Displacement and Negotiated Pricing
Group events, conferences and negotiated business bookings frequently account for over 50% of hotel room reservations. This course will prepare participants to develop their own data-driven, systematic approach to group pricing.
Participants will also learn how to anticipate displacement—specifically how a property estimates the number of future arrivals that will have to be turned away when at capacity. Predicting transient business (non-group, individual business travelers) amid negotiated bookings is also a component when considering the effects of displacement on customer satisfaction.
Forecasting displacements and setting parameters for negotiating price will help determine the number of rooms to allocate to each customer segment. Another key metric is win rate—the probability that a group will accept the quoted price—and the trade-offs to be made around profit margins.
Who Should Take this Course?
This course is designed for general managers, revenue and finance managers, operations, sales, marketing and other hospitality professionals who are responsible for the financial performance of their organization. Professionals with at least 3 years of experience in their industry will see the greatest benefits. This course provides advanced instruction in revenue management and teaches the industry-critical skills and advanced techniques used by top performers the world over.
Participants who complete this course will be able to...
- Employ transient revenue management techniques and negotiated selling
- Learn how to calculate optimal market mix
- Determine the optimal mix of negotiated versus transient business
- Evaluate requests for group/negotiated business
Module 1 - Introduction to Displacement
- Room Allocation
- Calculating the Group Break-even
- Evaluate Group Request
- Allocate Multiple Rate Classes & Multiple LOS
Module 2 - Group Arrival Uncertainty
- Group Forecasting
- Negotiated Pricing
- Overbooking Levels
- Transient Cancellations and Overbooking with Groups
- Overbook with a Group
Module 3 - Optimal Group Pricing
- Price Versus Acceptance
- Logistic Versus Linear Regression
- Christopher Anderson, Professor, School of Hotel Administration