HTM 180 Exam 2

demand

the amount of service customers want during a particular period

supply

the service resources an operation makes available to meet demand

capacity

the amount of service an operation CAN provide during a particular period

perishable capacity

a service opportunity that cannot be stored and sold after its time has passed

optimal capacity

a level of activity that uses resources effectively while allowing the intended service quality

maximum capacity

the greatest amount of service the operation can provide with its available resources

level capacity strategy

keep capacity relatively constant and stimulate or shift demand

chase demand strategy

adjust available supply or operating capacity to match demand

forecasting

using relevant information and judgment to anticipate future events or demand

top-down forecasting

begin with an overall forecast and work down to individual products, days, or segments

bottom-up forecasting

forecast individual components and combine them into an overall forecast

forecast horizons

short term: under 3 months; medium term: 3 months to 3 years; long-term: 3 years or more

internal factors

influences within the operation, such as price, promotions, products, channels, processes, and physical resources

external factors

influences outside the operation, such as competition, economic conditions, demographics, events, and crises

subjective or qualitative methods

use informed judgment and experience

causal methods

use relationships between demand and other variables, such as event attendance or prices

time-series methods

use patterns in demand over time to estimate future demand

trend

a general increase or decrease over time

seasonality

a recurring pattern at particular times

forecast error

actual demand minus forecast demand

yield management

use expected demand to adjust prices and sales decisions for limited, perishable capacity

ADR

total room revenue/number of rooms sold

occupancy percentage

number of rooms occupied/number of rooms available x 100

revPAR

total room revenue/number of rooms available (ADR x occupancy as a decimal)

suburban

meet the needs of business and leisure travelers with a wide range of accommodations and services; usually offer signature restaurant, lounge, named bar, meeting and convention rooms, ballroom, etc.

airport

general high occupancy, usually full-service, and accommodate shorter average stays

resort

most family friendly while also working to attract conventions and conferences, diversified their marketing to attract business and sales meetings, incentive groups, sporting events, spas, adventure tourism, and ecotourism; longer average stay

freeway/interstate

quick and convenient place to stay near freeways exits, smaller in size and rooms, often independent or franchised

full service

full range of facilities, services, and amenities for both business and pleasure travelers

select/limited service

limited scope of food and beverage operations, small or no meeting spaces

economy/budget

clean, reasonably sized, and furnished without “frills”; normally do not offer meals or meeting rooms

luxury

high-class target market, high personalization and distinctive services, variable length of stay

conference/convention

large public areas and banquet facilities, a business center, travel desk, airport shuttle, etc.

extended stay

rates depend on length of stay, offers more space and full kitchen, multiple ADR chain scales

lifestyle

oriented towards those who value design, local character, social spaces, food and beverage, and distinctive options; psychographic market; short to moderate length of stay

all-inclusive

one reservation generates demand across multiple operating departments but at a singular rate; multi-night stays

brand/affiliation

parent company vs brand; a parent company typically has multiple hotel brands, and brands allow companies to serve different market segments, price points, service levels, and customer needs

transient

individual reservation; not part of a group or negotiated contract

group

reservation associated with a larger block of rooms; conferences, sports teams, weddings, or other organized groups

negotiated/contract

business generated through an agreement between an organization and hotel'; corporate travelers or other recurring contracted business

forecasting

anticipating future demand

inventory control

deciding how available capacity will be used (right heads in the right beds at the right time)

capacity

the amount of service an operation has available to sell or provide

perishable capacity/inventory

capacity that cannot be stored and sold later once its available time has passed

hotel (time based inventory)

room/night

restaurant (time based inventory)

seat/hour

airline (time based inventory)

seat/flight or seat-mile

rental car

car/day

golf

tee time

spa

treatment room/hour

revPAR

revenue per available room

revPATI

revenue per available time-based inventory

revenue management

using information about demand, price, customer segments, capacity, and timing to decide how limited inventory should be sold

capacity allocation

deciding how much limited capacity should be made available to different types of customers

main purchase

the primary product being purchased, such as the hotel room

ancillary revenue

revenue generated by the customer beyond the primary purchase

total customer revenue

sum of all income generated from product sales, services, subscriptions, and transactions

reservation

capacity promised to a customer for a future period

cancellation

a customer cancels before arrival/use

no-show

a customer with a booking does not arrive

overbooking

accepting reservations beyond physical capacity based on the expectation that some reservations will cancel or no-show

displacement

accepting one piece of business prevents the operation from accepting another

cost of walk

costs associated with being unable to accommodate a customer with a confirmed reservation

dynamic pricing

prices can change based on demand and market conditions

rate fence

a rule or requirement attached to access to a particular price; student/senior rate, nonrefundable rate, weekend-stay requirement, etc.

supply chain

the connected organizations and activities that provide the goods and services an operation needs

supply chain management

coordinating suppliers, activities, and flows of goods, information, and money so the operation can serve customers effectively

logistics

coordinating the movement and storage of goods

supply risk and disruption

the possibility of, and actual interruption to, the availability or delivery of needed resources

supply chain resilience

the ability to prepare for, respond to, and recover from disruption

sustainability

meeting current needs while considering environmental, social, and future resource impacts

procurement

the broader process of identifying needs and acquiring and managing the goods and services needed to operate

sourcing

the part of procurement concerned with finding, evaluating, and selecting sources of supply

purchasing

ordering and buying goods or services, including the transaction and payment activities

specifications

requirements describing what is needed, including quality, size, performance, quantity, and delivery

FF&E

furniture, fixtures, and equipment, such as beds, desks, lighting fixtures, and major kitchen equipment

OS&E

operating supplies and equipment such as linens, glassware, utensils, guest amenities, and housekeeping

managed services

an ongoing arrangement in which a provider manages an agreed operating need, such as supplying, collecting, laundering, and replacing rented uniforms

physical inventory or stock

tangible resources held for use or sale, such as food, beverages, linens, and cleaning supplies

safety stock

extra stock held to cover uncertainty in supply or demand

par level

an established target quantity of stock; for hotel linen, one par is one complete set needed for the operation

lead time

time between placing an order and receiving it

reorder point

the stock level that triggers replenishment, allowing for expected use during lead time and any safety stock

purchasing cost

the cost of the goods themselves

ordering cost

the cost associated with placing and processing orders

holding cost

the cost of carrying stock, including capital, storage, handling, and deterioration where applicable

economies of scale

cost advantages that can arise from larger purchase quantities

Economic Order Quantity (EOQ)

an order quantity intended to balance ordering and holding costs