to use it
Function Space vs Function Space + Rooms
The Ancillary Revenues (Wifi, AV, Flowers)
IHG©
IHG’s Approach to Function Space RM
Data Collection
Data Collection
Data Analyses
Data Analyses
Market
Segment
Revenue
Metrics
Pricing
Forecasting
Review
IHG©
Inventory / Space Mngt
Systems - Tools – SOPs - KPIs
Breaking the C&E Business…beyond Segments!!
Lunch
Coffee Breaks
Product Launch/AGM
Event
Type
Booking
Class
Market
Segment
Corporate/Trade Fair
Residential
IHG©
Booking
Type
Hotel Centric
Corporate / Brand
Centric
How do we Segment the Market?
IHG©
•Age
•Gender
•Income
•Occupation
•Education
•City
•State
•Country
•Region
•Lifestyle
•Personality
•Social class
Demographic
Psychographic
Geographic
Behavioural
•Occasions
•Benefits sought
•Usage patterns
•Loyalty & Frequency
of Purchase
IHG Market Segmentation
MEETING
CORPORATE
ASSOCIATION
TRADE FAIR
GOVT / MILITARY
INCENTIVES
CORPORATE
ASSOCIATION
TRADE FAIR
EXHIBITION
GOVT/MILITARY
GROUP
INCENTIVES
LEISURE GRPS
LEISURE
INTERNAL
SOCIAL
WHOLESALE
TOUR SERIES
IHG©
Revenue Metrics for C&E
IHG©
Day Part concept
Meeting Rooms 4 x 4 day parts = 16 day parts
Ballroom
1 x 4 day parts =
Total
5 x 4 day parts
IHG©
4 day parts
= 20 day parts
Rooms Metrics vs C&E Metrics
Occp%
Occp
RevPAST
IHG©
ADR
KPIs
RevPAR
RevPOST
C&E: Occupancy
OCC
=
Total Occupied Space in Square Meters by Day Parts
Total Available Space in Square Meters by Day Parts
IHG©
C&E: RevPOST
RevPOST
=
Day Part’s Total Revenue
Day Part’s Total Occupied Space
IHG©
C&E: RevPAST
RevPAST
=
Day Part’s Total Revenue
Day Part’s Total Available Space
IHG©
C&E: Quick Calculator
RevPAST
REVPAR
RevPAST/RevPOST
OCC%
REVPAR/ADR ==OCC
RevPAST/OCC=RevPOST
REVPAR/OCC%
= ADR
RevPOST
ADR
OCC
Occupancy
RevPOST
X OCC=RevPAST
ADR
X OCC
(% ) = REVPAR
IHG©
C&E Metrics with Profitability
ProPOST
=
Day Part’s Total Profit
Day Part’s Total Occupied Space
ProPAST
=
Day Part’s Total Profit
Day Part’s Total Available Space
IHG©
Forecasting in C&E
IHG©
Yield Management in C&E
IHG©
Getting it Right
CUSTOMER
SPACE
TIME
PRICE
IHG©
Intro to GPO
Group Price Optimization (GPO) streamlines and optimizes the Group selling
activities
Client
Focused
IHG©
Market
Savvy
Performance
Driven
Analytics
Based
20
Group Price Optimization
Demand
(Group &
Transient)
Price
Sensitivity
(Willingness
to Pay)
Minimal
Acceptable
Rate
Analytics Engine
Supply
(Capacity)
Profitability
IHG©
21
THANK YOU!!
Tarandeep Singh
Director Revenue Analytics
Asia Middle East & Africa
IHG©