mgm grand revenue management

NATIONAL COUNCIL FOR HOTEL MANAGEMENT AND CATERING TECHNOLOGY

An Assignment titled “REVENUE MANAGEMENT FOR MGM GRAND”

under Revenue Management (MHA-05) is submitted to the NCHM-IIH,

Noida, in partial fulfilment of the course requirement of the second semester

of M.Sc. in Hospitality Administration program.

Submitted by:

Name: - Mohit Kumar Rai

NCHM/University Roll No:- 159042912

Date of submission: - 12th February 2016

Under the guidance of:

Mr. Abhinav Mishra

I.I.H., Sector 62, Noida

(Under Ministry of Tourism)

(Govt. of India)

2 | P a g e R E V E N U E M A N A G E M E N T A T M G M G R A N D

MGM WORLD


The MGM Grand Las Vegas is a hotel casino located on the Las Vegas Strip in Paradise, Nevada.

The MGM Grand is the third largest hotel in the world by number of rooms and the largest hotel

resort complex in the United States, ahead of The Venetian. When it opened in 1993, the MGM

Grand was the largest hotel in the world.

Owned and operated by MGM Resorts International, the 30-floor main building is 293 ft (89 m) high.

The property includes five outdoor pools, rivers, and waterfalls that cover 6.6 acres (2.7 ha),[1] a

380,000 sq ft (35,000 m2) convention center, the MGM Grand Garden Arena, and the Grand Spa. It

also houses numerous shops, night clubs, restaurants and the largest casino in Clark County, which

occupies 171,500 sq ft.

The Marina Hotel and Casino, located at 3805 Las Vegas Boulevard, opened in 1975 as a 714-room

hotel and casino. In 1989, Kirk Kerkorian bought the Marina Hotel and the Tropicana Country Club to

obtain the site that would become the home of the MGM Grand. During that time, the Marina was

known as the MGM-Marina Hotel.

https://en.wikipedia.org/wiki/MGM_Grand_Las_Vegas#cite_note-1


OUR VISION

MGM Resorts International is the recognized global leader in entertainment and hospitality. We

embrace innovation and diversity to inspire excellence. We reward our employees, invest in our

communities and enrich our stakeholders. We engage, entertain and exceed the expectations of our

guests worldwide.

OUR MISSION

MGM Resorts International is the leader in entertainment and hospitality, a diverse collection of

extraordinary people, distinctive brands and best-in-class destinations. Working together, we

create partnerships and experiences that engage, entertain and inspire.

Our Core Values

Teamwork: We treat each other with mutual respect, we value the contributions of all of our

employees and we encourage open communication of ideas, opinions and suggestions.

Integrity: We do not compromise our integrity, even for the sake of profit. The quality of our

reputation is just as important as the quality of our resorts.

Excellence: We do not compromise in our efforts to deliver superior service and an exceptional

experience to our guests.


Hierarchy

The whole industry operates on a Hierarchical Structure where senior manager (or managers) on

the top will be responsible for the operations of the entire organizations and lower ranking

managers are located down the various levels of the organization. Flat hierarchy can’t be used here

because in flat hierarchy on the top level only one CEO should control all this managers. If we try

to implement this in big organization like MGM where about 8,000 middle employees are working

the system will choke.

Organizational structure


START UP

The company's background can be traced to 1969, when airline and casino tycoon Kirk Kerkorian

bought a controlling stake in the Metro-Goldwyn-Mayer film studio. In 1970 and 1971, Kerkorian

struggled with debt from his acquisitions of MGM and Western Airlines, and was forced to sell a

majority of his casino company, International Leisure, to Hilton Hotels at a steep discount. When

the Las Vegas Hilton, the casino he had built, subsequently became the most successful hotel in

Las Vegas, Kerkorian was inspired to lead the studio into the gambling industry. It opened the

original MGM Grand Hotel and Casino (now Bally's Las Vegas) in 1973.The MGM Grand Reno

followed in 1978.

By 1979, the two hotel-casinos accounted for most of MGM's income, and the company announced

a plan to split itself in two. The next year, the film studio was spun off as a new company, while

the original company, renamed as MGM Grand Hotels Inc., retained the two hotel-casinos.

Kerkorian held a 47 percent stake in both companies.

