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    Avari Ramada: Pricing Hotel Rooms

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    Pooja Singhi
    This document provides information about Avari Ramada hotel in Lahore, Pakistan. It discusses the hotel's history, features, occupancy rates, room pricing, marketing mix, current situation, and recommendations. Some key points are: - Avari Ramada is a 5-star hotel founded in 1944 and currently led by Byram Avari. It has 190 rooms and suites as well as food, beverage and spa facilities. - Occupancy and room rates have fallen below its competitor Pearl Continental Hotel. The assistant marketing manager wants to reevaluate pricing policies. - Recommendations include focusing on occupancy over rates, strengthening the brand, bundling offers, and boosting revenues from food, beverage and

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    © All Rights Reserved
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    Avari Ramada: Pricing Hotel Rooms

    Uploaded by

    Pooja Singhi
    385 views22 pages
    This document provides information about Avari Ramada hotel in Lahore, Pakistan. It discusses the hotel's history, features, occupancy rates, room pricing, marketing mix, current situation, and recommendations. Some key points are: - Avari Ramada is a 5-star hotel founded in 1944 and currently led by Byram Avari. It has 190 rooms and suites as well as food, beverage and spa facilities. - Occupancy and room rates have fallen below its competitor Pearl Continental Hotel. The assistant marketing manager wants to reevaluate pricing policies. - Recommendations include focusing on occupancy over rates, strengthening the brand, bundling offers, and boosting revenues from food, beverage and

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    Avrai Ramada

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    This document provides information about Avari Ramada hotel in Lahore, Pakistan. It discusses the hotel's history, features, occupancy rates, room pricing, marketing mix, current situation, and recommendations. Some key points are: - Avari Ramada is a 5-star hotel founded in 1944 and currently led by Byram Avari. It has 190 rooms and suites as well as food, beverage and spa facilities. - Occupancy and room rates have fallen below its competitor Pearl Continental Hotel. The assistant marketing manager wants to reevaluate pricing policies. - Recommendations include focusing on occupancy over rates, strengthening the brand, bundling offers, and boosting revenues from food, beverage and

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    385 views22 pages

    Avari Ramada: Pricing Hotel Rooms

    Uploaded by

    Pooja Singhi
    This document provides information about Avari Ramada hotel in Lahore, Pakistan. It discusses the hotel's history, features, occupancy rates, room pricing, marketing mix, current situation, and recommendations. Some key points are: - Avari Ramada is a 5-star hotel founded in 1944 and currently led by Byram Avari. It has 190 rooms and suites as well as food, beverage and spa facilities. - Occupancy and room rates have fallen below its competitor Pearl Continental Hotel. The assistant marketing manager wants to reevaluate pricing policies. - Recommendations include focusing on occupancy over rates, strengthening the brand, bundling offers, and boosting revenues from food, beverage and

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    The key takeaways are that Avari Ramada is a 5-star hotel in Lahore established in 1944, it has 190 rooms and suites along with food and beverage outlets and other amenities. It uses various pricing strategies like rack rate and preferential rates.

    Avari Ramada has 190 rooms including 15 suites and 12 junior suites. It has 5 food and beverage outlets along with a swimming pool and spa. It can accommodate various functions and events.

    Avari Ramada uses various pricing strategies like rack rate, commercial rate, preferential rate, EBS and group rate, VEBS rate and special rates tailored for different customer segments.

    AVARI RAMADA

    PRICING HOTEL ROOMS


    Group-6
    Praveen Kumar
    Parikshit Chaudhuri
    Srinath Sundar
    Ramkrishnan MA

    INTRODUCTION

    Avari Ramada is a five star hotel in Lahore

    1944 : Founded by Dinshaw Avari

    Byram Avari is the current CEO of Avari Lahore Hotel

    Branches in Pakistan, Dubai and Toronto

    1978 : Avari Lahore started under the patronage of Hilton chain


    of hotels

    1987 : After a lawsuit, Mr. Avari took over the management and
    renamed it as Avari Lahore Ramada Renaissance Hotel.

