Essay on Financial Performance and Revenue Management

Introduction

The Luzern townhouse hotel is a three-star hotel with sixty well-furnished and stylish twin studio type rooms. The hotel operates throughout the year and it offers two kinds of tariffs; business market from Monday to Thursday and tourist market from Friday to Sunday. The aim of this paper is to review the rates of the services per room, ways of increasing the accommodation revenue and different sources of revenue.

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According to appendix 1, the hotel experiences a high number of customers during the weekday which is from Monday to Thursday. A huge number of customers books online for reservations in the hotel. The room rack rate is high on the weekend business activities. High revenue is mostly earned during the weekday business activities, this implies that customers are many during the business market days from Monday to Friday and then the tourist market follows closely from Friday to Sunday. The accommodation rates are very low; therefore the hotel management should lower the room rates to compete with other hotels.

The hotel will analyze the current market and look for different ways of increasing the accommodation revenue through development in the existing market. There are different ways in which the hotel can develop to increase the accommodation revenue. According to Kimes (2014), offering discounts, promoting packages and use of social media will help to increase the accommodation revenue.

Discounts; discount is the deduction from the actual cost of a good or service. Offering discount on services will attract more customers in the hotel. Discounts should be offered on the midweek accommodation and mid weeding accommodation. The discount rate should increase from 10% to 15% which will reduce the cost of services moreover attracting more customers to the hotel.

Creating and promoting packages; packages are the gifts or services offered for free to the customer. The hotel can increase its guest by promoting packages such as free boat rides, offer small meetings room to the guest in the hotel and also provide free drinks and snacks for breakfast.

Social media platforms; social media platforms are the modern advanced technologies that both small and big businesses use to promote their brands on the internet. These social platforms include Facebook, Instagram, YouTube, Twitter and LinkedIn. The hotel will be able to promote and advertise its services through the social media platforms since a lot of customers use these channels to find new companies and be aware of the goods and services these companies offer.

Advertising; advertising is a means of communication where a company uses different channels to communicate their products, services or ideas to the consumers. The hotel can advertise its services to the customers through the media and the internet, this is to make the customers aware of the services provided and to convince the customers that the services provided will fulfill their needs and desires.

There are other methods or sources that can increase the amount of revenue for the hotel (Vaivio, 2014). These methods include the surplus services that the hotel will offer to the clients or guest to increase revenue.

Tour guide services; tour guide is an individual who provides assistance and information to the visitors who are not familiar with the new environment. When the clients in the hotel need assistance in traveling around the area of Luzern, the hotel should be able to provide tour guides who will escort the visitor and in turn, the visitors will pay for these services which will increase the hotel's revenue.

Spa services; there are different services that are offered in a spa, these services include a beauty salon, body treatments, massages, waxing and make-up services. These services will help to attract more customers in the hotel and the revenue will rise.

Parking services; currently many people own their own cars. Sometimes it is difficult to find a parking space in some areas. When the hotels provide parking space it will be an advantage to the guest. Guest who will be parking their cars in the hotel will pay for the parking services and this will increase the revenue of the hotel.

Conclusion

Luzern hotel is a three-star hotel that operates throughout the year. The current accommodation rates are low and therefore the hotel management should reduce the room rates to attract more customers. Accommodation revenue will increase by offering discounts to the guests, promoting packages, using social media and advertising its services to the customers. There are different ways increasing the revenue by offering other services such as parking, spa services, and tour guide services. Through these services, the hotel will be able to have more customers and the total revenue will increase.

References

Kimes, S.E., 2014. The basics of yield management. Cornell Hotel and Restaurant Administration Quarterly, 30(3), pp.14-19.

Vaivio, J., 2014. Exploring anon-financial'management accounting change. Management Accounting Research, 10(4), pp.409-437.