In 1985, Kerkorian began seeking a buyer for MGM Grand Hotels, to allow him to concentrate on

running United Artists and on developing new properties under the MGM Grand name.A deal was

reached for Bally Manufacturing to buy the company; the deal closed in April 1986, and the two

casinos were renamed under the Bally's brand. The terms of the sale allowed Kerkorian to retain

rights to the MGM Grand name, and plans were announced to offer the stockholders of MGM

Grand Hotels shares in a new company that would hold the naming rights.

The company now known as MGM Resorts International was formed in 1986 as Grand Name Co.

as a subsidiary of Kerkorian's Tracinda Corporation. It was renamed the following year as MGM

Grand, Inc.

The company's first venture was MGM Grand Air, a luxury airline offering service between New

York and Los Angeles, which launched in September 1987. The company also made an offer to

take over financially struggling Pan American World Airways, but it was rejected by Pan Am's

board in November 1987 for being too conditional.

In August 1987, MGM Grand bid $152 million for the bankrupt Dunes Hotel in Las Vegas, but

was beat out by Japanese billionaire Masao Nangaku. Instead, the company acquired the Desert

Inn and Sands casinos in February 1988 from Summa Corporation for $167 million.


SUCCESS STORY

In 2001 and 2002, following the merger with Mirage, the company explored options for its next

major development project, including opportunities in the Las Vegas, Atlantic City, Chicago, and

Macau markets. The 55-acre site of the Boardwalk casino on the Las Vegas Strip was earmarked

for a technologically advanced megaresort targeting a Generation X demographic. In Atlantic City,

MGM shifted focus from its previously announced boardwalk site to a proposed billion-dollar

hotel and casino on a 55-acre tract adjacent to the Borgata, where Wynn had planned to build the

Le Jardin casino.In the Chicago market, MGM agreed to pay $600 million to buy the unfinished

Emerald Casino in Rosemont, Illinois,

The Las Vegas Monorail was built to connect MGM Grand to Bally's in 1995. The coming-out

party for the monorail, on behalf of Bally's, consisted of showgirls and guys from Bally's famed

show, Jubilee!, helping groups to the monorail. Characters from the Wizard of Oz greeted the

groups on the MGM side. The track was later updated to become the southernmost section of the

Las Vegas Monorail. The MGM Grand station was refurbished, the trains were replaced with

Bombardier M-VI's, and the track was extended beyond the southern station to provide for track

switching for the trains, as well as a starting point for a potential future southern extension to the

monorail line.

In 2000, in an attempt to appeal to a more "mature" clientele, the hotel underwent a major

renovation, and almost all traces of the Oz theme were removed. The theme is now more of the

Art Deco era of classic Hollywood, and the hotel started billing itself as The City of Entertainment.

More recently, the resort has used the phrase "Maximum Vegas", referring to the vast amount of

activities MGM Grand offers its guests. In Macau, where Stanley Ho's 40-year government-

granted monopoly on gambling was coming to an end, MGM submitted a bid for one of three

available gaming concessions.


COMPANY OVERVIEW

MGM Resorts International develops, builds and operates unique destination resorts designed to

provide a total resort experience, including first-class accommodations and dining, world-class

entertainment, state-of-the-art meeting and convention facilities, and high-quality retail and

gaming experiences.

With 62,000 employees, the Company is one of the world's leading global hospitality and

entertainment companies with 23 resorts. Operate a portfolio of destination resort brands in Las

Vegas, including Bellagio, MGM Grand, Mandalay Bay and The Mirage, as well as The Signature,

Excalibur, Luxor, New York-New York, Monte Carlo and Circus Circus. In Las Vegas MGM also

have a significant holding in City Center, the iconic hotel, convention, retail and dining complex

at the heart of the Las Vegas Strip featuring ARIA Resort and Casino and Vdara Hotel and Spa,

Crystals retail and Veer condominiums. In Mississippi, they operates Beau Rivage and Gold Strike

Tunica while in Michigan MGM Grand Detroit. They have a 51% interest in MGM China Holdings

Limited, which owns the MGM Macau resort and casino and is in the process of developing a

resort on Cotai. Through hospitality management subsidiary, and have a growing number of

development and management agreements for casino and non-casino resort projects around the

world.

All properties are wholly owned by MGM Resorts International except where indicated.

