26Managing Hospitality Revenue
Managing Hospitality Revenue
This chapter explains the revenue management evaluation process that occurs when a sales representative sends an opportunity quote to the revenue manager for evaluation. It includes the following topics:
About Managing Hospitality Revenue
The Revenue Management Evaluation process occurs after an opportunity is captured and property-specific quotes are generated. The sales representative continues to work with the customer to update the quote. During this process, the sales representative might have to modify quote information and submit the quote to a revenue manager who reviews and approves the changes. Typical conditions that can trigger the revenue management evaluation process include:
The profit variance of a quote is negative.
The sales representative wants to reduce the sleeping room rates to be less than the negotiation floor.
The sales representative wants to overbook some functions.
Scenario for Managing Hospitality Revenue
This topic gives one example of how the Hospitality revenue functionality might be used. You might use the Hospitality revenue functionality differently, depending on your business model.
A customer is interested in a particular property for an event. However, the profit variance is negative for the property quote, and the sales representative must send it to the property revenue managers for review.
The sales representative completes the revenue management evaluation form, adds comments to the quote, and submits the quote to the revenue manager. The revenue manager at the property reviews the evaluation, the quote summary, and the comments, and approves the quote with some conditions.
Process of Managing Hospitality Revenue
The following lists show the procedures that the sales representative and the revenue manager typically perform to manage a revenue evaluation for a quote. Your company space and time follow a different process according to its business requirements.
To manage revenue evaluation for a quote, perform the following tasks:
| If... | Then Perform These Tasks: |
|---|---|
You are a sales representative |
|
You are a revenue manager |
Completing the Revenue Evaluation Form
Using the Quote screen, Evaluation view, the sales representative documents the revenue information that the revenue manager considers when making the decision to approve or reject the quote for the event. The evaluation form typically provides the following information:
Incremental revenue sources that result from the group or event. The sales representative can enter more than one incremental revenue source.
Notes on potential future business that result from the event.
Commission information. More than one commission can be entered.
The date by which the evaluation must be completed so that the sales representative can respond to the customer.
The sales manager’s comments.
This task is a step in Process of Managing Hospitality Revenue.
To complete the revenue evaluation form
Navigate to the Quotes screen, then the List view.
In the Quotes list, query for and select the required quote, and then click the link in the Name field.
Click the Evaluation view tab.
In the Evaluation form, set the value in the Evaluation Status field to Not Applicable, and then complete the fields.
The following table describes some of the fields in the Evaluation form.
Field Comments Evaluation Status
The status of the evaluation. Set the value in the Evaluation Status field to Not Applicable.
Evaluation Due Date
The date by which the evaluation is to be completed.
Commission
(Optional) The commission earned for this quote. You can add a number of different commission records for different services rendered during the quote phase.
Using the single select button in the Commission records field, you can associate new and existing commission records with the evaluation. When creating new records, you can only enter either a commission amount or commission percentage.
By Pass
Select this check box to bypass the quote evaluation, and not complete an evaluation of the quote.
Value Rating
Provide a rating for the value of the quote.
Incremental Revenue Source
(Optional) Can be used to indicate if there is to be an incremental source of revenue arising from the quote. Using the single select button in the Increment Revenue Source field, you can associate new or existing revenue source records with the evaluation.
Historical Quote Name
(Optional) The name of a quote made previously. Historical quotes allow the revenue manager to reference the revenue brought in by a customer at other properties. Using the multiple select button in the Historical Quote Name field, you can associate other historical quotes with the evaluation.
Complexity Rating
A rating for how complex this quote was to create and develop.
Potential Future Business
The details (if available) on how future business with the customer could be developed.
Event Manager
The user ID of the event manager.
Sales Manager
The user ID of the sales manager.
Manager Comments
This is a multi-value field, so that iterations of the quote between the sales manager and the event manager can be tracked. Using the single select button in the Manager Comments field, you can enter manager comments.
Comments Summary
Any relevant evaluation comments about the quote if necessary.
Submitting a Quote for Revenue Evaluation
A quote is automatically submitted to the designated revenue manager for review when the sales representative resets the value in the Status field of the evaluation form. The sales manager can access the evaluation in the Evaluation screen list. After the evaluation is submitted, the evaluation form and the quote cannot be modified by the sales representative.
The status of the quote evaluation changes as the revenue management evaluation progresses through various stages. The following table describes the status conditions during the revenue evaluation process.
