ROOM TARIFF IN HOTEL

ROOM TARIFF IS DAILY CHARGED FOR THE USAGE OF THE HOTEL ROOM AND SERVICE

1. ROOM TARIFF www.indianchefrecipe.com

2. Topics Factors Affecting Hotel Room Tariff Establishing The End of the Day Fixed check-in/chek-out bais-24hrs,night bais Room rate Designations MEal plans Room Tariff card,broucher and its importance Room tariff fixation-cost based ,Rule of thumb vs Hubbart formula and competiton based ,market based and demand based www.indianchefrecipe.com

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4. Room Tariff www.indianchefrecipe.com

5. Room Tariff I t is the the daily rate charged for the usage of the hotel room and services www.indianchefrecipe.com

6. Q&A 1.What is Tariff Card? 2.What is the rate for the Foregigners 3.What is the single occupancy rate 4.What is double occupancy rate 5.What Room rent ++ means what? www.indianchefrecipe.com

7. Factors Affecting Hotel Room Tariff www.indianchefrecipe.com

8. Factors Affecting Hotel Room Tariff- Cost Hotel : Raffles Fixed Cost: It doest not effect the occupancy % Eg : land and buliding Material Cost: Raw Labour Cost: Man power in constructing the Buliding The higher the investment the higher would be the room rent www.indianchefrecipe.com

9. Factors Affecting Hotel Room Tariff- level of service Provides Luxury services Like Like : Gym,spa,speciality Rest.banquets RMS,parlor,Concierge,Traveldesk,coffeeshop etc Staff required more. Hence room rent to charged higher www.indianchefrecipe.com

10. Factors Affecting Hotel Room Tariff-Competiton Competiton : competiton between similar hotels in market effect the rack rate Lower the rate - negative Higher the rate : lack of occupancy www.indianchefrecipe.com

11. Factors Affecting Hotel Room Tariff- Target Market Target Market : Attaract the guest with with low rates Suitable for Budget hotels www.indianchefrecipe.com

12. Factors Affecting Hotel Room Tariff-Location Location: Business center beaches Good view : high rates room facing view Not good view : Low rates Like Room facing parking Effect on room rates www.indianchefrecipe.com

13. Q&A 1.What are the factors effecting Room Tariff 2.How does it effect on Cost ? 3. How does it effect on Competition? 4. How does it effect on Location? 5. How does it effect on levels of services ? 6. How does it effect on Target Market? www.indianchefrecipe.com

14. Establishing End of the Day end of the day Posting of the tariff to guest rooms all faninacial transaction to be end at the end of the day it remains round the clock it is very important the end of the day and begning of a new day www.indianchefrecipe.com

15. Establishing End of the Day Establishing the End of the Day check-in/check-out 24 hrs basis Night Baisi www.indianchefrecipe.com

16. Fixed Check-in/Check-out checkin :12.00 noon Checkout : 12.00 noon Advantage of this system: 1 Room can again and again There is time for relaxation www.indianchefrecipe.com

17. 24 hrs any time check-in any time check-out No-fixed time of check-in and checkout Used in transiet hotels NO relaxation www.indianchefrecipe.com

18. Night Basis it is charged on night basis if guest stay only in morning and checkout in night then half day is charged this system is out dated nowdays www.indianchefrecipe.com

19. Q&A How is we estbalish the end of the day What is Fixed check-in and checkout? What is 24hrs basis What is Night basis? www.indianchefrecipe.com

20. Room rate /Tariff Room Rate Govt Rate Volume Guarantee Rate Tour Group Rate Half day rate Advance Purchase Rates Corporate Rate Crib Rate Introductory Rate Educational Rate Airline rate Travel Agent Group Rate Week day Seasonal Rage Rack Rate Package Compli . Rate Membership Rate www.indianchefrecipe.com

21. Q&A What is Rack Rate? What is crib rate? What is package rate? What is day rate? What is group rate? What is seasonal rate? What is CVGR ? what is week day rate? What is corporate rate? www.indianchefrecipe.com

22. Meal P lans EP : nothing given complimentary CP : Room rent + Taxes and b/f is given complimentary M.A.P : Room rent + Taxes and b/f and luch or dinner is given complimentary A.P : all are complimentary B&B or Bermuda plan : room rent + taxes and American breakfast given complimentary EX: eggs, bread and jam ,butter cornflakes etc www.indianchefrecipe.com

23. Q&A What is meal plan? What is CP? What is EP? What is MAP? What is AP? www.indianchefrecipe.com

24. Room Tariff It is published raes given to all guest DFIT ,FFIT,GIT, walkin Rates offered with out any discount www.indianchefrecipe.com