Las Vegas Strip

Bellagio

Circus Circus Las Vegas

Adventuredome

Slots-A-Fun Casino

CityCenter (50% joint venture with Dubai World)

Aria Resort & Casino

Mandarin Oriental

The Crystals

Vdara

Veer Towers

Excalibur


Luxor

Mandalay Bay

Delano Las Vegas

Mandalay Bay Convention Center

Mandalay Bay Events Center

MGM Grand Las Vegas

MGM Grand Garden Arena

Skylofts at MGM Grand

The Mansion at MGM Grand

The Signature at MGM Grand

Monte Carlo

Hotel 32

New York-New York

The Mirage

T-Mobile Arena (Las Vegas)

Elsewhere in Nevada

Nevada Landing Hotel and Casino – Jean, Nevada (closed March 20, 2007)

Shadow Creek Golf Course – North Las Vegas, Nevada

Other properties

Beau Rivage Hotel and Casino – Biloxi, Mississippi (Designer Steve Wynn)

Fallen Oak Golf Course

Gold Strike Casino Resort – Tunica Resorts, Mississippi

Grand Victoria – Elgin, Illinois (50% owned and operated by RBG, LLP, a subsidiary of Hyatt)

MGM Grand Detroit – Detroit, Michigan (98% owner in partnership with Partners Detroit, L.L.C.)

MGM Macau – Macau, China (50% joint venture with Pansy Ho, opened 2007) (51% after IPO)

MGM National Harbor – National Harbor, Maryland (opening 2016)

MGM Springfield – Springfield, Massachusetts (opening 2018)

Primm Valley Golf Club – Nipton, California


The Borgata – Atlantic City, New Jersey (owned by Marina District Development in which MGM

has a 50% interest)

Awards & Recognition

Diversity & Inclusion

• 25 Noteworthy Companies for Diversity

DiversityInc Magazine

• 40 Best Companies for Diversity

Black Enterprise Magazine

• Corporate Equality Index

Human Rights Campaign

• #15 of Top 50 Employers

Equal Opportunity Magazine

• The Diversity Elite

Hispanic Business Magazine

• Best Companies for Latina Employees

Latina Style Magazine

• MGM Grand Las Vegas – #18 of Top 25 U.S. Diversity Councils

The Association of Diversity Councils


Revenue Management strategies followed at MGM Grand

MGM continuously formulates daily discount offering all basic category rooms

Sell extra value and benefits like spa treatments

Keep discount categories like advance purchase rates, corporate rates.

Promotes group reservation to maximize non- room revenue.

Tighten guarantee and cancellation policies to avoid last moments no –shows or

cancellations.

Raise rates as consistent with the competitors to generate optimum revenue.

Considers rate increase for packages instead of giving more discount.

Apply deposits and guarantees to the last night of stay.

Abolish stay restriction.

Establish relationship between competitors

Selects date for the close to arrivals.

Provides personalized offer and package on guest demand on exclusive price tag.

Establishing relationship with the other hospitality service units I.e. airlines and cruise

ships or even car rents

Extensive concentration to sales and marketing team and various other third party

outdoor advertising unit.

Encourage upgrades.

DEMAND CALENDER

A demand calendar is the first step before budgeting, and it will also help you make informed

pricing decisions based on solid data and statistics. It is a yearly roadmap to build your revenue

management strategy. It demonstrates historical demand patterns matching them with future

events.

The demand calendar will help to evaluate how much revenue each event can generate. But have

to take into consideration demand exceptions

The most basic version of a demand calendar contains the following information;

RevPAR last year

Groups or events last year

Demand level indicator last year (High, Medium, Low, and Distressed)


Demand level indicator this year

Bank holidays

MARKET SEGMENTATION

One of the components needed to apply hotel revenue management is market segmentation. It

allows one to target and market to a variety of consumer groups with different behavior with an

offer that matches their needs and budget level. hotel market segmentation shall help to identify

the purpose of the trip: either business or leisure. The price does not decide of the market

segmentation. Clear distinction must also be achieved between individual and group business.

The market segmentation shall help you identify the trends of your business:

Length of Stay

Day of Weeks stays

Total Revenue per room, Total Revenue per client

Booking Lead Time

Cancellation %

No Show ratio

Today's ways of booking make it difficult to identify the purpose of the trip. Segment by default

the individual bookings for short midweek stays as business. Identify as leisure reservations of

double rooms over the week-end.

FORECASTS

Forecasts are not perfect. It is a strategic management tool. A basic Forecast is better than none. It

is the path to market and customer knowledge. It reinforces your pro-activeness in terms of

inventory and rate management.

Forecast module can help to forecast the double occupancy, the number of

arrivals and departures: useful for the front-desk and housekeeping. On the basis of your forecasted

number of nights by segment, you can anticipate the number of guests: it helps housekeeping to

forecast their costs, and the restaurant the number of breakfasts. The forecast can help you to

prevent and identify challenges in reaching your objectives: it gives time to adapt strategies or

work out additional actions.

