Leisure targetgroup
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Size of the targetgroup
There is a kind of over-capacity in the market which makes it hard to reach occupancy rates above 60%. But for any individual hotel there is enough demand in both markets to get the hotel well-occupied.
Sales prices
Revenues consist of the average (sales) prices times the number of bookings (occupancy rate). A maximum occupancy rate would mean that all 100 rooms are occupied during all of the weeks, so 52 weeks x 100 rooms. Also check the page for information on the business targetgroup which will mainly be the guests for the weekdays.
Prices in the weekend (especially interesting for leisure guests) in the past ranged from € 80 last-minute price to € 100rack rate per room per night. So this gives you an indication.
The weekend bookings make up 43% of the total of booked rooms when you take over the management, and as you take over the revenues from the these are € 704.340 mainly booked by leisure guests.
You start off with a price-range of €80 to €100 for the weekends, so an average € 90 per room per night in the weekend. So € 704.340 divided by € 90 means 7.826 room-nights sold. As you take over in year 0 there is ten hotels, so all together the demand for weekend rooms was 10 x 7.826 = 78.260. After all of your decisions and the decisions of your competitors this demand will never be the same in the years when you run the hotel. It depends on many of your decisions.
Maximum weekend days
The maximum number of hotel nights to be sold in the weekends would be:
52 weeks x 100 rooms x 43% x 7 days = 15.652 nights/days (note: number of nights per year in calculations is 52 weeks * 7 nights = 364).
At the average room price (€ 90)that would generate a maximum revenue from selling rooms at this price of € 1.408.680.
The revenue from renting the rooms in the weekend in year 0 is € 704.340. So € 704.340 ./. € 1.408.680 = 50% of the possible revenues at the prices you start off with.
This gives an indication of the maximum growth. Of course, things change if you have a higher occupancy rate AND a higher sales price.
So making additional costs (next to the fixed ones and the variable ones you can't avoid) this calculated maximum on the market gives you an indication of what you could make from extra costs which could still be earned back. Or, even better, lead to more profit.
Type of customers
There is no specific information on the type of leisure customers: we do know they mainly book in the weekends. The hotel has always primarily aimed for the business guests and secondly for the leisure guest. The type of customers attracted so far are an average of the leisure guest. Not a lot of families with children (probably due to the location in the city) and, an average room occupancy of 1,7 per room, still a large group of people who travel alone.
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