Executive summary of overbooking Essay Example

Executive summary of overbooking Essay Travelodge is the first budget hotel launched in 1985 in UK. It operates 380 hotels with 26,500 room in the UK. Travelodge is be aftering to turn 1000 more hotels by 2020. It employs above 5500 people and 87 % of the engagement are made online. The UK hotel market is estimated around 700,000 suites ( beginning: Melvyn Gold, Qualification of serviced adjustment supply in UK , December 2007 ) UK hotel market is segmented chiefly into four classs, Brander full service which has 14 % of the market portion, branded budget 12 % branded mid market 62 % and unbranded mugwumps 62 % .the current economic environment has seen addition in bead out of unbranded mugwumps and people prefer to book with branded budget due to web coverage, trade name strength strong balance sheet and distribution. We will write a custom essay sample on Executive summary of overbooking specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Executive summary of overbooking specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Executive summary of overbooking specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Grant Hearn, Travelodge CEO, commented: 2008 was another record twelvemonth of growing for the Travelodge trade name with over 19 % gross growing . Room sold increased by 9 per centum to 6 million The growing of Travelodge has been unbelievable but company faced a few challenges and one of the major challenge company is confronting is overbooking. Overbooking is one of the of import gross direction tool in hotels operation direction to run efficaciously and heighten profitableness. Gross Management is seen as an of import technique in the hotels operation and hence to maximise their grosss, hotels are progressively implementing Revenue Management patterns ( Hwang and Wen, 2009 ) . As a effect of implementing such systems, many companies in the service sector such as hotels consistently overbook capacity in order to maximise the gross at one peculiar point in clip ( Wangenheim and Bayon, 2007 ) . If overbooking is non implemented right it can ensue in loss of room gross, loss of hotel repute, decreased client trueness and lessening hotels profitableness. This study discusses the chief features of overbooking and its impact on the company in theoretical and practical prospective. Theoretical penetrations of overbooking One of the cardinal constructs in Revenue Management is overbooking. The pattern of overbooking can be defined as corroborating more reserves than the hotels available physical capacity to supply the service. ( Ivanov, 2006 ; Ivanov, 2007 ; Chiang et Al 2007 ; McGill, new wave Ryzin,1999 ; Kamath, Bhosale, Manjrekar,2008 ) . Hence, the aim of overbooking is to better the expected net income and alternatively of selling each room one time, net income can be increased by selling it several times ( Birkenheuer, 2009 ) . In fact, overbooking as an built-in portion of Revenue Management has received important attending from literature. From a historical position, overbooking is present in the surveies of Falkson ( 1969 ) , Simon ( 1968 ) , Vickrey ( 1972 ) and many others. The major aim of these surveies was to sketch a control pattern for cancellations. Nowadays, overbooking has become an emerging affair in industries with perishable merchandises. It yields considerable impacts on companies public presentation. In footings of the cordial reception industry, the profitableness of hotels is mostly dependent on their use of capacity. Conversely, demand for suites and extensions of stay are really unstable and are difficult to foretell ( new wave Ryzin, 2005 ) . Hoteliers are challenged by how to find the business of suites for clients who are financially unequal and meanwhile maintain a stable rate of demand given the difficult to foretell fortunes ( Okumus, 2004 ) . This is all possible utilizing overbooking, which enables proper allotment of resources and optimisation of gross revenues. However, maximising the figure of sold suites per dark can non be easy accomplished. One of the most ambitious undertakings of the hotel operation direction is to cover with the unpredictable nature of the clients, because non all booked reserves will turn into existent service ingestion ( Lai et al, 2005 ) . To this terminal overbooking may imply a company from the cordial reception industry non being able to function all its clients decently because of lower figure of ab initio expected people that do non look as agreed. In this regard, overbooking may hold both positive and negative impact. On the one manus, it may ensue in refusal to supply a service, but on the other, it can besides take the signifier of compensation for those booking agents, who can non have the value bundle they have agreed on and paid for ( Kimes and Wagner, 2001 ) . From their practical experience directors know that all non engagements confirmed for a peculiar day of the month will be truly used ( Ivanov, 2006 ) . There are several possible scenarios that can do this. Despite of their reserves, because of different fortunes some invitees cancel their stay and end their reserves, some does non call off their engagement but fail to demo up, or other