    FEATURES

    190 rooms including 15 suites

    12 junior suites

    Executive

    Bridal

    Presidential suites

    5 Food & Beverage outlets

    Coffee shop Kim's

    Snack bar - Samovar lounge,

    Barbecue restaurant- Fort Grill


    Pastry corner

    Swimming pool

    4 function rooms (Business conventions, large dinners, Social occasions like weddings)

    Other facilities included Sauna, Massage parlour, Gymnasium

    Executive Business Centre

    OCCUPANCY

    The above bar chart represents the month-wise occupancy in percentage at


    Pearl and Avari Ramada for the year 1988.

    AVERAGE ROOM TARIFF

    The above bar chart represents the month-wise average room tariff at Pearl and
    Avari Ramada for the year 1988.

    4P's MARKETING MIX


    Produc
    t

    Product- Different Types of Rooms and Suites,


    F&B outlets, Function Rooms, Spa
    Price- Rack Rate, Commercial Rate,
    Preferential Rate, EBS & Group Rate, VEBS
    Rate, Special Rates
    Place- Strategic Location, Metropolitan City,
    Tourist and Business Hub

    Price

    Marketing
    Mix

    Promotion- Summer Packages, Mailing


    Promotional Letters, Free bed tea and
    meals(EBS&VEBS)

    Promotio
    n

    Place

    CURRENT SITUATION

    Avari International took the control of Avari Ramada Renaissance


    since Oct1,1987 from Hilton Group of Hotels.

    Every year the target for the average room rate was increased by
    10%.

    Bonus of marketing employees was based on Target


    Achievement. So the Marketing team calculate the average room
    rate and occupancy on daily basis

    Room Rates at the Avari were increased twice a year( Jan& June)

    Avari was constantly trying to expand its guest base and


    emphasised on getting business accounts from Pearl.

    CONCERN

    Average Room Rate had fallen below its competitor Pearl


    Continental Hotel.

    Asst. Marketing Manager felt a need to revaluate the current


    pricing policy before the beginning of the New Year.

    SWOT ANALYSIS
    STRENGTHS

    PRICING STRATEGY
    PRICING STRATEGY
    INDIVIDUAL RATE

    RACK
    RATE

    S1806
    D1986

    COMMERCIA
    L RATE

    S1641
    D1821

    CONTRACT RATE

    GARBAGE RATE

    PREFERENT
    IAL RATE

    EBS &
    GROUP
    RATE

    VEBS
    RATE

    SPECIA
    L RATE

    GOV
    OFFICIALS
    RATE

    S - 1478
    D - 1658

    S - 1165
    D - 1345

    S - 1020
    D - 1200

    S- 993
    D- 1092
    (45% of
    RR)

    S - 903
    D - 993
    (50% of
    RR)

    WHOLESA
    LE RATE

    B/W EBS AND


    VEBS(BOTHS&D
    )

    JOURNALI
    -STS
    RATE
    S- 1444
    D- 1588
    (20% OF
    RR)

    AIRLIN
    E RATE

    S- 812
    D- 893
    (55% OF
    RR)

    IATA
    RATE

    S - 903
    D - 993
    (50% of
    RR)

    1. Ten percent hike in all room


    price
    Clientele

    Annual Occupancy Revenues under


    for each room
    each department

    Novemeber
    Occupancy

    November
    Revenue

    8%

    319200

    351120

    30%

    1197000

    1316700

    10% increase
    in November
    Revenue

    Frequent Individual Traveler (FIT)

    11%

    5654770

    Executive Business Service (EBS)

    30%

    15422100

    Volume Executive Business Service (VEBS)

