Revenue Management

Accountant's Profit Formula

Revenue-Expense=Profit

Profit=Sales-Costs

Profit= The Reward for Risk

ROI= Return on Investment

ROI= Investment Return/Original Investment

ADR=Total room revenue/total rooms sold^

Occupancy %= Total rooms sold/total rooms available for sale

RevPAR=ADRxOccupancy%

RevPOR=Total Revue/Total Occupied Rooms

Strategic Pricing

Value=Perceived Benefit-Price

4 Ps= Product, promotion, place, and price

Supply, Demand, Equilibrium price, break-even point

Fixed, variable and mixed costs

Value

Oragnizational profit(tangible benefit)=Selling price-Costs

Personal Profit=Perceived value(intangible benefit)-Selling Price

Quality, Service, Price

Intangibilitiy, Inconsistency, Inseparability, and Inventory