Assignment 4 Review Questions for Accounting and Financial Analysis in the Hospitality Industry

Hospitality Industry Assignment 2
Name:
Tutor:
Institution:
Date:
The revenues per room ratio (RevPAR) is an important metric that hotel managers use to increase the amount of revenue generated from their facilities. Typically, hotel managers generally focus on increasing the occupation rate of their rooms. Sometimes, measures, like using more intensive promotion strategies or even lowering the accommodation fee, can be undertaken to increase the level of occupancy. These measures are only effective in increasing the hotel’s occupancy rate but they do not enhance the revenues generated. RevPAR allows the hoteliers to accurately the optimal room occupancy plan that will boost the revenue generated by the hotel even when some rooms remain unoccupied. This ratio also enables the hotel managers to include the type of rooms occupied in their revenue computations. Cook, Hsu & Marqua, (2014) note that it is important for hotel managers to focus on increasing their RevPAR instead of solely concentrating on increasing their occupancy rate.
Market segmentation has become an important undertaking for all hoteliers. Players in the hospitality industry are empowered to determine the most ideal room rates by understanding the market segment of the patrons they seek. For instance, the hotel manager is enabled to design a distinct room rate for both luxurious and business clients. The duration of the two clients in the facility also differs and this provides an ideal op…