Marriott Rooms Case

Hamilton Hotel Forecasting Report

January 30th, 2012

External Consultants:

Meagan Anderson

Shannon Carnes

Loryn Collins

Hannah Schauer

Descriptive Material

The main goal of any hotel is to operate at maximum capacity every night. Like an airline seat, the inventory of a hotel is comprised of rooms (both suites and conference rooms), and once that room goes empty, the potential profit for it is lost and never recouped (perishability). The occupancy of rooms in a hotel falls upon the shoulders of the reservation manager and their team; this is a team that constantly faces the tradeoff between cancellations and missed opportunity versus overbooking.

Like any hotel, the occupancy targets at The Hamilton Hotel never go down and the reservation manager, Linda, is continuously comparing forecasts of performance against these targets. Preparing the week ahead forecast is the most important task Linda faces, as almost every department in the hotel will use the data for staffing, cost planning, etc. While Linda was making the forecast for the upcoming week, she received a request for 60+ rooms when the hotel was already booked at only 38 under capacity. Linda now faces the problem of whether to book the 60 rooms for the tour company and take the chance that the hotel will be overbooked and people will be turned away, or lose the potential revenue that the tour company could bring.

We have examined the numbers as well as taken into account the potential ramifications of each decision (both financial and customer relationships) and we have decided to recommend that the Hamilton hotel should accept the booking of all 60 rooms that were requested. Following is our supporting calculations and materials.

Problem Analysis

In this case, we have recognized problems that should be addressed. We have developed the following research questions to lead our analysis:

1. How can managers avoid perishability?

2. How can managers minimize room...