The forecast can help to identify low demand period: you can develop it as a communication tool

taken over by sales department to focus their efforts on sales.


STAY CONTROL

You should have the knowledge of the number of one night stays, two nights stays, three nights

stays, four nights stays plus. How? Refer to your Guest In House list same period previous year

including your denials/regrets. Check the patterns on your future on the books.

Which hotel stay restrictions can you apply and where?

MLOS / minimum length of stay

Maximum lenght of stay

Min / Max length of stay combination

Understand

CTA / closed to arrival

CTD / closed to departure

Stay through restriction

DISPLACEMENT CALCULATION

The last room value (LRV) is the total value of the last rooms to sell. It can also include the Total

Revenue or the Total Net Revenue. A displacement calculation or analysis should be regularly

performed on your main accounts to evaluate the revenue gain: revenue displaced on identified

dates minus the positive revenue on non constrained dates.

In hotel revenue management that requires extracting the day by day production of your TOP

accounts (Tour Operators, Corporate, Consortia and IDSs) and evaluating day by day the

possible displacements.


PERSONNEL MANAGEMENT

As MGM continues to evolve, so do the products that they offer. They are constantly building new

relationships with a variety of carriers and with those relationships come new employee benefits

products options. MGM strive to make building these relationships a priority so that one are always

able to deliver the best plans to your clients.

MGM is primarily known for its Educator Disability product. Other amazing employees benefits

product options.

HEALTH PLANS: - Depending on position and location, one may become eligible to receive

quality, affordable health coverage, including medical, prescription drug, dental, and vision

coverage.

Preventive services at low or no cost for employees and their covered dependents, including:

Annual physical exam

Dental exam and cleanings

Comprehensive eye exams

Free or reduced-price generic prescription drugs

Mail order prescription drug program for maintenance medications

Wellness programs, including Maternity Management, Tobacco Cessation, and Weight

Management

SAVINGS PLANS: -

Pre-tax contributions - contributions come out of one pay before taxes are calculated, reducing

ones taxable income and helping to put more of money to work for one in the Plan

After-tax Roth contributions – one pay taxes on ones contributions now, but don’t pay income

taxes later, even on any earnings one investments may make

A Company match (Eligibility and restrictions apply)

A variety of investment funds, ranging from conservative to moderate to high-risk


Company-Paid Benefits

Life Insurance

Disability Insurance (eligibility varies by location)

Adoption Assistance

Buy-More Benefits

Supplemental Life Insurance

Short- and Long-Term Disability Insurance

Supplemental Insurance (Aflac Group Critical Illness and Group Accident Plans)

Health and Dependent Care Flexible Spending Accounts (FSA)

Auto, Home & Renters Insurance

Pet Insurance

Legal Aid

Child Development Center (in select locations)

WELLNESS PROGRAMS

Jim’s Plate

Free meals are provided daily at each property. Jim’s Plate is a healthy option that was designed

to take the guesswork out of eating a well-balanced meal, and is modeled after the USDA’s

MyPlate. Our Executive Chefs, some of our Celebrity Chefs, and even a couple fellow employees

created the recipes.

Life Time Fitness

MGM Resorts has partnered with Life Time Fitness, The Healthy Way of Life Company, to help

employees achieve health and wellness objectives. Employees can meet with a Life Time Coach

to learn how to make good choices in a convenient, simple, and fun way that fits into their lifestyle.

Life Time Coaches offer exercise and nutrition programs, stress management techniques, and

strategies to create healthy habits.


BENEFITS OF REVENUE MANAGEMENT

Customer Expectations

Revenue management provides companies with a better understanding of what their customers

expect in the company’s product. The research involved with revenue management gives

companies insight into the specific wants and needs of their customers, and enables the company

to shape the product and its presentation more effectively.

Competitive Pricing

Revenue management enables the company to create a competitive pricing strategy that will draw

in customers and give the company an edge over its competitors. In fact, revenue management is

so pervasive within certain industries that companies failing to implement revenue management

strategies are unable to continue competing effectively within the marketplace.

Market Segments

Revenue management seeks to show the company the full extent of its market segment and to

introduce the company to new market segments that are available. Companies that usually focus

on a certain market segment might need to expand their focus to continue growing in the industry.


Other various benefits of revenue management are:-

Revenue management ensure better and improved forecasting.

Apart from competitive pricing, Revenue management provide hotel with seasonal pricing

to thrive for maximum potential revenue.