    31%

    15936170

    Tour

    3%

    1542210

    5%

    199500

    219450

    Special

    9%

    4626630

    45%

    1795500

    1975050

    Summer Package

    3%

    1542210

    Conventions

    2%

    1028140

    Airline

    7%

    3598490

    10%

    399000

    438900

    Other2

    4%

    2%

    79800

    87780

    3990000

    4389000

    1000

    1100

    Annual Room Sales for the year 1988


    Average room rate

    2056280

    51407000

    2. Ten percent hike in all rates other


    than EBS and VEBS
    Annual
    Occupancy for
    each room

    Clientele

    Frequent Individual Traveler (FIT)

    11%

    5654770

    Executive Business Service (EBS)

    30%

    15422100

    Volume Executive Business Service (VEBS)

    November
    Revenue

    10% increase
    except EBS and
    VEBS

    8%

    319200

    351120

    30%

    1197000

    1197000

    Revenues under November


    each department Occupancy

    15936170

    31%

    Tour

    3%

    1542210

    5%

    199500

    219450

    Special

    9%

    4626630

    45%

    1795500

    1975050

    Summer Package

    3%

    1542210

    Conventions

    2%

    1028140

    Airline

    7%

    3598490

    10%

    399000

    438900

    Other2

    4%

    2056280

    2%

    79800

    87780

    51407000

    3990000

    4269300

    1000

    1070

    Annual Room Sales for the year 1988


    Average room rate

    3. Bridge the difference between the


    group rate and least expensive individual
    rate
    This can be done by either reducing the least expensive individual rate(impacts

    revenue and profitability) or increasing the group rate (which may cause customers
    to sign with the competitor, Pearl)

    So this option is not feasible

    Q1. Should Raza seek to increase the occupancy rate or


    Average room rate? What are the trade-offs ? What factors
    should he consider?

    Raza should focus on increasing the occupancy rate in the immediate future and not just increasing
    the occupancy alone but profitable occupancy.
    Trade-offs

    Increase in advertisement and promotion (long run)

    Training and Hiring Manpower

    Increasing guest amenities leading to expenditure

    Factors

    Demand and competition

    Brand Image

    Implementing Bundling Strategy

    Increasing Banquet Sales

    Q2. What other Metric could/ should Raza use to evaluate the performance of his pricing structure ? Why?

    Pricing strategy should be simplified not only by keeping client type but also room
    type. It should be segmented in the right manner as per our below recommendations
    for inviting more guests and increasing the occupancy.
    Recommendations

    They should classify the rooms as basic , deluxe and superior. The rooms should be
    charged according to their classification.

    Option of upgrading the room type by paying a little extra amount.

    Emphasis more on selling of function halls.

    Promoting Hotel Facilities to incoming guests so generate more revenue.

    Develop and promote more vacation packages during lean period.

    RECOMMENDATIONS

    Avari should focus in strengthening of its brand image in the


    customers mind.

    Avari Ramada should concentrate on the profit oriented approach


    by increasing the occupancy rate

    They can also introduce bundling strategy.

    The hotel should also concentrate to generate more revenues


    from the hotels F&B outlets, Spa, Gymnasium and Banquets.

    Create more promotional packages as the summer package to


    attract more tourists.

    SEGMENTATION

    Segment Marketing
    Business
    Walk Inn
    Tour Groups
    Others

    Local Marketing
    Local People (Marriage, Parties, Events)

    Individual Marketing
    Existing customers(Newsletters, leaflets, mailing list)

    TARGETING

    Corporates

    Airline Crews

    Targeting Local and Domestic Tourists during lean period.

    POSITIONING

    USP : Not turning away any potential guest(s)

    SERVICES CHARACTERISTICS
    Intangibility

    Hospitality

    Customer Relations

    Ambience

    Aroma

    Music

    Variability

    F&B order and Service

    Housekeeping and Laundry

    Inseparability

    Anticipating and exceeding customer expectations


    Perishability
    Rooms can get perished if not booked or unoccupied, moreover, in long term
    they may require structural changes.

    Thank You

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