Dear Customers,

For system administrators of the past, a vital part of their training was related to maintaining and servicing servers. This would include keeping track of the servers’ performance, server room temperature and humidity, and physical environment cleanliness etc. While servers were still manageable and relatively easy to store, albeit gigantic in most cases, it took up lots of resources, money, and specialist technical personnel.


We have now crossed a threshold. Today, those servers that small medium businesses and organizations need to run their daily operations can be removed from their fixed assets list. IT departments across all industries and sectors have become ‘dematerialized’, that is, fewer and fewer exist in tangible, physical form anymore. Instead, they are being utilized remotely and communication and data transfer being done through the virtual world. That is the change known as Cloud Computing.


We are on track in deploying our award winning next generation software, momentohs® sprint onto Cloud by year end 2010. We have selected Windows Azure platform. Windows Azure offers a blanket Cloud that is easily implemented, covering operation systems as an online service, fully relational Cloud database solutions and a sturdy platform that connects Cloud services and on-premises applications. Windows Azure is designed to support scalable software from any independent software vendor (ISV) and momentohs® is no different from that, fitting in nicely to complete that handshake. This perfectly complements the other technology areas of Microsoft that momentohs® is utilizing, such as Windows Server, the .NET framework and also SQL Server, to name a few.


Away from Microsoft Azure, what Cloud Computing is towards end users for the hospitality industry is the freedom to be care free and not be entangled in their own physical network infrastructure, thus avoiding capital expenditure (CapEx) on hardware and services. They are not tied down and chained to maintaining this value depreciating hardware. When such hardware is being utilized and shared among multiple users, they do not become so 'intangible and perishable' any more, while improving utilization rates, as servers are now rarely left idle. It's something that is very scalable, more secure and more reliable than most applications. To blanket it all, there's also an extra benefit, which is updates, all taken care of so you can sleep soundly knowing that your software and application gets the latest updates, security patches and performance enhancements automatically.


While cloud platforms may be viewed as a luxurious and exotic option for most organizations, it cannot be denied that we are moving in this direction. A direction where virtually all applications will be Cloud based and the Cloud platform that they are running on will play an increasingly important role in the software world. They present the most promising opportunity to make our operations and businesses smarter. We realized that and are making that change. Join us to make the future happen now!


Users pursuing or considering new software or upgrading current deployments should question their vendors closely about their SaaS/cloud plans. They should then compare those plans carefully with their own business needs and goals.
 

Mehboob Hamza
(mehboob@sscomp.ae)

 

 

By Dr. Gabor Forgacs

 


Dynamic pricing means that a hotel will change its room rates daily or even within a day if up-to-the-minute market information reveals the need for adjustments. It is based on the recognition that the right rate to charge for a room night is what the customer is able and willing to pay. By under pricing, the revenue manager leaves money on table; by overpricing, the hotel may price itself out of the market. Those who practice dynamic pricing believe that the hotel has to continually adjust rates in response to ever changing supply/demand conditions. The constant challenge, of course, is trying to determine the optimal price on a given day or afternoon.


A very popular pricing principle that applies dynamic pricing is called demand-based pricing. In low-demand periods, lower rates are offered. As demand increases, lower rate categories are closed and higher rates are quoted. Demand-based pricing as a principle is not new. Its prevalent use today has been made possible by high-speed connectivity, broadband integrated networks, and lightning-speed data processing. Revenue managers can keep their fingers on the pulse of the market, since a lot of information can now be accessed in real time. Room rate adjustments can be implemented at the click of the mouse, and updated rates can be posted across multiple distribution channels with ease.


An example will help to demonstrate the difference between dynamic, demand based pricing and static pricing. Assume, for example, that on a given day, the 300-room Astoria Hotel sells 250 rooms. In scenario A, the hotel has two-tiered pricing with a group rate of $90 and a transient rate of $130. In scenario B, the hotel has multi-tiered pricing: a low-demand rate of $90 and other rates of $110, $130, and $150, offered at increasing occupancy levels. Both scenarios sell the same number of total rooms, with sales at each rate broken down as follows:

 

Scenario A

Group Rate

$90

Transient Rate $130 

Total

Rooms sold

150

100

250

Revenue

$13,500

$13,000

$26,500

 

Scenario B

$90 

$110 

$130 

$150 

Total

Rooms sold

80

60

60

50

250

Revenue

$7,200

$6,600

$7,800

$7,500

$29,100

 

 

In comparing scenarios A and B, note that B produced $2,600 more in revenue, an ADR increase of $10.40, and a RevPAR increase of $8.67. In scenario B, the revenue manager closed the $90 rate after 80 rooms were booked and set the rate $110. After 60 more rooms were booked, this rate was closed and the next 60 rooms were booked for $130. When the next 60 units were booked and hotel had 200 rooms booked, a rate of $150 was offered for the last 50 bookings. This approach increased room revenue, ADR, and RevPar by 9.8 percent without selling more units.


