As you can see from the data presented in Figure 6.10, many major hotel companies—and thus the great majority of all hotels operating in the United States—do not accept individual room reservations for dates that are more than one year in the future. Although not every chain is listed, those not included employ similar policies. Thus, in over 295,000 U.S.
hotels it might appear that RMs need only concern themselves with monitoring current data related to the upcoming 365 days. In fact, in most of these hotels that would not be Essential RM Term
Minimum length of stay (MLOS): A revenue management strategy that instructs reservationists to decline any room reservation request that does not equal or exceed the predetermined minimum number of nights allowed. For example: “We need to put an MLOS of two nights on any room requests that include October 17.”
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true. This is so because RMs in most properties must also carefully monitor current data related to group room and group pace sales.
In Chapter 1, you learned that a pace report is a summary description of future demand for a lodging property’s rooms or other services. A group rooms pace report summarizes future demand for group rooms. It is important to understand that this is also considered current (not future) data because the rooms identifi ed in these reports, regardless of the number of years in advance, represent rooms that are already sold or are being held for sale.
They are not rooms considered available to be sold in the future.
Perhaps one of the greatest misunderstandings an inexperienced lodging industry observer has about the hotel business relates to how reservations for rooms are made. Many think that the majority of hotel room sales in a typical hotel are made to individuals. In some cases this may be true, but in many more cases, the majority of room sales are made to groups of individuals or to individuals reserving large numbers of rooms for a specifi c group. In most cases, these rooms will be reserved and held for purchase at a date in the future that can easily range from a few weeks to several years in the future.
Although some PMS systems can accommodate recording and reporting the data related to far-in-advance group sales, most cannot. As a result, in most cases infor-mation about them will be compiled in a group rooms pace report, will be updated regu-larly, and will be maintained in the property’s sales and marketing fi les. As a result, RMs should monitor these pace reports just as closely as they monitor current data reports from the PMS.
To better understand the rationale for creating and regularly analyzing group rooms pace reports, consider the RM whose hotel is located in a city that houses a university that is a member of the South East Conference (SEC). This university plays a home football game each year against a major rival and the following year plays the game in the rival’s home
Figure 6.10 Days Into the Future Reservations are Accepted by Selected Hotel Chains
Hotel Brand
Number of Operated and/
or Franchised Hotels5 Accepts Reservations
Choice 5,376 364 days out/52 weeks out
Best Western 3,952 350 days out/50 weeks out
IHG 3,741 350 days out/50 weeks out
Hilton 2,935 364 days out/52 weeks out
Accor 4,121 404 days out/57 weeks out
Marriott 2,832 350 days out/50 weeks out
Wyndham Hotel Group 6,473 Varies with brand; typically 6 months to 1 year out
Total 29,430
Essential RM Term
Group rooms pace report: A summary report describing the amount of future demand for a lodging property’s group rooms and the rate(s) at which that group business has been captured. Also referred to as a group rooms booking pace report.
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city. Hotel rooms in both cities sell out when the game is held in the local stadium. In this example, the RM’s hotel has secured a contract to house the visiting football team on those alternating years it comes to town. In such a case, this hotel will need to block the required rooms, two, four and/or even six years in advance of the game. These blocked rooms would not be entered as a sale in the PMS because that system can only record reservations made one year in advance. The group room commitment made to this visiting university would instead be identifi ed on the hotel’s group rooms pace report.
In hotels that host extremely large meetings and conferences group rooms pace reports may indicate blocked rooms for dates that are up to ten (or even more) years in the future. Identifying those days on which rooms have already been reserved helps RMs better make their pricing and rooms inventory-related management decisions regarding remaining rooms that will be sold to transient guests. Properly prepared and monitored, however, group rooms pace reports can do even more.
In all cases RMs should ensure that confi rmed group sales made by their property’s sales and marketing team during the month, for all future months, are recorded and reported regu-larly. Of course, some of these sales may be made during the month, for that current month;
but many more will likely be made for a future date that is several months or years in the future.