invitees cut down their stay and as a consequence the room remains unsold and therefore capacity non use is lost everlastingly ( Ivanov, 2006, Talluri et Al, 2004 ; Chiang et Al, 2007 ; Hung, 2004 ; Bitran ; Leon, 1989 ) . Therefore hotels adopt overbooking in order to protect against losingss with no-shows and to countervail the consequence of cancellations and shortened corsets ( Hwang and Wen, 2009 ; Kamath et Al, 2008 ; Selmi, 2008 ; Chiang et Al 2007 ; Hung, 2004 ; Sulistio, Kim, and Buyya, 2008 ) . Impacts of overbooking on hotels operation direction Apart from the chance of the hotel to minimise the consequence of reserve uncertainnesss there are possibilities the figure of cancellations and no shows to be less so the figure of overbookings, so some of the clients will non be accommodated and should be walked to other hotels ( Ivanov, 2006 ) . Therefore, if a hotel decides to use overbooking in its operations it should pull off carefully non merely the chance cost of the unsold room but besides the overbooking costs for alternate hotel adjustment and transit that the hotel has to pay in order to counterbalance a client in instance of overbooking ( Ivanov, 2006 ; Hung, 2004 ) . Besides the apparent fiscal costs happening in instance of walking a invitee holding already booked, costs the lost hotel s good will and repute and the hazards of dissatisfaction, loss of trust, loss of future client trueness are much more expensive for the hotel ( Selmi, 2007 ) . Overbooking policy and control Harmonizing to Selmi ( 2007 ) , the hazard of client refusal appears if the overbooking is no accomplished exactly . In this respect, Kimes ( 1989 ) emphasized on the importance of a clearly stated overbooking policy within the hotel operation direction. The aim of overbooking policy and control is to happen an optimum overbooking degree to maximise the expected gross and to minimise the possible hazard of denied service ( Chiang et al 2007 ) . Netessine and Shumsky ( 2002 ) as cited by Ivanov ( 2006 ; 2007 ) proposed a basic mathematical theoretical account for ciphering the optimum figure of overbookings and harmonizing to his findings the optimum overbooking degree is reciprocally related to the sum of cancellation charges applied the closer the cancellation charge to the room rate, the lower the lost benefit from the unoccupied room and the less stimuli to overbook . In instance of presence of guaranteed and non-guaranteed engagements, Ivanov ( 2007 ) suggests that the optimum figure of overbookings has to be set individually for each type. Alternatively, harmonizing to Hung ( 2004 ) factors that could be considered while puting overbooking bounds include: chances of cancellation and no-show ; room demand distribution over clip and conditions of length of stay ; stay extension chances influenced by the intended length of stay. Furthermore Hung ( 2004 ) assumes that the proportion of cancellations depends on the client class, intended length of stay, twenty-four hours of hebdomad of first stay over, and clip until first stay over. Impact of overbooking on client behaviour Harmonizing to Talluri et Al ( 2004 ) overbooking is often cited in client ailments and remains the primary beginning of dissatisfaction. Furthermore, consequences of an experiment made by Wangenheim and Bayon ( 2007 ) confirm that the pattern of overbooking is likely to be perceived as unjust by service clients. Wangenheim and Bayon ( 2007 ) analyze behavioural effects of the equity towards overbooking by suggesting and corroborating several hypotheses. Harmonizing to their research the negative effects of service failure originating from overbooking are stronger for the high position client than for the low position clients and hence, hotelkeepers have to carefully overbook its high-values categories . Additionally, Wangenheim and Bayon ( 2007 ) stress on the importance that if a hotel ignores the log-run behaviour effects of overbooking, this may take to negative effects on its operations. One such negative effect is proposed to be a client who faces a denied service due to overbooking and still remains hotels client because of either high fixed exchanging barriers or current trueness rank plans. However, in response to the service failure the client may set its investing into the exchange relationship non merely by diminishing the figure of gross revenues, but besides by seeking to take advantage of price reduction offers or buying lower degree services from the hotel ( Wangenheim and Bayon, 2007 ) . On the other manus, Hwang and Wen ( 2009 ) analyze the consequence of the sensed equity toward hotels overbooking and compensation patterns by analyzing clients reactions toward hotel overbooking. Some of their most critical findings from this survey are that adult females are more likely than work forces to experience that overbooking is unjust , clients perceptual experiences to the equity of overbooking is non affected by other client variables including length of stay, rank position, remunerator beginning, reserve channel, and reserve clip ; participants perceived equity toward the hotel s overbooking and compensation policies were strongly correlated with positive viva-voce promotion. One of the most of import