Need to know what a hotel term means? Below is a list of key Hotel Revenue Management Terms you may encounter when it comes to hotel revenue management. We explain definitions of terminology industry jargon from hotel revenue management.
Terms being with the letter F below, rest to follow on further Blogs…
Forecast — What is the meaning/definition of Forecast in the hospitality industry?
Any hotel seeking to maximise profits, should look ahead and try to predict a future situation. One way to do this in an organised manner is to create something called a Forecast. Forecasting can be done at any time of year, by any kind of establishment in the hospitality sector (not only large hotels but also small, independent hotels) across the world.
The best way to Forecast future bookings and demand is to use a calculation – to ask a relatively simple question: ‘At our hotel, what is the likely expected revenue in 2019, based on our revenue management team’s analysis of figures from 2018 (occupancy and average rate)?’
A Forecast need not only be based on a whole year, of course. Sometimes it can be useful to create a month-to-month or even a week-to-week forecast! Forecasting is something that no hotel should ignore, as it can help to monitor and foresee trends in consumer behaviour and therefore accurately gauge the demand of each season.
FOC — What is the meaning/definition of FOC in the hospitality industry?
FOC stands for: Free of charge. It is often used in the travel industry to describe (additional) services for which the client does not have to pay for. An upgrade into a higher room category is often FOC another example could be free Wi-Fi in a hotel.
Flash Sales — What is the meaning/definition of Flash Sales in the hospitality industry?
Flash Sales are highly discounted and time-limited sale promotions. Hotels usually use this way of discounted sales to sell an unsold bedroom stock. Selling those ‘hot deals’ is an opportunity for under performing hotels to generate growth. Flash sales can be email campaigns to reach consumers who are usually not reached through existing distribution channels. Examples of the Flash Sales channels are: Travelzoo, Voyage Privé, Groupon, Travel Bird, Secret Escapes.
Feeder City — What is the meaning/definition of Feeder City in the hospitality industry?
The term Feeder City refers to cities of origin which feed travellers to hubs or gateway cities. Basically, it is to determine where does the tourism come from. Usually defined in international arrivals (overnight visitor) and/or in visitor spend (how much money do the visitors spend in the destination). Example: Top 5 Origin/Feeder Cities to London for the year 2018 are: New York, Amsterdam, Dublin, Frankfurt and Stockholm.
Fam Trip — What is the meaning/definition of FAM Trip in the hospitality industry?
The term FAM stands for Familiarisation. The Tours — commonly known as FAM Trips — are trips organised by travel providers (can be a Tour Operator, an Airline, a Hotel Chain, a Tourism Board or other DMOs representing a Destination, etc.) with the purpose of educating about their products & services and promoting them. Usually, it is dedicated to everyone who is involved in the selling and promoting process. It typically hosts travel agents and expedients, travel media (writers, journalists, bloggers) and other important players & partners.
Creating awareness and at the same time, networking and building relationships are the main aims of a FAM trip. FAM´s are very important in the hospitality industry. Basically, speaking if the travel agent knows and likes your property (and the location), he will book his clients into it. FAM´s are usually FOC (free of charge).
Fair Market Share — What is the meaning/definition of Fair Market Share in the hospitality industry?
Fair Market Share is an indication that a hotel’s overall performance stacks up against its immediate competitors. A hotel within a competitive set can work out if it’s getting its Fair Market Share through a simple calculation:
Fair Market Share = Total number of rooms at the hotel / Total number of rooms in the comp set
However large or small the comp set, a hotel trying to make itself more competitive can use a Fair Market Share tool to compare its individual percentage to their comp set. During peak times, a hotel can gather important info about the performance of the other hotels in their comp set. Then, using a Fair Market Share tool, it can discover how it compared to other hotels during those busy times. This can help when planning.