Video we are going to look at how we analyze the revenue and the statistics. So, it is a simple example of typical p&l which is normally giving you the statistics and operating performance for room division for fnb division for miscellaneous here we are comparing the actual results compared to the budget and compared to the previous year and then we are coming we have calculated the variances. So, here you can do the variance analysis in terms of the horizontal irises like in this case, the remain the food and revenue department room department revenue is higher than the budget by 86% food and beverage by 88% other departments by 41%. So, if we look at that, in terms of ratios or in terms of parallel increase, other operating departments are not able to show as much as increased as it should have been showing because of the other room department revenue is higher the number of occupied rooms is higher the FMB department is seems to be okay.

But when we do the vertical analysis also it seems to be seems to be not not really a problem however, the other operating departments are showing a lesser contribution. So, this is one way and then ratio analysis meets, if you want to understand how the hundred and 1000 except extra from the from the rules division is coming out so, you can look at the occupancy ratios. So, occupancy has increased from 31 to 63%. The rate however has dropped from 31 to 38. So, which might be caused by the aggressive marketing strategies or ditch selling the rate for a lower price but trying to get the volume for a lower rate route rev par however, has increased significantly here which has shown that is a good performance. Now, to understand this in more detail, there are certain reports That we should be looking for.

For example, we should be looking for a segment report which will tell us the revenue for each particular segment, an example of segmentation report can we look at this, this is not related to the same, same same data, so, the numbers will not match. However, this is just to explain you the segmentations. So, here we are comparing the segmentation we can compare segmentation in terms of room lives we can compare the revenue for the ADR or for the revenue as well. So, the segmentation will help us with segment is going higher which segment is going lower, which one is as per our target which one is lower than our target, you can depict them in terms of graph in terms of the segmentation contribution for each segment. So, there are many ways of looking at it graphically or by table. Other than that, we can look at the National interior For each segment, we can look at where the guests are coming from which from which country they were coming earlier, which which country they are coming now, which country we actually targeted in our marketing budget and how they have been performing.

So what were the budgets are coming out where the guests are coming from how they are booking the guest if let's say the revenue is lower than the budget or lower than the previous year. So we need we can go into these details reports. Then you have another report, which is called booking pace and sources. So this report will also tell you how the booking has been done in the hotel, how fast the guests are booking traditionally, so sample office report can be seen as here for a segment particularly how many percent of the guests are booking in zero to seven days How many guests are booking in eight to 14 days 15 to 30 days more than 30 days. So here as you can see in this particular hotel, a sample of the data Most of the bookings are coming short short lead 02 million within 15 days they are getting almost 80% of the business.

So means the business is very short term, you can definitely target these type of businesses or this type of segmentation by doing a very short term promotion for you can this report will also tell you when to do cyber promotion for certain different market segments. Every market segment has different needs for their marketing. So, you can analyze that report as well traditionally and for the for the for a company to your target, then you have to also look at the future outlook because profit and loss statement is always giving you the past figure, but what lies in the future. So, these all reports we should also be looking at what is the future of like how the booking pace is happening for the next three months next six months, rather than only looking at words because when we are analyzing the profit and loss statement, or especially particularly the revenue, we are not only focusing on the past, we are always looking on the future feature of the future face of Kabuki.

In the past, maybe it has been a strong month, but it doesn't mean that the next few months are also strong or if the past has been like lusting. It doesn't mean that the future is also like. So your marketing decisions your operating decisions, your decision to update the prices or other strategies depends on how is the future outlook from the hotel. So that is one way to look at the marketing analysis. Let us look at now some other rooms the other departments. So, this has we have not looked at the rooms division but however, rooms division is not the only business in the hotel.

There are 30% other visitors coming from the food and beverage. So how are we going to analyze it So we can analyze it to check what is the impact of low occupancy on the FMB business so, you may have the check the FMB revenue per occupied room, you made the FMB revenue usually in standard hotel come via breakfast and dinner. So you can segment to segment the FMV revenue for each meal period separately so that you can understand where the How much is the occupancy of the seats in the hotel for the library first for the lunch for the dinner. What is the average spending of the hotel of the guests in the breakfast in the lunch in the dinner usually breakfast is nowadays included in the guest room so guests are not spending on the breakfast except when they are combining the rubric but some of them are still selling the breakfast as an add on.

So they are giving a choice to the guests to buy the request. Separate together or separate from the from the guest. In that case, you can Also look at the capture ratio of the hotel guests into each meal period separately so that we can understand are we capitalizing on the market which is already available in the hotel so you can do cover and cover analysis for each meal period. So for cover analysis, what you need and Carver analysis you need to look at each meal period separately in house covers outside covers for each restaurant if you have multiple restaurants. And then also you can look at the menu engineering reports from the from each restaurant separately so to understand which dish are getting more popular, what is not popular and what is profitable and what is more or less profitable. An example of the cover analysis report is given here so you can check the in house guest for breakfast for lunch for dinner and outside guests in terms of revenue and average check as well.

Usually you can also look at separately for food and beverage Ready, but first we need to look at the total revenue. If there is some problem then we go into the food and beverage separately. Once we identify the problem, then we can go back into the menu injury report for that particular meal period to understand what is selling, what is not selling, or what are the problems in there. We our focus is on the total revenue management its total revenue management will come can come from higher volume or higher value. So, usually the hotels are struggling to strike a balance between the value or the value highly. So we should focus on higher ed or higher every check or higher occupancy and higher covers.

Both have some of their advantages and disadvantages following the volume will increase your cost of operations but will give you a lot of turn around in the business and not have chances to upsell the others or other services. If you're selling the rooms for a lower rate There's a high chance that the guests may be spending money on the food and the spa on the other gift shop or other things. You can also do a basement, fill up the hotel up to certain level and then yield higher have higher occupied higher category rooms by charging them a higher rate. You can also look at the value of the hotels not selling to the lower categories or cheaper business segments. But in that case, you your guests will be very limited in the hotel. So if you have a very big restaurant to support in the hotel, it may remain empty.

So in that case, we need to focus on outside Yes, which is not a very easy task. Nowadays, the guest feedback is the guests are not really willing to spend money in the hotel unless it's a very, very specific calm concept. And there's not many options available in the market. In developed markets, there are a lot of free sending Which I given a very tough competition to hotels, overspending in the hotel is more important than the achieved room rare. So, now, we are not looking at the room only room rates we are looking at for your revenue, what is the total revenue, total money being spent by the guests in not only in the rooms but also in the FMB also in the spa. So, higher rates does not guarantee the there is no that there will be higher total revenue in the hotels.

So the guests who are coming for a very high price may go somewhere else for spa and river food and beverage, but the person who is coming for at a lower rate may spend in the spa and also on the food and beverage. So what we need to look at is each segment each guest profile separately how they have been spending in the hotel, what are their spending habits so that we can make a decision which guests to take and which guests not to take. This is called total revenue management. And so, we have to select the guests based on their total spending rather than on the individual who makes group bookings and fit booking fit business is another concept which we are normally deciding in the total revenue management. So, whether we should take group business or whether it should take effect in business grow business will be able to give us higher revenue in total in overall however, it may displace fit revenue which may be coming keep on coming because groups normally are coming only once in a year or once in a while rather than fit is which are coming regularly to the hotel and supporting the hotel.

So, it depends on again on the displacement what how much displacement we are doing in particular situations. And if we are able to inform the guests in advance or arrange the other alternative accommodations for them. So, that are all the total revenue management decisions We have a separate class on the total revenue management which you can check out in our in my profile.