consequences of the research shows that the sensed equity of the participants toward the hotel s compensation policy is related to their trueness. Therefore, Hwang and Wen ( 2009 ) propose that hotels should see planing compensations that help positively influence cli ents perceived fairness toward overbooking and that encourage clients on-going backing and trueness. In a decision, issues like finding the optimum figure of extra reserves, minimising compensation cost, and covering with the negative effects from clients confronting a denied service are considered as the most ambitious countries of the pattern of overbooking and every hotel endeavoring to maximise its profitableness should non undervalue them ( Sulistio, Kim, and Buyya, 2008 ) . Practical Deductions of overbooking As the cordial reception industry is germinating, hotel proprietors and hotel directors are invariably seeking to update their attacks in order to accomplish optimum allotment of resources. Novelli, Schmitz and Spencer ( 2006 ) have discovered that hotelkeepers make every attempt to use modern-day engineerings in their concern. By this deduction, hotel directors and proprietors do non merely prolong competitory advantage, but besides create new merchandises and services. In position of this, it can be concluded that execution of new engineerings that create new merchandises is a technological invention ( Evangelista, 1999 ) . On the other manus, the execution of advanced engineerings to a service company can hold a important influence in footings of operational efficiency ( Freeman and Soete, 1997 ) . Additionally, Porter ( 1990 ) supports the latter thesis by foregrounding that the public presentation of a company is extremely dependent on new engineerings. In position of technological inventions today many hotels recognize the importance of overbooking pattern and therefore its execution has become by and large recognized measure toward hotels successful operations. The practical application of Revenue Management and Overbooking incorporates the undermentioned built-in elements ( Vinod, 2004 ) : Figure 1 Revenue Management application Degree centigrades: UsersamadDesktopCapture.JPG Beginning: Vinod, B. ( 2004 ) , Journal of Revenue A ; Pricing Management Market cleavage: Segmenting clients harmonizing to their penchants and disbursement forms is a must to do certain the most appropriate clients with absolutely fitted properties are sold the proper suites that can maximise grosss ( Oliveira, 2003 ) . Specifying rate categories ( stock list pooling ) : Involves making groups of the bing rates that close in footings of value ( Vinod, 2004 ) . Demand prediction: demand prediction is indispensable to find room tenancy. In the context of Revenue Management it is of import as it can command tenancy utilizing the information of length of stay. This can be achieved by possessing informations on rate category demand and continuance of stay ( Vinod, 2004 ) . Supply prediction: earlier and late check-out procedures can besides find room tenancy, which is an component besides involved in Revenue Management. Overbooking control: encompasses gross revenues of suites transcending the maximal available figure of suites to countervail for no shows and cancellations. However, there are some hazards associated with overbooking as it may ensue in grudges from unsated clients who have received an inappropriate room. In such instances hotelkeepers offer compensations and periphery benefits ( Smith, 1982 ) . Harmonizing to Vinod ( 1992 ) Revenue Management can convey 20 % of the entire grosss. Revenue mix control and exclusion processing: involves be aftering of import hereafter day of the months with discretion and fiting them with overbooking degrees ( Vinod, 2004 ) . Performance measuring and direction coverage: closely size uping the Revenue Management processes is indispensable to track down the information quality and future be aftering footing. However, in order to take a hotel into a victorious way, overbooking has to be managed and controlled really carefully. Ivanov ( 2006 ) defines the direction of overbooking as a set of managerial techniques and activities connected with uninterrupted planning, reserve and control and he outlined two chief groups of activities that should be performed in the day-to-day hotel operation. The hotel directors should on one manus, to specify an optimum figure of overbookings for each day of the month and continuously to modify it harmonizing to the market alterations of the hotel and the specific demand and booking spiels and on the other manus, to pull off carefully determinations and operational activities related with walking invitees with overbookings. In this respect, Ivanov ( 2006 ) proposes that factors such as length of stay, suites rates and client position have to be considered by hotel directors while covering with walking a invitee with confirmed reserve. Additionally, Kimes ( 1989 ) analyzes several managerial concerns indispensable for an effectual overbooking pattern and states that top direction can non presume tha t Revenue Management will merely go on, it requires careful planning and preparation . Therefore employees have to be intensively trained in order to clearly