25. brochure It shows all facilities of the hotels Shows all the information about hotel www.indianchefrecipe.com

26. Importance of Broucher Embrace the technophobes: new technolgy, old grand parents can operate facebbok but tehy can read broucher felxible to all 2.Easy to take away: easy to carry,read hotel,home 3.Business card : chances of missing card and doesnt give entire information ,broucher gives all iinformation 4.Target specific markets: target guest and mnc companies 5..Cost effective: tv,radio are costly and brocuher is easy and gives more information less cost www.indianchefrecipe.com

27. Q&A What is Tariff card? What is Broucher? what is the importance of broucher www.indianchefrecipe.com

28. Room Tariff fixation Fixing room is difficult task for mgt: If low room rent - cannot support ecomically mgy If high rate - guest will not come hence to fix a room rent mgt follows 1.Cost-based pricing 2.Market based pricing www.indianchefrecipe.com

29. Room tariff Fixation www.indianchefrecipe.com

30. Costing Fixing room rate : ??? Cosidering : Basic cost at operations+ROI(fixed assest and variable cost)+ 5 to 10 % profit margin= selling price 15,00,000 cost operation+5,00,000 F.A+10% Profit 20,00,000+10% 20,000 ( IT Is old style of deciding a room rent) www.indianchefrecipe.com

31. costing The following are the 2 widely used cost -based pricing techiques: 1.Rule of Thumb Approach 2.Hubbart Formula .Rule of Thumb Approach : It is oldest method of deciding room rent room rent will be fixed at Re.1 for each Rs.1000 spent on contruction Eg: 15,00,000 spent on constructon on room Then RoomRent :?? 15,000 www.indianchefrecipe.com

32. Draw back of Rule of Thumb Approach I t consider only cost not worry of inflation,,competiton,expenses etc sets as occup. as70 % it may or may not occupied in hotels it doest not consider depreciation of Fixed assest Return on Investment is not consider Money bought to start a hotel ( Family,investors,shares,) we need to pay amount from income Unexpected expenses to hotel provision is not made it is will not consider the cost of setting F&B outlets, it will consider only room www.indianchefrecipe.com

33. Hubbart Formula It is invented by Roy Hubbart in 1940 in america it is scientific way of determing room rent calculated in 6 steps Step 1: Calculation of Total Investment Total Investment = owner capital + loan ROI Return on investment ROI = Total investment * Return % Step 2 : calculating Total expenses : Total expenses = operating expenses + taxes and insurance + interest paid on loans + depreciation www.indianchefrecipe.com

34. Hubbart Formula Step 3 : Calculating Gross Operating Revenue Gross Operating Revenue = Total Expenses + ROI Step 4 : Revenue generated by room sales Revenue generated by room sales and ROI = operating revenue -Revenue generated from other sources Step 5 :Total Rooms available during year Total Rooms available during year = Total number of room in hotel * number of days in year T otal rooms available after making provision for vacancy: total rooms available after making provision for vacancy = total room in year * occupancy % www.indianchefrecipe.com

35. Hubbart Formula Step 6: Calculate Average Daily Rate Average Daily Rate : Revenue generated by room sales / total number room available Total Area Room : Rate per square foot for year = Revenue generated by room sales / Total area Room Rate per square foot per day: rate per sq.ft for year / no.day in year Single room rent will be : Rate of single room = Area of single room *Rate per sq.ft per day Double room Rate Double room Rate = Area of double room *Rate per sq.ft per day www.indianchefrecipe.com

36. market pricing it setting the price of room according the guest perception The concept is based on idea The guest is prepared to pay and use it services common methods of market pricing as follows: As per competition : lower the rate Market tolerance : giving competion rates to hotels Rate cutting : off season reducing rates Meals : giving meal plan in packages Giving early check-in to guest according guest rooms www.indianchefrecipe.com

37. Q&A Short 1.Define Room Tariff 2.What are different types of check-in used in hotel? 3.What is crib rate,package,day rate,half day rae? 4.what are the different types of meal plans used? 5.What is tariff card and broucher www.indianchefrecipe.com

38. Q&A Long 1.What are the different bases of charging the room rent? 2.Which is criteria of charging room rent is suitable for commerical hotel? and why? 3.What do yoou understand by a meal plan and explain different types of meal plans offered in hotel? 4.What do you understand by term "Room rate designations" edplain 5.A package rate is beneficial for guest as well as the hotel ? www.indianchefrecipe.com

39. Q&A Long 6.What do you understand by the rule of Thumb approach of fixing the room rent? 7.What are the major draw backs of the rule of Thumb Approach? 8.What are the cost-based room rent determing techniquest?Explain? 9.Explain hubbart formula for detremining room rent and average daily rate with examples www.indianchefrecipe.com