Table Revenue Evaluation Statuses
| Status | Description | Next Status |
|---|---|---|
Not Applicable |
The default state. This status indicates that the quote has not yet been submitted for evaluation. |
Submitted |
Submitted |
This status is set by the sales representative to submit the quote to the revenue manager. This option is only available if the revenue evaluation for the quote goes through multiple iterations. |
In Process |
In Process |
This status indicates that the revenue manager has started to review the quote. |
Approved, Rejected |
Approved |
The revenue manager sets this status to indicate that the evaluated quote is approved. |
Submitted |
Rejected |
The revenue manager sets this status to indicate the evaluated quote is not approved. |
Submitted |
This task is a step in Process of Managing Hospitality Revenue.
To submit a quote for revenue evaluation
Navigate to the Quotes screen, then the List view.
In the Quotes list, query for the quote record.
In the Quote record, click the link in the Name field.
Click the Evaluations view tab.
In the quote evaluation form, set the value in the Evaluation Status field to Submitted.
Evaluating the Event Quote
Revenue managers can access submitted quotes for evaluation from the Home Page, My Evaluations list or from the Evaluations screen, which includes all submitted quotes for evaluation. Rejected and Accepted evaluations do not automatically appear in the list.
The National Revenue Manager typically views evaluations across all organizations, while the property revenue manager typically views evaluations for a particular property. The My Cluster Evaluations screen allows revenue managers to look at all quotes that have been submitted for evaluation to a cluster revenue manager for all the properties within that cluster.
By clicking links in the evaluation list, the revenue manager can navigate to related screens and views to see relevant information about the function and the account, as described in the following table.
Table Navigation Links in the Quote Evaluation Form
| Field Link | Navigation Destination |
|---|---|
Quote Name |
Quotes screen, Functions view |
Account |
Accounts screen, More Info view |
Evaluation Status |
Evaluation screen, Evaluation Response view |
This task is a step in Process of Managing Hospitality Revenue.
To evaluate an event quote
Navigate to the Evaluations screen, then the Evaluation list view.
In the Evaluation list, query for the evaluation record.
The National Revenue Manager can filter evaluations by choosing All Evaluations Across Organizations from the visibility list.
In the Evaluation record, change the value in the Evaluation Status field to In Progress, and review the evaluation information.
Scroll down to the Quote Summary form, and review the Function Space, Sleeping Rooms, and other general information.
In the Evaluation record, click the link in the Evaluation Status field.
From the Evaluation Response view, click the Evaluation Summary view tab to review the submitted evaluation information and sales manager comments.
About Quote Evaluation Responses
As part of the quote evaluation process, the revenue manager can create and assign quote evaluation activities to other individuals. The manager can monitor the status of these activities from the Quotes screen, Activities view to see whether or not the activities have been carried out and what the completion of these activities means to the quote. At the conclusion of the evaluation, the revenue manager decides whether or not to approve the event quote. If the quote is rejected, the revenue manager can provide response details in the response record.
Responding to a Quote Evaluation includes the following tasks:
This task is a step in Process of Managing Hospitality Revenue.
Specifying and Assigning Evaluation Activities
The revenue manager can specify prioritized evaluation activities with due dates and assign the activities to sales team members associated with the property.
This task is a step in Process of Managing Hospitality Revenue.
To specify and assign evaluation activities
Navigate to the Evaluations screen, then the Evaluation List view.
In the Evaluation list, select the quote evaluation, and click the link in the Evaluation Status field.
In the Evaluation Response list, select the response record, and scroll down to the Activities list.
In the Activities list, create a new record, and complete the fields.
By default, the Due date, Planned Start, and Last Updated fields display the current date.
The Activity Type, Status, Assigned To, and Created By fields are also automatically populated.
In the Assigned To field, select the individual to whom the activity is assigned.
(Optional) In the Last Name field, select the contact person.
Creating an Evaluation Response
When the revenue manager responds to the sales representative, the Evaluation Status field is updated with either Rejected or Approved. After responding, the revenue manager creates an evaluation response record to communicate additional details about the response.
Perform the steps in the following procedure to create a quote evaluation response for the sales representative.
This task is a step in Process of Managing Hospitality Revenue.
To create an evaluation response
Navigate to the Evaluations screen, then the Evaluation List view.
In the Evaluation list, query for the evaluation record.
In the Evaluation record, click the link in the Evaluation Status field.
In the Evaluation Response list, add a record, and complete the fields.
The following table describes some of the fields.
Field Comments Suggested Alternates
Suggested alternatives to the quoted items.
Response
This field is used by the revenue manager to summarize the response.
Required Release Date
The required date by which the status of the booking must be Definite or Released.