understand the purpose and features of overbooking. Furthermore, employees who are straight covering with overbooking determinations have to be sporadically trained how to act in possible client struggles and to take their ain determinations in an unfamiliar state of affairs ( Ivanov, 2006 ) . In order to be minimized the possible client dissatisfaction in instance of overbooking, it is critical for the hotel to set up service recovery programmes with standardised processs and to do employees to be cognizant and follow them ( Ivanov, 2006 ) For a profitable applied overbooking in the cordial reception industry, hotels must understand non merely consumers behaviour but besides to see the impact of competition and the presently economic state of affairs that imposes important supply and demand fluctuations. As hotels compete with each other in order to pull more clients, Revenue Management determinations of one hotel necessarily act upon the demand for other hotels in the same part or country. However, recent tendencies propose that hotels should join forces with is rivals that consequence in increased figure of formed confederations with each other to maximise their gross ( Chiang et al, 2007 ) Revenue Management s challenges in the cordial reception industry As explained before, Revenue Management finds application to two important industries: cordial reception and air hose. The first one, nevertheless, is much more complex in footings of industry impregnation and suites direction. This creates hurdlings for the optimu m operation of Revenue Management techniques. In the hotel industry Revenue Management can be applied either locally or via centralised system. The 2nd one involves garnering informations and taking determinations from a focal site for other belongingss. In pattern merely a limited figure of hotels and hotel ironss are able to pull off centralized informations processing and hence the bulk of participants on the cordial reception industry opt for belongings based Revenue Management. Recommendations for future research Despite of the acknowledged importance of overbooking as one the most effectual successful Revenue Management techniques used in hotel operation and widely discussed subject in research literature, there are no current surveies discoursing the overbooking direction of Bulgarian hotels and its impact on their operation. Therefore, future research may concentrate on the possible application of Revenue Management techniques to the Bulgarian cordial reception industry. Future surveies may besides concentrate on the demand side of Bulgarian touristry as the state has witnessed fluctuating visitant rates during the past two decennaries despite the turning net incomes generated by the peculiar industry. Decisions In order to last in the ferocious competition and to bring forth more gross while utilizing the same sum of resorts it is necessary and critical to the hotels operation direction to utilize efficaciously its reserve stock list and to increase its tenancy rate ( Hung, 2004 ) . Revenue Management techniques and the theoretical accounts of overbooking if applied suitably would maximise the grosss of hotels ( Kamath et al, 2008 ) . However, the possibilities of client dissatisfaction, and hazard of loss of repute because of denied service, force many hotels to avoid the pattern of overbooking. Therefore, before hotel directors to deicide whether or non to implement overbooking they should first see what Birkenheuer ( 2009 ) explained the best appraisal of hazard and chance will supply the best net income . In this survey we have outlined the dynamic nature of service industries and have demonstrated the importance of Revenue Management and most notably one of its most important facets overbooking. We have narrowed the range of this research down to the cordial reception industry and have found major differences in the demand patterns towards such companies in the former industry. Some clients prefer flexible cancellation footings, while others are non much attentive to that. Hoteliers offer differential pricing to their ain advantage to fudge against fluctuating demand. We have besides found that permutation is one of the most effectual method of pull offing overbooking patterns, but yet a cost/benefit analysis must be performed in order to track down the existent effects. Basically, within the current dynamic determination doing state of affairs in the cordial reception industry, overbooking degrees have been found to hold important gross maximising belongingss. In position of this, through this survey we have discovered some of the main direction aims that could be achieved through overbooking in the model of Revenue Management: net income maximization ; capa city allotment ; maximization of mean gross per client ; maximization of net present value ; and minimisation of client grudges. Finally, as cordial reception industry on a planetary graduated table is a aggregate volume-driven concern, overbooking has become an emerging subject as vacant suites do non convey any net incomes. However, possibly even more important remains the job how to pull off client letdown, in instances they can non be relocated to similar hotels as a consequence of overbooking.

