p.s. I like your comment about sometimes letting the room go for less than the incremental cost. You don't want to do all the time but it does offset and helps with the running average. Well done!
So glad I found your channel. Very interested to learn how to make more by selling less as you mention at the end of this video. I checked your video list and don't see a video specifically on that topic though... did I overlook it?? If so, can you link it? Thanks!!
It all depends on reading demand correctly. I've developed a system that let's any property see the future demand for their property. This lets them know when to raise/lower rates. It helps reveal the times of year where you can raise the rates resulting in fewer bookings without sacrificing profit.
Great video, I would also think that mortgage payments is a "burdened" cost as this payment needs to be made monthly regardless of Occ. Hahaha, just had an idea, what if Banks had variable APR based on room demand?
I love that idea. I think it's very possible that you could talk a creative bank into doing that. The key would be being well prepared and confident when presenting. It would look like this: take monthly revenue and divide it by annual revenue. If you get 5% of your business in January then you would make 5% of you annual payments then, and if 20% comes in July, then the payment would be 4 times as much as January. Great idea!
I'm a car dealer but have been thinking about opening a small resort with Treehouses and tiny homes that can be rented. I want to offer mountain biking, and crafts as activities this location. I'm looking for a method to build a detailed business plan including all of the targeted expense percentages. Any ideas?
Nashaat, as people reach out to me with new issues I make new videos. The best advice I have is to watch the videos on this channel to get a good overview, and even specific advice on the different aspects of hotel revenue management.
That likely won't be a big number. Just order a box, case, or a dozen of each item then order more as you get low. Track how often you're reordering to estimate how often each item is being used.
If you take all the expenses then divide by the number of rooms sold, that will include the empty rooms for the burdened (complete) cost. I know that seems like a self-contradictory statement, but look at this example. When you include the cost for cable TV at the end of the year the cable company is going to charge you $10 per month per room regardless of the number of times you sold that room. The rooms that set empty are included in that cost. If you sold more rooms, then the cost per room (sold) would be lower because it would spread across more rooms. If you sold fewer rooms, then the cost per room would go up. This ends up being a big picture number and the industry average for a burdened/complete cost is $40 per room per night. But remember the cost to put someone in a room is usually about $20 because you aren't considering fixed costs like cable and insurance, just the costs like housekeeping which are incurred when you turn a room. I had to have this explained to me 3 times over a few months time period before it finally clicked. The confusion comes because there are 2 different costs.
Jigar, thanks for commenting. At 100% occupancy you are correct. In this example though I'm just using actual rooms sold, so this property would have sold 10,000 of a potential 36,500 room nights. Since we are just calculating what was used I am using actual room nights sold rather than 100% potential occupancy. Thanks for commenting, because I'm sure others have the same question.
Hi guys, very good, informative and clearly explained. I'd love to see more but your website bransonman.com/ is not accessible. I'm getting an 'Error 403 - This web app is stopped' message. Can you send a link to whatever site you're at now please? Andrew
Yikes! Thanks for the heads up Andrew. I started as BransonMan.com then was able to secure a more broad URL at www.HotelRevenueMan.com. All the videos I made before the switch over have the old address, but I had my web developer forward everything to the new site. There must be a hiccup in the system somewhere. I'll have him check it out. I have some additional posts on that site the aren't on youtube. Thanks again, and feel free to send me an email if you have a revenue management question.
p.s. I like your comment about sometimes letting the room go for less than the incremental cost. You don't want to do all the time but it does offset and helps with the running average. Well done!
Thanks, Ricardo!
extremely helpful , thank you ...we need more videos
Thanks for your comment. Are there any specific subjects you'd like me to cover?
This is very good, thanks very much for the well presented information
Thanks, Pius!
So glad I found your channel. Very interested to learn how to make more by selling less as you mention at the end of this video. I checked your video list and don't see a video specifically on that topic though... did I overlook it?? If so, can you link it? Thanks!!
It all depends on reading demand correctly. I've developed a system that let's any property see the future demand for their property. This lets them know when to raise/lower rates. It helps reveal the times of year where you can raise the rates resulting in fewer bookings without sacrificing profit.
This was extremely helpful! Thanks!
Thanks, Lynn!
Nice video Mr. Branson. Thank you for sharing, I appreciate it. Just one comment that may help your viewers, the size of type could be bigger.