Dynamic pricing does not adjust room rates only upward or only downward. Price changes can go either way. Assume a revenue manager has forecasted 75 percent occupancy for the day, but she opens the day looking at only 65 percent ROB (rooms on the book) with a $160 BAR. She wonders if that missing 10 percent occupancy can be realized from walk-ins and same-day bookers. By early afternoon, there is no demonstrated new demand out there at the posted rate. At 2 P.M. she decides to intervene. She lowers the BAR to $139. The phone lines start buzzing. By 6 P.M., the hotel has picked up enough same-day bookings to expect 80 percent occupancy. By shopping her comp set, she learns that some of the other hotels are starting to sell out of certain room types. The revenue manager at this point decides to change tactics. At 6:15 P.M., she closes down the discounted rate and posts a new rate for walk-ins of $170. Such is dynamic pricing at work.


How dynamic must one become to be dynamic enough? There are no simple answers. The above example raises many questions. Would the originally forecasted occupancy have been achieved without dynamic pricing, just by staying the course with the starting BAR of $160? Did the hotel encounter price resistance or resentment from guests who had booked their room at the higher rates?


There are arguments for and against frequent price changes. A revenue manager will weigh the notion of consistency and price integrity against possible revenue gains through frequent tweaking. There is also the issue of “who’s in charge?” Should revenue managers stress consistency or should they go with the flow and let the perceived market forces dictate pricing levels? Are a hotel’s service quality, location, brand name, and amenities worth suddenly much less or much more just because market demand shifted one afternoon?


There are dangers in approaching rate controls with a narrow perspective that focuses on one key variable only—usually occupancy. If a hotel reacts to surpassing 80 percent occupancy by closing out its government rate while not forecasting to fill, that decision can be questionable. If, for example, a government-related event takes place in the region and the hotel stops honoring that rate, revenue opportunities will not be maximized. If demand came mostly from that particular segment, competitors that keep their government rate open may pick up the rejected volume. The point is to be selective in closing rate categories. Look beyond the volume of demand to see segment dynamics as well before applying rate controls.


Should a given hotel compete on price? That is a strategic decision. If a revenue manager makes a considered decision to use pricing as a competitive weapon, dynamic rate management can become one of the most effective tools in the battle for price-sensitive customers.
 

Dr. Gabor Forgacs is an Assistant Director at Ted Rogers School of Management in the Faculty of Hospitality & Tourism Management, Ryerson University with more than 20 years experience in the hospitality industry including holding top management positions. His areas of expertise are Revenue Management, Hotel Branding, Lodging Operations Management, Hotel Facilities Management and Cross-disciplinary Course Development.
 

 

Jules’ Undersea Lodge, named after the author of the famed maritime tale 20,000 Leagues Under the Sea, is the world’s first underwater hotel. Originally built in the early 1970s as a groundbreaking research lab off the coast of Puerto Rico, the Lodge has been in business in Key Largo, Florida since relocating there and opening its hatch to the public in 1986. Truly an innovative concept, Jules’ Undersea Lodge claimed status as the world’s only underwater lodging available to the public until recent years when ecotourism has become all the rage. Many celebrities have enjoyed a stay including Steve Tyler of Aerosmith and former Canadian Prime Minister, Pierre Trudeau.

 

Jules’ Undersea Lodge.

 

The exploit of the maritime area for the hospitality scene has churn out quite a number of luxurious hotels and resorts since then. This includes the Poseidon Undersea Resort in Fiji, a $500 million complex built off Fiji, a 7-storey underwater hotel in Istanbul which will also be a 7 star hotel and last but not least, Dubai’s entry in the form of Hydropolis Underway Hotel, another fabulously modern architecture that Dubai is anonymous with.

 

The upper storey’s of the Hydropolis land station house a variety of facilities, including a cosmetic

surgery clinic, a marine biological research laboratory and conference facilities.

 

 

Hiring or retaining valuable staff makes up for roughly 10% of the ‘IT Management Challenges’ in the industry. There are many ways where one can reward deserving employees. In the hotel industry, besides having good opportunities for career advancement and also an attractive remuneration package, employees are given allowances for official checks including entertainment. Depending on the job designation, the allowance may vary from a reasonable entry level amount to unlimited.

 


For the Front Office Module, under the Admin Tools tab, the monthly allowance and entertainment for each and every employee can be easily set. In case the employee holds a high management position, a simple tick can be enabled to allow the employee to have unlimited allowance. Since momentohs® is a truly integrated HMS encompassing 12 modules, if an employee wishes to utilize his/her official checks (OC) or entertainment allowance (ENT), the utilized amount will be directly posted to his/her account and the figures will show how much allowance the said employee has utilized. This is just one of the many 100’s of functions that make momentohs® tick.

 

 

 

Syed Irfanuddin Quadri
Business Solution Services
E mail : siquadri@sscomp.ae
Direct : +971 4 308 3645
Mobile : +971 50 7187292