Management and Event Impact Analysis in Hospitality HTM4027

Introduction

This is the revenue management analysis presentation for W Brisbane, a 5-star hotel with 312 rooms in Brisbane City Centre. This particular information is focused on the way the Rugby Championship, which match between Australia's Wallabies along with South Africa's Springboks has impacted the hotel's performance. Key performance indicators (KPIs) will be talked about in detail to demonstrate the way the event impacted occupancy, revenue, and ADR. The analysis covers three weeks, week before it (Week -1), the week of the event (Week 0) and the week after the event (Week + 1). This analysis utilises historic September 2021 data on three performance metrics. Occupancy, Average Daily Rate (ADR) & Revenue. One seeks to quantify and compare these metrics the week of the Rugby Championship competition with those the week prior and the week following.

Analysis Of Occupancy

The occupancy analysis reveals fairly stable rates throughout Week -1 though a substantial spike on the event day (Saturday) of Week 0 reaching 99%. This shows a tremendous boost in participation at the Rugby Championship. Week + 1 post-event occupancy continues above pre-event levels, indicating a persistent effect. The event especially impacted weekend occupancy, with Saturdays drawing in probably the highest rates of all 3 weeks.

Occupancy Rates

This displays weekly occupancy levels for the 3 weeks with an emphasis on Week 0's highest on the event day (Saturday).

• Week -1: The average occupancy ranged from as low as 65%, recorded on Monday, to the highest, 99%, recorded on Saturday. Weekly occupancy was higher than on weekdays, more than on Saturdays (99 %).

• Week 0 (Event Week): Average occupancy is rising to twofold or more. Weekdays between Monday and Friday varied between 67% and 100%, while for Friday and Saturday, it was 100%. Weekend occupancy was relatively high, with the highest figure on Saturday ($100 % $).

• Week +1: Average occupancy reduced significantly during weekdays when Friday had reduced to 58% Sunday was at 58%. Sunday showed [98 % occupancy], although this was not as high as Saturday.

Analysis by ADR

The ADR analysis reveals stable rates during Week -1 through a substantial uptick on the last day (Saturday) of Week 0 towards AUD 840. This implies the hotel might raise rates because of the Rugby Championship causing higher demand. ADR decreases somewhat post-event but stays above pre-event levels (Aben et al., 2022).

• Week -1: ADR stood between $480 (Sunday) and $736 (Saturday).

• Week 0: The ADR for the weekends rose and was much higher on the weekend, reaching $840.

• Week +1: ADR also had a frequency distribution, indicating a slight decrease on weekdays while increasing and remaining constant on the weekends (e.g., $696 on Thursday).

Revenue Analysis

Revenue analysis: consistent in Week -1 with a substantial increase on the event day (Saturday) in Week 0 to AUD 262,080. This rise is because of the Rugby Championship's combined ADR & occupancy spikes. Revenue falls somewhat post-event but stays above pre-event levels, showing continued interest (Mair et al., 2023). The event significantly increased weekend income and benefited the resort economically.

• Week -1: Total sales differed; the highest point on Saturday was $227,424.

• Week 0 (Event Week): The hotel and ADR were highly occupied during the weekend, resulting in a total revenue of $262,080 for Saturday and $249,600 for Friday.

• Week +1: Total sales reduced, implying a lower daily average for the weekdays, with Monday at $141000.

Revenue Table

This table displays the revenue patterns for the 3 days, displaying the peak on the event day (Saturday) of Week 1. It enables comparison of pre-event (Week -1), event Week (Week 0) and post-event (Week + 1) revenue. The graph additionally shows the increased revenue at weekends showing the way the Rugby Championship may substantially influence the hotel earnings.

Performance Weekday vs Weekend

Comparison between Weekdays and Weekends:

Occupancy

Week -1:

• Weekdays (Mon-Thu): The occupancy rate ranged between 65-90 per cent.

• Weekend (Fri-Sun): Rooms are often more occupied on Saturday with 99% as compared to Sunday with 64%.

Week 0 (Event Week):

• Weekdays (Mon-Thu): Occupancy soared by one hundred per cent on Friday and Saturday.

