what is the defference between the revenue and the profit in the hotel buiness ?

Hi again, 
      I think ancillary revenue is the revenue hotels receive when guests spend money on room service, in-room movies, business centers, health clubs, phone service, shops and salons, restaurant outlets and other miscellaneous revenue centers.  Hotels track this revenue and forecast it in their budgets.  This revenue is tracked by dividing the revenue generated in the Hotel’s revenue centers by the number of rooms occupied in the Hotel during a given period.  Hotels divide the revenue amount by the number of guests in the Hotel. The resulting figure is called RevPAC or Revenue Per Available Customer.  Another management tool used by hotels is Revenue Per Available Room, (RevPAR). This is calculated by taking the total ancillary revenue and dividing by the number of occupied rooms.

A reoccurring issue between hotels and meeting sponsors is whether meeting sponsors should be contractually liable for potential losses to the Hotel for ancillary revenue when attrition or cancellation occurs.  Many hotels are now insisting that damages for ancillary revenue be included in contracts as additional compensation.

While revenue per available customer can be historically tracked with accuracy, it cannot be predicted with accuracy.  Herein lies the controversy.  While ancillary revenue is foreseeable and contemplated by the Hotel, the rationale and responsibility for the payment of these damages is not always foreseeable, contemplated, or agreeable to meeting sponsors. (The foreseeability requirement is met if responsibility for ancillary revenue is specifically included in the contract.

Of primary concern to meeting sponsors is whether they should be responsible for the eating, drinking, movie watching, etc. discretionary activities of their attendees outside of the planned Group functions. The outcome of this debate is subject to individual negotiations, however; I have never advised a meeting sponsor to guarantee to pay for their attendees’ unspent, discretionary spending. The reality is that most meeting sponsors can’t budget for this additional risk. Some associations and corporations would consider not planning meetings at all if they are required to be responsible for this additional expense. Both of these grim alternatives would hurt meeting sponsors and hotels alike if the net affect is less people attending meetings.

Best Regards….......

Hi Girl,
      where have you been?i have got some informative stuff which should be taken into your knowledge.
     
Revenue Management Definitions
Actual • Actual revenue results (occupancy and average rate.
included)

Ask For Rate • You sell this rate only after the caller asks for it.

Average Rate • Room Revenue ÷ Rooms Sold.

Average Length of Stay • Calculated average for all hotel guest stays.

Base • Fixed rate and contracted business such as government,
preferred corporate, consortia etc. This is generally lower
rated business a hotel would accept to help reach the goal
of 100% occupancy.

Blocking • Reserving a particular room type or room number for a
guest.

Close-Outs • You can completely close your hotel to accepting
reservations for any date (s)

Closed to Arrivals • (CTA) A restrictor that stops guests from arriving at your
hotel on a specified date.

Confidential Rate • You don’t tell the guest their rate. This usually involves
tour rates or special package rates.

Definite • Group room contract that has been signed or rooms are
guaranteed for arrival or until cut-off date.

Demand • The desire for a commodity together with the ability to
pay for it.

Denial • Rejected business.

Duration Controls • Restrictors such as: time constraints; no one night arrival;
or minimum length of stay.

Elasticity • a measure of sensitivity of demand for goods or services.
to changes in price or other marketing variables such as
advertising.

Fenced Rates • Fenced rates are a reservations department sales tool
which provides a series of options to the guest. Guests are
not forced to accept these restrictions but their rate is
determined by which (if any) fences they accept.
Examples of fenced rate options include nonrefundable
and non-cancelable reservations, advanced purchase
reservations, and staying over a weekend.

Forecast • Expected revenue results based on analysis, (occupancy
and average rate included).

Guarantees • You may require advance deposits, credit card deposits or
credit card guarantees.

GSI • Guest Satisfaction Index.

Incremental Revenue • Revenue above and beyond what was originally budgeted
Inventory • You can control what type of rooms and how many rooms
you make available to a particular market segment.

Caution: Travelers are smart and many will call both your
hotel and the CRS. If the traveler discovers that she can
get the room she wants from your hotel but not the CRS,
it damages your credibility.

IT Reservations • Individual traveler.

Lead Time To Book • The time difference between the reservation booking date
and the date of arrival.

Market Segment • Group of guests with similar traits and purchasing habits.
For example, corporate, seniors, government, etc
Minimum Length of Stay.

• (MLOS) A restrictor that allows you to accept
reservations only from guests staying a minimum number
of nights specified by you.

No Show • Guests who have guaranteed reservations, do not cancel
and do not arrive at the hotel on the reserved date of
arrival.

Occupancy % • Rooms Sold ÷ Rooms Available.

Overbooking • Practice in revenue management where more reservations
are taken than rooms available.

Pace • The speed at which rooms in a market segment are
reserved (pick-up).

Perishable Hotel Room • Can’t be put on the shelf and sold tomorrow.

Pick-up • Typically refers to group blocks. The number of
reservations that are made and deducted from the group
block.

Regrets • Reservation calls that do not result in a completed
reservation and are logged.

Revenue Management • The practice of maximizing profits from the sale of
perishable assets by controlling price and inventory and
improving service.

RevManager • Management position responsible for maximizing hotel
revenue and profits.

Revpar • Revenue per available room
• room revenue ÷ available rooms
• occupancy % x average rate ÷ 100.

R. O. I. • Return on Investment.

Room Revenue • Rooms sold x average rate.

Sell Directed Rate • The rate you sell first to the caller.

Sell Through • This restriction allows you to put an exception on dates
you have completely closed out. Any time you apply a
Close-out to a date, a Sell Through (if you have set one)
will automatically activate.

The Sell Through feature consists of 2 numbers. The first
is the number of rooms you want the CRS to sell through
the closed-out date and the second is the minimum
number of nights you will accept.
Example: If you set your Sell Through at 10/5, it means
that the CRS will sell 10 rooms through your close- out
date for guests staying a minimum of 5 nights.

Stay Pattern • The days (or pattern) that guests typically follow when
staying at a particular hotel. Usually varies by market
segment.

Supply • The amount of a commodity available at a given price
Tentative • Reservations that are not guaranteed, but holding space
until final decision is made.

Walk-in • Guest who arrives at the hotel desiring a room and does
not have a reservation.

Wash • Difference between group block and what we expect they
will actually pick up.

Yield Management • The practice of maximizing profits from the sale of
perishable assets by controlling price and inventory and
improving service.

Best Regards…........ 

that’s pretty interesting answer. very informative. thanks for posting that.

That’s a great list - thanks for posting!

In the hotel business there is not much difference between revenue and profit
A Revenue means the money that is being in generated in the hotel
Profit here measn that the revenues that is coming is more than revenue that has been lost