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Revenue Allocations for Menus and Packages

In the context of Siebel Hospitality's menus and packages functionality, allocation means how much revenue is assigned to each item in a menu or package. Because different items may belong to different revenue streams, you can designate what portion of the total revenue Siebel Hospitality allocates to each item in a package.

The revenue allocation for a product goes to a revenue category. A menu has a designated revenue category; its individual menu items also have revenue categories that might be different from the parent menu's revenue category. In this case, the parent menu's revenue category overrides the revenue categories of its child items, and all revenue for a menu goes to its revenue category. A package does not have a revenue category, but its individual package items do. In the case of a package, the revenue is allocated to the revenue categories of the child items. You can calculate the revenue allocation manually, or Siebel Hospitality can calculate the revenue allocation automatically.

The revenue allocation for a menu is determined by the parent menu record's current list price and its revenue category. The revenue allocation for a package is determined by whether system allocation is selected in the parent package record, and by the revenue categories and quantities of the individual child package items. In each child package item, Siebel Hospitality first looks at the per person allocation. If the per person allocation does not have a value, Siebel Hospitality then looks for the list price.

Examples of revenue allocations are as follows:

• Event order item or menu item example. Consider the case of a single menu item or event order item, such as a television set. This simple product belongs to the Audio-Visual revenue category. Its price is $20.00. All of that $20.00 is attributed to the Audio-Visual revenue category.
• Menu example. Consider a menu with two F&B items, steak and ice cream. Steak is associated with the Dinner Entrees revenue category, while ice cream is associated with the Dinner Dessert revenue category. The menu itself, however, is associated with the Dinner Entree revenue category. Consequently, the entire price of the menu, including the ice cream, will go to the Dinner Entree revenue category.
• Package example. Finally, consider a package, in which you can specify how much revenue to allocate to each of the package items' revenue categories. The package has three items with individual prices of $10.00 each, for a total of $30.00. If the items are sold separately, the full prices are allocated to the products' respective revenue categories.

  The package, however, is priced at $20.00. If you calculate the allocations manually, you might designate the allocations as Product A = $10.00, Product B = $5.00, and Product C = $5.00. If you create system-generated allocations, Siebel Hospitality performs a calculation that is weighted based on the list prices and quantities of the component products. In the case of a package that has three items with individual prices of $10.00 each, where the package price is $20.00, an automatic allocation gives each product's revenue category $6.66.

  NOTE:  When calculating allocations, consider the quantities of the items involved. For example, if an a package line item's list price is $50.00 and the quantity is 2, then that item contributes $100 to the price of the package.

The scenarios that follow illustrate several system-calculated revenue allocations.

Scenario 1: Two-Item Package

This scenario, shown in Table 12, describes a basic package containing two items.

Siebel Hospitality determines the revenue contribution percentage of each item based on its list price. The list price of an item divided by the total of the item list prices equals the contribution percentage of that item. Multiply this contribution percentage by the unit net price of the package to determine how much that item contributes to the price of the package.

Scenario 2: Two-Item Package With Discounted Price

This scenario, shown in Table 13, describes a basic package containing two items. This scenario is similar to Scenario 1: Two-Item Package, except that the customer has negotiated a lower price.

Siebel Hospitality determines the revenue contribution percentage of each item based on its list price. The list price of an item divided by the total of the item list prices equals the contribution percentage of that item. Multiply this contribution percentage by the unit net price of the package to determine how much that item contributes to the price of the package.

Scenario 3: Three-Item Package With Menu Per Person

This scenario, shown in Table 14, describes a basic package that includes a menu per person as a line item.

The contribution percentage for the menu per person is based on the list price of the menu per person. (However, if the menu per person is a split menu, Siebel Hospitality ignores it and does not include it in any calculations.)

Scenario 4: Package Within a Package

This scenario, shown in Table 15, describes a package within a package.

To calculate the contribution percentages of the items in the child package, the system first must calculate the contribution percentage of the child package and then calculate the contribution percentages of its child line items to the contribution percentage of the child package. A breakdown of the calculation steps is as follows:

1. The price of Package Per Person 1 is 50.
2. This 50 is made up of Event Order Item and Package Per Person 2.
3. The per person allocation for Event Order Item out of the 50 is 22.22.
4. This leaves 27.78 of the 50 for Package Per Person 2.
5. Siebel Hospitality now determines how to allocate the 27.78 to the items in Package Per Person 2.
6. Siebel Hospitality determines the contribution percentage of Menu Item 1 and Menu Per Person within Package Per Person 2.
7. Menu Item 1's contribution percentage equals ((20/(20+18)).
8. Menu Per Person's contribution percentage equals (18/(20+18)).
9. The contribution percentages of Menu Item 1 and Menu Per Person, multiplied by 27.78, determine how much of the 27.78 to allocate to each of the respective line items.

NOTE:  If you have another level of a package within a package, the same iterative process should be followed to determine the per person allocations.