Thanks for the feedback. I'm still learning the video editing software, so I'll look into how to make that happen. Thanks for watching!
Great video, I would also think that mortgage payments is a "burdened" cost as this payment needs to be made monthly regardless of Occ.
Hahaha, just had an idea, what if Banks had variable APR based on room demand?
I love that idea. I think it's very possible that you could talk a creative bank into doing that. The key would be being well prepared and confident when presenting. It would look like this: take monthly revenue and divide it by annual revenue. If you get 5% of your business in January then you would make 5% of you annual payments then, and if 20% comes in July, then the payment would be 4 times as much as January. Great idea!
Nice Vedio.. it's really going to help to estimate room cost. appreciate for sharing this video.
Thanks, Dhaval!
I noticed you put “incremental”cost at the very end with the 400,000$. Did you mean to put “Actual Burdened”
I'm a car dealer but have been thinking about opening a small resort with Treehouses and tiny homes that can be rented. I want to offer mountain biking, and crafts as activities this location. I'm looking for a method to build a detailed business plan including all of the targeted expense percentages. Any ideas?
Jim, send me an email and we can setup a free call to see if I have any ideas that might help you. Chris@HotelRevenueMan.com Thanks for reaching out!
This is very good, thank very much for it ငင်is really going to help me
Thanks, Htwe!
i will join anew resort operated since 8 year can you give me some tips to start with.
Nashaat, as people reach out to me with new issues I make new videos. The best advice I have is to watch the videos on this channel to get a good overview, and even specific advice on the different aspects of hotel revenue management.
How to calculate or estimate the number of complimentary items; i.e. disposable slippers, toothbrushes, razors etc.,
needed per month or per year?
That likely won't be a big number. Just order a box, case, or a dozen of each item then order more as you get low. Track how often you're reordering to estimate how often each item is being used.
All expense / total number of rooms sold. Do we have to take those empty rooms into consideration>
If you take all the expenses then divide by the number of rooms sold, that will include the empty rooms for the burdened (complete) cost. I know that seems like a self-contradictory statement, but look at this example. When you include the cost for cable TV at the end of the year the cable company is going to charge you $10 per month per room regardless of the number of times you sold that room. The rooms that set empty are included in that cost. If you sold more rooms, then the cost per room (sold) would be lower because it would spread across more rooms. If you sold fewer rooms, then the cost per room would go up. This ends up being a big picture number and the industry average for a burdened/complete cost is $40 per room per night. But remember the cost to put someone in a room is usually about $20 because you aren't considering fixed costs like cable and insurance, just the costs like housekeeping which are incurred when you turn a room. I had to have this explained to me 3 times over a few months time period before it finally clicked. The confusion comes because there are 2 different costs.
I would use the monthly burdened cost number as my go to basis number for my "heads in beds" because it is all inclusive .... easier for me that way..
I want to know user freindly accounting software for hotels with low price.. Can you suggest?
Sorry, Farhad, but I'm not sure.
fantastic!!!
Can you help me understand flow through?
I'm happy to, but I'm not familiar with that term.
Wait, so shouldn’t your cost be $60/night ($20 incremental + $40 burdened)? If not, then why not?
Sorry, Dan, I just saw this comment. It's one or the other depending on the scenario you're working with. They are two separate costs, not combined.
Rooms you sold is #36,500 not #10,000. Am I right? You have 100 rooms times 365 days would equal to 36,500 at your best potential.
Jigar, thanks for commenting. At 100% occupancy you are correct. In this example though I'm just using actual rooms sold, so this property would have sold 10,000 of a potential 36,500 room nights. Since we are just calculating what was used I am using actual room nights sold rather than 100% potential occupancy. Thanks for commenting, because I'm sure others have the same question.
Hi guys, very good, informative and clearly explained. I'd love to see more but your website bransonman.com/ is not accessible. I'm getting an 'Error 403 - This web app is stopped' message. Can you send a link to whatever site you're at now please? Andrew
Yikes! Thanks for the heads up Andrew. I started as BransonMan.com then was able to secure a more broad URL at www.HotelRevenueMan.com. All the videos I made before the switch over have the old address, but I had my web developer forward everything to the new site. There must be a hiccup in the system somewhere. I'll have him check it out. I have some additional posts on that site the aren't on youtube. Thanks again, and feel free to send me an email if you have a revenue management question.
BransonMan.com will now forward to HotelRevenueMan.com. Thanks for letting me know!