Improving Seasonality

13th SETE Conference

Divani Apollon Palace
20 Oct 21 Oct 2014

21-Oct-14 Inova Hospitality Management 2

 Improving Seasonality Theory to
practice a revenue management
approach

21-Oct-14 Inova Hospitality Management 3

 Improving Seasonality The theory

The definition of seasonality

Temporal imbalance in the phenomenon of tourism

which may be expressed in terms of dimensions of such
elements as numbers of visitors, expenditure of visitors,
traffic on highways and other forms of transportation,
employment and admission to attractions
R.W. Butler Seasonality in Tourism 1994

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 Improving Seasonality The theory
The seasonality model

DEMAND FACTORS SUPPLY ATTRIBUTES

Response to natural seasons Climatic conditions
Institutionalized holidays Physical attractions
Vacation tradition/inertia Activity opportunities
Changing tastes Social/cultural
attractions/events
MODYFYING ACTIONS
Differential pricing and
taxation
New attractions & events
Market diversification

PATTERN OF TOURISM
SEASONALITY AT A
DESTINATION
Baum/Lundtrop Seasonality in Tourism
2001

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 Improving Seasonality The theory
The spatial seasonality model
GENERATING AREA RECEIVING AREA
CLIMATIC FACTORS CLIMATIC FACTORS
Temperature Temperature
Precipitation Precipitation
Sunlight Sunlight, Daylight
Daylight Flora, Fauna, Physical
features

SPATIAL/TEMPORAL
PATTERNS OF
TOURISM AT A
DESTINATION
PATTERN OF DISTRIBUTION OF
SOCIAL/CULTURAL SOCIAL/CULTURAL
FACTORS FACTORS
Holiday availability Sporting attractions
Religious beliefs Religious beliefs
Traditions Trade fairs/Expos Baum/Lundtrop
Fashion/Tastes Special events Seasonality in
Sport activities/preferences Cultural events/patterns Tourism 2001

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 Improving seasonality The theory
The economy of seasonality - the resort hotel
9 Revenue (Rev)
8
Cost fixed (C1)
7
Cost Total (Fix + Var)
6 (C2)
5
4
3
2
1
0

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 Improving seasonality
Seasons within Seasons....the opportunity within
9 Peak season
8
7
6
Shoulder season Shoulder season
5
4
3 Off Off
season season
2
1
0

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 Improving Seasonality

The metrics of seasons - season contributions

151 days 92 days 122 days

41% 25% 34%

Contribution of Contribution of Contribution of
Off season in Shoulder season Core season in
days in days days

16th of Nov. 15th of April 16th of Apr. 31st of May 1st of June 30th of Sept.
01st Oct. 15th of Nov.

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 Improving Seasonality

The metrics of seasons the real opportunity

42% >30% >50%

Contribution off Opportunity of Opportunity of
shoulder season additional GOPPAR increase
towards existing revenue with with optimized
operations period optimized shoulder season
shoulder season

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 Improving seasonality
The economy of seasonality - the beast

Low rate & low

occupancy =
negative result

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 Improving seasonality
The economy of seasonality - the beauty
10 Revenue Y1
9
8 Revenue Y2

7 Revenue Y3
6
5
4
3
2
1
0

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 Improving seasonality
The economy of seasonality - the beauty

Low rate &

increased
occupancy =
positive result

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 Improving seasonality
Price differentiation- starting from.

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 Improving seasonality
Price differentiation rate steps matter
400,00

350,00
Promo DBL
300,00 Double GV
Price per room per night

DBL SV
250,00
Superior DBL GV
200,00 Superior DBL SV
Family room GV
150,00
Family room SV
100,00 Junior Suite
Suite
50,00
Average
-
Hotel 1 Hotel 2

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 Improving seasonality
Price differentiation aiming for the result
400,00
Demand oriented
350,00 room type pricing Promo DBL
increases
300,00 Double GV
occupancy and
DBL SV
250,00 RevPAR!
Superior DBL GV
200,00 Superior DBL SV
Family room GV
150,00
Family room SV
RevPAR
100,00 Junior Suite
RevPAR
Suite
50,00
Average (ADR)
-
Hotel 1 Hotel 2

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 Improving seasonality
Diversified F&B offers = Improved revenue opportunities

Room plus B&B Room plus B&B

Room plus HB Room plus HB

Room plus FB Room plus FB

Room plus AI Room plus AI

Hotel 1 Hotel 2
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 Improving seasonality
The economy of seasonality - the packaged rate
Midscale hotel abs. contribution of package elements to total
2.500,00
package cost in Euro

Margin
Package cost in Euro per room

2.000,00 510,00
Flight
250,00
1.500,00
150,00
Transfer
1.000,00 255,00
200,00 Hotel
1.300,00
500,00
500,00
0,00
Core season Shoulder season

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 Improving seasonality
The economy of seasonality - the packaged rate
Midscale hotel abs. contribution of package elements to total
100,00% package cost in %
Margin
90,00% 23% 23%
Package cost in Euro per room

80,00%
Flight
70,00% 11%
18%
60,00% 7%
Transfer
50,00%
40,00%
Hotel
30,00% 59%
20,00% 45%

10,00%
0,00%
Core season Shoulder season

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 Improving seasonality
Theory put into reality and it works!

2011 2014

Days of operation + 20%

Room nights booked + 24%

Average occupancy + 3%

ADR core season + 77%

ADR shoulder season + 45%

Arrangement turnover + 97%

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Thank you for your attention!