• Weekend (Fri-Sun): Occupancy was relatively high on Saturday, standing at 100%; however, on Sunday, it had reduced to 80%.

Week +1:

• Weekdays (Mon-Thu): Occupancy was a little low: Tues and Fri less populated (58% on Fri).

• Weekend (Fri-Sun): Saturday was occupied to the maximum level, 98%, while Sunday was half full with only 58%.

It will be noted that the Rugby Championship greatly influences the occupancy rate during the event week, especially on the weekend when the rugby event is held. After the event (Week +1), occupancy decreases, especially on weekdays, showing that the effects of the event may be temporary.

Analysis of ADR

Comparison between Weekdays and Weekends:

• Week -1: ADR bed ranged from $480 and reached its high of $736 on Saturday.

• Week 0 (Event Week): Rates will increase according to the days of the week ($800 for Friday and $840 for Saturday).

• Week +1: There is a little range in ADR, which was slightly low only on Tuesday, while it was comparatively higher on the other days like Thursday, $696.

Week 0 shows the occurrence of the event that the hotel takes advantage of and raises the ADR as the demand for the rugby match is high. Even though occupancy is lower on weekdays with bookings in Week +1, ADR stays more or less constant, which shows good rate management.

Revenue Analysis

Comparison between Weekdays and Weekends:

• Week -1 total sales were erratic, with the highest amount earned on Saturday, $227,424.

• Week 0 (Event Week): Peak total revenue is recorded on Friday at $249,600 and on Saturday at $262,080 because of higher occupancy and ADR.

• Week + 1: Revenue decreases on weekdays, such as Monday ($ 141,000) compared to the event week.

Revenue trends are aligned with occupancy analyzed ADR, meaning these variables are interrelated. Adverse changes in revenue observed after an event suggest conceptual problems in retaining guests and maintaining a high rate after the event.

Modifications in Data Interpretation

The Rugby Championship event produced an enormous occupancy jump on event morning, enabling the hotel to boost ADR because of higher demand. This generated considerable extra revenue. Interest continues following event data, maybe because of ongoing event related activities or prolonged absences. The event experienced a notable positive impact on the hotel's key performance indicators - especially during the week (Duan, Xie & Morrison, 2022).

Correlation

In general, occupancy, ADR, and revenue have a direct relation, and it is necessary to adjust them to achieve high performance in hotels. The costs of products, gross and net, are interrelated and frequently referred to as the big three. They are related to each other since they all impact overall profitability.

Occupancy Rate

Occupancy is the extent to which the rooms are sold out in a particular period as a percentage of the number available. Even though occupancy rates should be high, such a situation may suggest that room rates are too low, depriving the accommodation of possible extra revenue. For instance, if a hotel fixes its occupancy rate at 100% yet realizes low revenues because the rates offered to clients are much lower than usual, the new concept is potentially more beneficial to such a hotel than a hotel that would achieve low occupancy rates and high rates concurrently.

Average Daily Rate (ADR)

Under ADR, the property measures the income it generates from each room sold. Higher ADR tends to mean better overall revenues, but it can also decrease occupancy if customer rates are too high. Thus, it is possible to conclude that there is a need to find an optimal relationship between occupancy rate and ADR to maximize revenues. For instance, during peak events, some hotels will figure out how to achieve a higher ADR to utilize demand for better revenues, although the occupancy might be lower.

Revenue per Available Room

It contrasts with occupancy because it also contains ADR, which offers a better understanding of a hotel business's performance. It is usually arrived at through occupancy and ADR or Total revenue divided by Available rooms. This metric reveals a hotel's capacity to generate income from the available stock.

Industry Research Insights

Based on market research, the Rugby Championship generates numerous overseas guests triggering need for top notch accommodations like W Brisbane (Janssen, 2021). The time of the event affects reservation habits and guests frequently prolong their stay. Such events have a long-term advantage since repeat guests will return to the resort. Realizing these insights aids in preparing similar events.

Conclusion

W Brisbane benefited from the Rugby Championship and improved occupancy, ADR and income notably on weekends. Demand periods like the event day witnessed strategic pricing drive revenue. Post-event data suggests continued interest, indicating potential for long-term advantages. These outcomes highlight the importance to leverage significant events in revenue management plans.

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