Difference between revisions of "Cost price"

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[[Category:Hotel info]]__NOTOC__ __NOEDITSECTION__
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''→ Go! [[:Category:Hotel info]]'' <br>
== Cost price per room ==
{{Running competition}}
Data on the [[occupancy rate]] of the rooms, as well as the variable and fixed [[costs]] per room are available on the history. So you could calculate the cost price per room (type) and per season. So, by doing so you also know what the minimum price has to be, to cover these costs. <br>
== Cost price per room==
In hotel industry a famous ratio to work with would be the [[RevPAR|Revenu per available room]].  
You know the [[occupancy rate]] of the rooms, and you know the variable and fixed [[costs]] per room. Both on this platform and in your Team sheet (mouse over in tab Results).  


It is the standard rate or published tariff defined by the hotel management for a particular room category/type. This is what generally is shown on the tariff sheet of the hotel, on the website etc. These rates are always without any sorts of discounts, so they are kind of the maximum price is most situations. So they say, you could consider them 'the ideal price' from the management perspective. <br>
== Example of cost price per room ==
Of course the counterpart is the [[last-minute price]]. Of course there is much more price systems then just these two. If your hotels has a good idea on this, explain it in your decisions to your coach and make calculations. In your decisions other options don't exist. More on the pages [[prices]] and [[decisions]]. <br><br>
So, to an indication of the average cost price per occupied room would be: <br>
More info online on sites like:
€ 107.10 (check [[Revenue per room]]) - profit of € 23.97 = € 83.13 this gives an indication of average costs per occupied room at the time, you take over.<br> 
[http://traveltips.usatoday.com/rack-rate-hotels-107299.html Traveltips] or [http://mentalfloss.com/article/74828/why-are-hotel-rack-rates-so-exorbitantly-high Why are these rates so high?].  
Though, you will make additional costs. Let's say in a total of € 400,000 (in your [[Decisions]]) and, let's pretend you have the same occupancy rate, your average cost price per occupied room will go up with € 400,000 ./. 18,200 ([[occupancy rate]])= € 21.97 indication additional average costs. So the average cost price now would be € 21.97 + € 83.13 = € 105.10 per occupied room. Just to 'compensate' for these additional costs, and keep all the rest the same, and let's pretend the same occupancy rate, your sales prices must (on an average) go up with € 21.97 in this example.<br>
The average cost price gives you a basis on which to decide what [[Price|Sales price]] to sell for. <br>
 
== Sales price ==
If you make more costs, see the calculation above, you nee to 'cover for that' by:
* higher sales prices
* or more sales, so a higher [[occupancy rate]]
* or less costs on other cost types, which is hardly impossible to realise.
 
== Costs ==
In [[Costs]] you find see the three types of costs:
* Fixed costs, you do not have a grip on, calculated automatically
* Variable costs,. depending on your occupancy and calculated automatically
* Team decisions cost, totally up to you.


<br><hr>
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''→ GO! [[#top|Top of this page]]''
''→ GO! [[#top|Top of this page]]''
<center><small>''Emerald Forest Hotel'' offering an <font color="green">'''emerald''' </font color="green">hotel experience!
<center><small>''Emerald Forest Hotel'' offer an <font color="green">'''emerald''' </font color="green">hotel experience!
| Run your own hotel in this management simulation.</small></center>
| Run your own hotel in this management simulation.</small></center>

Latest revision as of 15:28, 10 September 2023

→ Go! Category:Hotel info

Cost price per room

Data on the occupancy rate of the rooms, as well as the variable and fixed costs per room are available on the history. So you could calculate the cost price per room (type) and per season. So, by doing so you also know what the minimum price has to be, to cover these costs.
In hotel industry a famous ratio to work with would be the Revenu per available room.

Example of cost price per room

So, to an indication of the average cost price per occupied room would be:
€ 107.10 (check Revenue per room) - profit of € 23.97 = € 83.13 this gives an indication of average costs per occupied room at the time, you take over.
Though, you will make additional costs. Let's say in a total of € 400,000 (in your Decisions) and, let's pretend you have the same occupancy rate, your average cost price per occupied room will go up with € 400,000 ./. 18,200 (occupancy rate)= € 21.97 indication additional average costs. So the average cost price now would be € 21.97 + € 83.13 = € 105.10 per occupied room. Just to 'compensate' for these additional costs, and keep all the rest the same, and let's pretend the same occupancy rate, your sales prices must (on an average) go up with € 21.97 in this example.
The average cost price gives you a basis on which to decide what Sales price to sell for.

Sales price

If you make more costs, see the calculation above, you nee to 'cover for that' by:

  • higher sales prices
  • or more sales, so a higher occupancy rate
  • or less costs on other cost types, which is hardly impossible to realise.

Costs

In Costs you find see the three types of costs:

  • Fixed costs, you do not have a grip on, calculated automatically
  • Variable costs,. depending on your occupancy and calculated automatically
  • Team decisions cost, totally up to you.


→ GO! Top of this page

Emerald Forest Hotel offer an emerald hotel experience! | Run your own hotel in this management simulation.
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