Required Cut Off Date
The date by which quoted items must be picked up or made available to others.
Room Attrition
Fee charged to the customer if the room block pickup is less than a certain number. The fee is typically based on a scale.
Contract Approval Required
This check box indicates whether the contract for the event must be formally approved.
Date
Automatically populated with the current date.
Contract Clauses
Specific clauses or conditions that must be included in the contract.
Catering Attrition
Fee charged to the customer if the catering revenue or attendance for the functions falls below a certain value. The fee is typically based on a scale.
Approving a Quote with a Negative Profit Variance
In some instances, when the sales representative generates a quote, the quote profit variance is negative, and the quote is typically sent to the revenue manager for approval.
The sales user cannot change the status of the quote from Prospect to Hold without getting the revenue manager's approval. When approval is received, the sales user can change the quote status to Hold or higher, such as T1, T2 or Definite.
This topic is a step in Process of Managing Hospitality Revenue.
Viewing the Quote Evaluation Response
After the revenue manager creates an evaluation response, the sales representative can view the details of the manager’s response using the Quote Evaluation Response view. This is a read-only view, and the sales representative cannot change the evaluation response. The ability to view the evaluation response can be useful to the sales representative when the evaluation has been rejected, and the sales representative must take further action before the evaluation is accepted.
This topic is a step in Process of Managing Hospitality Revenue.
To view the quote evaluation response
Navigate to the Quotes screen, then the List view.
In the Quotes list, query for and select the required quote, and then click the link in the Name field.
Click the Evaluations view tab, and then click the Quote Evaluation Response link.
Review the appropriate response in the list, as well as an activity associated with the response.
For more information about the fields in the Quote Evaluation Response list, see Creating an Evaluation Response.
Updating and Reducing the Negotiation Floor Rate
In some cases, the sales representative submits a quote evaluation to the revenue manager to request an override of the established negotiation floor rate. This situation typically occurs when the customer is bringing in a great deal of function space revenue and asks for a discount on sleeping rooms.
The sales representative first attempts to update the standard negotiation rate for the sleeping rooms. If the new rate is less than the established negotiation floor rate, the sales representative is prevented from completing the rate update. The revenue manager can, however, reduce the negotiation floor for the quote.
Revenue managers space and time decide that a profit and revenue advantage exists if the customer is given a rate that is lower than the established negotiation floor for a particular booking or event. By modifying the established negotiation floor rate, the revenue manager can set a new negotiation floor that is not constrained by the established price.
For example, a customer plans to spend a lot of money on catering products for his event and wants a discount on sleeping rooms. The benchmark rate for a sleeping room at a property is $100 and the negotiation floor is set at $100. The sales representative wants to offer the customer a sleeping room rate of $90 dollars as an incentive for future business. The sales representative makes the recommendation in the comments field of the quote, and sends the quote to the revenue manager for evaluation.
After reviewing the quote, if the revenue manager agrees that the $90 rate is justified, the revenue manager changes the negotiation floor rate to $90.
Updating the Negotiation Rate (Sales Representative)
Perform the following procedure to update the negotiation rate for a room block. This procedure assumes that the room block records have already been created for the quote.
This task is a step in Process of Managing Hospitality Revenue.
To update the negotiation rate
Navigate to the Quotes screen, then the List view.
In the Quotes list, query for the quote record.
In the Quote record, click the link in the Quote # field.
From the Room Blocks form, scroll down and click the Negotiation Rates view tab.
In the Negotiation Rates list, click Calculate Rates.
A new record appears in the Negotiation Rates list.
In the new record, update the value in the Negotiation Rate field.
If the proposed negotiation rate is lower than the negotiation floor rate, an error message appears when the user attempts to save the Negotiation Rate record.
Modifying the Negotiation Floor Rate (Revenue Manager)
When the quoted negotiation rate for a room block is lower than the established negotiation floor rate at a property, the revenue manager must modify the existing negotiation floor rate so that the sales representative can successfully apply a discounted rate.
To modify the negotiation floor rate
Navigate to the Quotes screen, then the List view.
In the Quotes list, query for the quote record.
In the Quote record, click the link in the Quote # field.
From the Room Blocks form, scroll down and click the Negotiation Rates - Manager view tab.
In the Negotiation Rates - Manager list, modify values in the Avg Floor and Weekend Floor fields.
After the revenue manager has modified the negotiation floor rates, the sales representative can set the negotiation rate for the room block to a value greater than or equal to the updated Avg Floor or the Weekend Floor rates.