Hotel Front Office Management, 3rd Edition

COMPONENTS OF THE REGISTRATION PROCESS 197Figure 7-4. A room rate survey compares room rates of competing hotels.ROOM RATE SURVEY—WEEK OF 0215RACK CORP. GROUPNumber of Persons in Room 1 2 1 2 1 2 3 4HotelSMITH LODGE $70 $80 $68 $68 $65 $65 $65 $65WINSTON ARMS $72 $80 $68 $70 $60 $65 $70 $75HARBOR HOUSE $75 $85 $70 $75 $60 $60 $65 $65THOMAS INN $80 $90 $75 $80 $75 $75 $80 $80ALLISON INN $100 $110 $89 $95 $80 $80 $85 $90GREY TOWERS $85 $95 $80 $80 $75 $75 $75 $80JACKSON HOTEL $78 $85 $73 $78 $63 $65 $68 $70TIMES HOTEL $90 $100 $80 $89 $75 $75 $80 $85income of $150,000 from other sources (food and beverage, rentals, telephone) withprojected room sales of 47,680 room nights would set its room rate at $113.(operating expenses desired ROI) other incomeprojected room nights($4,017,236 $1,500,000) $150,00047,680 room rate $113Once again, these methods are guidelines only. Room rates must be constantly monitoredwith regard to market conditions of supply and demand. The front office managerwill have to actively survey the room rates of competing hotels to determine the competitivenessof the hotel’s rates. Figure 7-4 is an example of a weekly room rate survey.This subsection on room rates is presented to show you, firsthand, the complexities ofestablishing a room rate. The market factors, construction costs, operating expenses,desired return on investment, efficiencies of operations, and marketing programs combineto produce a very complex concept. Front office managers must constantly monitor theeffects of established room rates on the profit-and-loss statement. Other department managersin the hotel must also be aware of their importance to the overall financial successof the hotel.TYPES OF ROOM RATESHotels have developed various room rate categories to attract different markets. Theserates will depend on seasons, number of potential sales in a market, and other factors.TLFeBOOK