Reference no: EM133120279

Revenue Management Pricing Assignment

Doubletree by Hilton will be opening this year in downtown Windsor. It is situated adjacent to Best Western Plus, with a total of 161 guest rooms. Rooms on the front of the building will have water views. It will feature a restaurant for breakfast only (Hash Eatery) and Forno's for lunch and dinner (with room service). There will be an indoor pool, fitness room, 2 meeting rooms, business centre and sundries market. WIFI is free and self parking is available nearby for $15/night. An extra amenity for this brand is freshly baked chocolate chip cookies at check-in. They will not accept pets. The hotel is owned by the same company as Best Western Plus and Holiday Inn Express Waterfront.

Assuming you are in a position to set room rates for this hotel, you are tasked with establishing a pricing strategy for some basic rate plans. First you should know which hotels will be considered its direct competitors. They include Best Western Plus, Holiday Inn Express, TownePlace Suites by Marriott and Four Points by Sheraton in the downtown area, plus Hampton Inn & Suites on Huron Church Road, since it's also part of the Hilton brand.

Now that we know our direct competitors, we need to determine where we should position our rates among this comp (competitive) set. This is a full-service waterfront hotel, and while most of the other hotels have been recently renovated and in good condition, this is the newest. Rates should therefore be among the highest. However, we will need to create exposure and build business from scratch, so we probably shouldn't start off too aggressive, especially without knowing when exactly it will open to receive guests.

I don't consider Windsor to be a seasonal market, so you don't need to establish pricing by season.

An Excel spreadsheet is provided for you to populate highlighted areas.
Visit brand websites (not OTA) and check the rates for the comp set hotels for 1 and 2 persons for a one- night stay on September 28, 2022. These hotels are listed on the template for your convenience.

Remember they are in Windsor. On brand websites, you will see a limited number of rate plans, usually flexible standard rate/BAR (Best Available Rate), loyalty program member rate, advance purchase, CAA, senior rates etc. You won't find corporate, LNR (Local Negotiated Rate) and group rates on websites.

Enter these 1 and 2 person rates by the room types I have listed into the provided template. Be careful to view rates for standard room types, not suites or premium views or accessible. Do not call the hotels for this information. Keep in mind that full breakfast is included at all comp set hotels except Four Points by Sheraton. Breakfast is not free at Doubletree.

Now, based on the BAR/standard rates you see that the comp set hotels have in place, and what you learned in this week's class and perhaps from earlier classes as well, consider what 3 BAR/standard rate tiers should be for Doubletree, and enter them into the template. Decide whether these rates should be the same for either 1 or 2 guests sharing a room, or if you recommend a higher rate when there are 2 guests.

Then enter the rates you recommend that Doubletree have for corporate, LNR, and the listed 4 group segments. The corporate here is a standard corporate rate that can be offered to a guest travelling on business, without a local negotiated rate agreement. You'll see 3 different rate tiers for LNR, based on the annual room night (RN) volume. Obviously, the higher the volume, the lower the rate to be offered.

As mentioned earlier, use your judgement when setting rates for Doubletree based on what you've learned. Although we talked about how rates could end in $0.99 or $0.95, for simplicity purposes, use whole dollars (i.e. $139 vs $139.95).

Attachment:- Revenue Management Pricing.rar