Each of these sales has the potential to signifi cantly impact revenue management decision making. Thus, each should be included in any consideration of pricing and rooms inventory allocation decisions related to the dates affected by those specifi c sales. In addition, if the hotel experiences any group cancellations or signifi cant room block reductions on previously made group sales these should also be refl ected in the updated group pace reports.
Many RMs, working in conjunction with their sales and marketing team will, on a monthly basis, also assess tentative sales.
While individual room reservations are almost never held in tentative sale status, tenta-tive group room sales occur often and for a variety of reasons. For example, a client seeking to purchase 500 room nights for a specifi c time period two years in the future may ask to review a sales contract before signing. During the agreed–on review period, the requested rooms may be held in anticipation of the customer’s contract signature. This ensures they cannot mistak-enly be sold to another client during the original customer’s allotted contract review period.
When tentative sales (contracts) are reported as part of the hotel’s group rooms pace report, the number of days the rooms have been held in tentative sale status, as well as the agreed-on signing or release date of the rooms, should also be noted and enforced.
Similarly, if a hotel has submitted a bid for a room sale to an entity requesting rooms on a future date, those rooms may be held (in tentative sales status) during the agreed bid evaluation period identifi ed in the request for proposal (RFP). This ensures that, should the hotel win the group room’s contract for which they have bid, the rooms promised in the bid will not have mistakenly been committed or sold to other customers. It also means that if the hotel does not win the group room’s contract or if the group’s decision is not made by the agreed upon date, then the hotel reserves the right to release those rooms for sale to other buyers.
Essential RM Term
Tentative (sale): The situation that occurs when a hotel blocks group rooms for a specifi c date in anticipation of a future confi rmed contract or sale.
Essential RM Term
Request for proposal (RFP): An offi cial request by a potential rooms or space buyer that a hotel quote, in writing, its rates and contract terms in response to the buyer’s specifi cally identifi ed rooms or space needs.
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RMs assessing future rooms sales are interested in two issues:
1. How many rooms have been sold at this point?
2. How quickly are we selling our remaining rooms?
Some RMs record the number of rooms or group rooms that have currently been sold or held for a future date using a position report. A position report states the total rooms sold for a future date of interest but does not compare that number to sales levels achieved in a prior time period.
Position reports are important because they indicate the amount of sales volume already achieved. Pace reports, however, help RMs answer the second question: “How quickly are we selling our remaining rooms.”
As you learned in Chapter 1, the rate or speed at which unsold rooms are being purchased compared to a previous time period is documented in a hotel’s pace report. To assess the pace at which group room sales take place, RMs should rely on an up-to-date, accurate, and monthly or more frequently prepared group rooms pace report.
Figure 6.11 is an example of such a summary group rooms pace report for the McAllister Hotel. Note that it that also includes a comparison to group rooms sales achieved during the same Essential RM Term
Position report: A simplifi ed form of a pace report that summarizes rooms sold or held for a future date or time period.
ROOM SALES FOR USE IN 20XY
1. Month
2. Rooms Sold for This Month
3. Total Sold for This Month YTD
4. Rooms Sold for This Month
Last Year
5. Rooms Sold for This Month
Last YTD
Jan 150 950 50 100
Feb 800 2,250 600 2,000
Mar 950 3,500 1,150 3,750
Apr 725 2,900 850 3,100
May 600 1,800 900 1,600
June 150 1,400 600 1,200
July 10,800 22,800 8,800 19,500
Aug 1,900 18,500 1,825 16,500
Sept 1,500 15,500 1,400 22,500
Oct 1,300 9,000 1,200 10,500
Nov 1,850 9,800 1,900 9,600
Dec 1,200 17,500 1,400 15,550
TOTAL 21,925 105,900 20,675 105,900
Figure 6.11 McAllister Plaza Group Rooms Pace Report for DECEMBER, 20XX c06RevenueManagementforHoteliers182 Page 182 9/6/10 9:43:34 PM user-f391
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