Independent and Dependent Variable Examples

Independent and Dependent Variable Examples The independent variable and dependent variable are examined in an experiment using the scientific method, so its important to know what they are and how to use them. Here are the definitions for independent and dependent variables, examples of each variable, and the explanation for how to graph them. Independent Variable The independent variable is the condition that you change in an experiment. It is the variable you control. It is called independent because its value does not depend on and is not affected by the state of any other variable in the experiment. Sometimes you may hear this variable called the controlled variable because it is the one that is changed. Do not confuse it with a control variable, which is a variable that is purposely held constant so that it cant affect the outcome of the experiment. Dependent Variable The dependent variable is the condition that you measure in an experiment. You are assessing how it responds to a change in the independent variable, so you can think of it as depending on the independent variable. Sometimes the dependent variable is called the responding variable. Independent and Dependent Variable Examples In a study to determine whether how long a student sleeps affects test scores, the independent variable is the length of time spent sleeping while the dependent variable is the test score.You want to compare brands of paper towels, to see which holds the most liquid. The independent variable in your experiment would be the brand of paper towel. The dependent variable would be the amount of liquid absorbed by a paper towel.In an experiment to determine how far people can see into the infrared part of the spectrum, the wavelength of light is the independent variable and whether the light is observed (the response) is the dependent variable.If you want to know whether caffeine affects your appetite, the presence/absence of the amount of caffeine would be the independent variable. How hungry you are would be the dependent variable.You want to determine whether a chemical is essential for rat nutrition, so you design an experiment. The presence/absence of the chemical is the independent v ariable. The health of the rat (whether it lives and can reproduce) is the dependent variable. If you determine the substance is necessary for proper nutrition, a follow-up experiment would be to determine how much of the chemical is needed. Here, the amount of chemical would be the independent variable and the rat health would be the dependent variable. How to Tell the Independent and Dependent Variable Apart If you are having a hard time identifying which variable is the independent variable and which is the dependent variable, remember the dependent variable is the one affected by a change in the independent variable. If you write out the variables in a sentence that shows cause and effect, the independent variable causes the effect on the dependent variable. If you have the variables in the wrong order, the sentence wont make sense. Independent variable causes an effect on the dependent variable. Example: How long you sleep (independent variable) affects your test score (dependent variable). This makes sense, but: Example: Your test score affects how long you sleep. This doesnt really make sense (unless you cant sleep because you are worried you failed a test, but that would be a whole other experiment). How to Plot Variables on a Graph There is a standard method for graphing the independent and dependent variable. The x-axis is the independent variable, while the y-axis is the dependent variable. You can use the DRY MIX acronym to help remember how to graph variables: DRY MIX DÂ   dependent variableRÂ   responding variableYÂ   graph on the vertical or y-axis MÂ   manipulated variableIÂ   independent variableXÂ   graph on the horizontal or x-axis Test your understanding with the scientific method quiz.

Analysis for the 7Cs Framework Assignment Example | Topics and Well Written Essays - 2000 words

Analysis for the 7Cs Framework - Assignment Example With the information provided on the website, it is easy for a potential customer to book a room because the site is enough to keep the visitors updated. All the content available on the website has been developed by the company in an effort to ensure that users of the website are well-informed (164). Community  The Le Meridien website presents a strong community because it promotes interactions between different customers. The website has a page that allows guests or visitors to share their experiences with other visitors. The page is highly interactive because new visitors can post questions to the authors of the current reviews concerning their experience at the hotel. The page serves to create a highly connected community that allows all the users to interact. The page is under the close monitoring by the site owner. Notably, this aspect is a remarkable feature of the Le Meridien website (169).Customization  A close analysis of the Le Meridien reveals that it is generic becau se all visitors to the website see the same phase of the website. The fact that the site is information dominant, it does not present an opportunity for personalization or tailoring by the site owner. All the functions and windows in the website are permanent and are the same for each viewer. Therefore, there is a salient need for the company to introduce a measure of customization so that visitors may experience a measure of freedom and exercise their self-expression (173). The communication between the users and the site owner.