Target Return Pricing For Hotels

Hotel management

What you'll learn

Identify the Return of Investment

Determine departmental income

Determine departmental costs

Determine room rates based on R.O.I.

Learn to use the Hubbart-Formula

Learn return target pricing

Determine profitability of the hotel

Requirements

Basic understanding of profit and loss statement

Basic understanding of hotel operations

Description

This course 'Target return pricing for hotels' is based towards students who are interested in learning how to figure out room rates for new hotel projects and determine if the project is feasible. This could be building a new hotel, investing in a hotel project or the renovation of an exisisting property.Together we will discuss what needs to be achieved in order to achieve a pre set return on investment for the hotel owner and or other investors. You will learn how to simply decide room rates for a basic hotel property like a bed and breakfast or a hotel with limited departments.You will also learn how to assess a hotel's value based on this principle and a limited amount of key performance indicators, like Average Room Rate and RevPAR.Together we will discuss all the elements needed to set up a full and thererfor more complex Target return pricing. We will follow an example of a full scale hotel to determine what needs to be achieved to get the desired net profit after profit taxes.By the end of this course you will have a solid foundation and understanding of Target return pricing for hotels. You will learn how to calculate profit taxes on unknown revenues to get a desired outcome. You'll learn how interests, fixed franchise fees and variable franchise fees are included in this set up. We take all departements of the hotel into consideration to determine the profit of the rooms division. Based on our set up we can calculate room rates for the rooms of our hotel. We will take the occupancy rate and the double occupancy rate into the equation as well to come up with different rates. And to make it more interesting we'll have a look at how we can use square footage to calculate room rates for our hotel.If you are part of a management team responsible for opening a new hotel or if you are interested in, investing in your own hotel or lodging company, target return pricing is definitely something to have a closer look at to help you determine if the project is feasible for the market you want to operate in!

Overview

Section 1: Introduction

Lecture 1 Introduction

Lecture 2 What is target return pricing

Lecture 3 Why use target return pricing

Lecture 4 Price setting

Lecture 5 To execute target return pricing

Lecture 6 When to use target return pricing

Section 2: Calculating target return pricing

Lecture 7 Calculating target return pricing

Lecture 8 Pricing strategies

Section 3: Return on investment

Lecture 9 The return on investment

Section 4: The simple approach and valuating a hotel property

Lecture 10 The simple approach

Section 5: A full example for target return pricing

Lecture 11 The target return pricing example

Lecture 12 The R.O.I.

Lecture 13 The profit tax

Lecture 14 Fixed costs and interests

Lecture 15 Other fixed costs

Lecture 16 Operational overhead

Lecture 17 Departmental profit

Lecture 18 The rooms department

Lecture 19 Direct costs

Lecture 20 Franchise fee

Lecture 21 The average room rate

Section 6: The square footage method

Lecture 22 Square footage calculation

Section 7: The conculsion

Lecture 23 Rearranging the numbers

Lecture 24 The conclusion

Hotel managers,Investors,Hotel owners,People who want to start their own hotel,Accountants