The pricing of meetings and event spaces in hotel revenue management

Abstract

In this paper, we discuss the pricing of Meetings and Event Spaces in Hotel Revenue Management. We use a measure called Attendee Density, for a Meeting and Event Space, which is similar to the measure of Occupancy for a hotel room. Based on the method for forecasting Occupancy for a hotel room, we forecast Attendee Density for an Event Space. The Attendee Density is the ratio of Attendees Booked to Capacity. To forecast Attendee Density, we have to forecast how many attendees will book in the future. To forecast how many attendees will book at a specific date in the future, we sum our current Reservations on Hand and a quantity called the Pickup. The Pickup is calculated based on a Booking Curve. The Booking Curve is a graph which plots Reservations on Hand against Time. It shows us how bookings happen leading upto a particular event. Once we calculate Pickup based on the Booking Curve, we can forecast how many attendees will book at a date in the future. We can then calculate Attendee Density. A high Attendee Density for the future results in charging a High Price today. On the other hand, a low future Attendee Density results in charging a Low Price currently. We also discuss how we can go about determining a High Price and a Low Price for a Meeting and Event Space.