GDU Ninja Update 19 - HOW GOOD ARE YOU AT YOUR JOB?
(Sent to GDU Ninjas 1100am Monday September 4th)
Below are 7 questions and we are looking for you to send the answers to info@accubook.net.
Its really just a 15 minute exercise with a calculator, but we do have a hidden agenda that we will reveal when we announce the winners.
Rules of the competition;
There are none, its just a bit of fun
Are we open to blackmail? Yes, fruit scones normally do the trick.
All based on a fictional hotel ‘Lime Trees Hotel’.
The first correct answer we receive will win a Ryanair Gift Voucher
The second correct answer we receive will win a box of wine.
1. Most OTA's (Online Travel Agents) Charge 15% commission on bookings. That means for every 1€ a hotel pays in commission they get back approximately 6.66€.
Lime Trees Hotel has an Adword Campaign running in August. They invested 221€ and had converted bookings of 1989€
For every 1€ they invest in Google Adwords how many are they getting back?
Data for the following questions;
2. What is the Gross Room Revenue in August?
3. What is the Total Gross Revenue including Byspend (ie Food etc) in August assuming a Byspend of 30€ Per Room Sold?
4. What would the Gross Room Revenue be in August if the ADR was dropped from 82€ to 73€ and this resulted in the occupancy going up to 100% in the month of August?
5. What is the total Gross Revenue including Byspend if the ADR was dropped from 82€ to 73€ and this resulted in the occupancy going up to 100% in the month of August?
6. Mary looks after rates in the Lime Trees Hotel, and sat at Heathrow Airport at 0600 Monday morning looking at the dismal rooms rates for that night on the GuestDiary App on her phone. Out of 20 rooms only 4 were sold at 129€. In despair she dropped the rate to 99€ per night. When she finally arrived at her house at 2PM she saw that she was sold out due to an Air Traffic Control software glitch (and the Lime Trees is next to an airport picking up a lot of bookings).
However her mood lifted when she saw that someone in the hotel had seen what was happening and had gone into GuestDiary and increased the rate to 169€, but further checking showed that this was a little late and only the last 3 rooms came in at this rate, all previous ones had come it at 99€
How much extra room revenue would the hotel have theoretically made if she had set the rate to 169€ at 0600 in the morning (assuming the hotel still sold out)?
7. The Lime Trees is generating 600,000€ Per Year in Room Sales. The hotel management decides to throw 10,000€ per year at Google Adwords and FaceBook. Assuming the marketing pushes more bookings direct through the website (As Per Below), how much is the property saving once you take in to account the marketing investment.
Note - Assume OTA bookings attract a commission of 15% and direct website bookings 2.9%
Send your answers to info@accubook.net as quickly as possible.
SEP 7th - SPOLIER ALERT below are the correct answers to the recent Revenue Management Competition.
We are pleased to announce that the winners are;
1. Maddy from https://www.8beresfordstreet.com/ (Ryanair voucher on the way)
2. Paul from https://ghanhouse.com/ (Box of wine on the way)
Congratulations and start looking for a pay rise!!
We did say there was a hidden agenda, which might be too strong, BUT....
1. In the first example we see an investment in Google Adwords with a higher Return on Investment than the OTA's (Online Travel Agents), and yet as far as we know less than 2% of our customers are using Google Adwords.
2. In questions 2,3,4, and 5 we see that 'rate flexing' in this case dropping the room rate can actually increase the revenue of the property IF the occupancy goes up. Especially if you have a property that offers 'Byspend' ie a Restaurant or Bar etc.
In example 6 we see how much difference attention to room rates can make in a just a single day!. In short Rate Flexing is the largest single driver of profit in the Accommodation Sector, and in our view it isnt done enough.
3. In question 7 a property decides to spend money on marketing and actually succeeds in saving money because the bookigns come direct and OTA commissions are lower. You might argue with this principle but what wasnt added into the maths (to keep it simple) is that money invested in sales marketing should AlSO increase your sales.
And yet we have many Million Dollar customers who DONT invest in Sales and Marketing!
Feel like debating with us? Join us here www.facebook.com/accubook
Answers
1. 9
2. 45756
3. 62496
4. 45260
5. 63860
6. 910
7. 4520