Revenue management identify market segment demand and anticipate dynamic chances

and trends in the current market.

Revenue management not only maximize revenue it also enhances co-ordination among

various departments and induces with team spirit.

Determination of discount and offer activities, R.M helps is determine the amount of

discount to be offered, depending on the date and periods.

Revenue management helps is establishing benchmarks and standard on which actual

performance is measured to formulate appropriate corrective action.

Revenue management act as communicating subject and platforms between top and middle

management.

Revenue management identify lean and peak period of the hotel, accordingly any repairing,

renovation or periodic cleaning.

Revenue management also predicts with the staff requirement needed to conduct the

activities smoothly.

Provide directions and set standards for manger which motivates and compare their actual

performance with the set standards.

Revenue management retains right inventory till the right time to ensure higher sell value.

Revenue management provide management with the various utility tools to survive

dynamics market condition.


Disadvantages of Revenue management

Apart from the various advantages of the revenue management to the hotel. Still, it’s attached with

the CON or disadvantages which are as following:-

It doesn’t guarantee business to the hotel. Revenue management may predict the increase

in business on the paper but that can be opposite in the reality when the time came, for

which it was formulated.

Revenue management requires skills and sound knowledge form the personnel to conduct

the procedure which lead to demand for skilled personnel at higher price.

May hamper guest satisfaction, as some guest do not like the practices of differential

pricing. In evaluation the efficiency of the yield management system, the tradeoff between

generating short – tern profits and creating long –term guest loyalty needs to be studied

carefully.

Revenue management doesn’t includes other various external factor or non- monetary

factors like:- government laws

Revenue management requires past data and information for prediction. Which arise data

management system which requires volume (space) and money to store.

Revenue management may led to employees malpractices: - RM may influence the

employees to follow wrong practices. For example:- A hotel might offer incentives to the

staff for selling higher category rooms and this might motivates the reservation agents to

upsell while making reservation. So, the agent might not sell the basic category rooms and

offend certain guest.

Revenue management is time consuming process with continuous process and always

needed new corrections and changes in changing day events.


‘

Database and Statistics


APPLICATION OF FORMULAS OF MEASURING YIELD

MGM ARIA HOTEL

Case 1st Three month ended

2015

2014

Total number of room sold in three month end at 2015

Total no of room sold = Total number of rooms X Occupancy

Total number of room = 4004

Occupancy= 90.2%

Total number of room sold = 4004 X 91.1/ 100

Total number of room sold = 3611.6

So, Total number of room sold = 3612(Approx.)

Occupancy

ARR

( in $)

Total no

of room

sold

Total

Revenue

(in $)

Total no

of Room

RevPAR

(in $)

90.2%

235

------

-------

4004

212

91.1%

217

------

------

4004

198


Total Revenue = Total no of room sold X Average Room Rate

Total number of room sold = 3612

Average Room Rate = $ 235

Total room revenue = 3612 X 235

So, Total Room revenue = $ 848820

Total number of room sold in three month end at 2014

Total no of room sold = Total number of rooms X Occupancy


Occupancy = 91.1%

Total no of room sold = 4004 X 91.1/100

Total no of room sold = 3647.6

So, total number of room sold = 3648(approx.)


Total revenue = Total number of rooms sold X Average room rate

Total number of rooms sold = 3648

Average room rate = 217

Total revenue = 3648 X 217

Total revenue = $791616

Answer

2015

2014

Occupancy

ARR (in $)

Total no

of room

sold

Total revenue

( in $)

Total no

of

rooms

revPAR

( in $)

90.2%

235

3612

848820

4004

212

91.1%

217

3648

791616

4004

198


Case 2th

MGM ARIA HOTEL

Twelve month ended

2015

2014

At the ended of three month of 2015

Total number of room sold = Occupancy X Total number of rooms.

Total number of rooms = 4004

Occupancy = 92.3 %

Total number of rooms sold = 92.3% X 4004

= 92.3/ 100 X 4004

= 3695.6

So, Total number of rooms sold are 3696 approx.

Total room revenue at the end of the twelve month of 2015

Total room revenue = Total number of room sold X Average room rates

Total number of rooms = 3696

Average Room rate = 233


Total number of room revenue was $ 861168 at the end of 2015

Occupancy

ARR

Total no of

room sold

Total

revenue

(in$)

Total no

of rooms

revPAR

(in $)

92.3% 233 --- --- 4004 215

92.9% 217 --- --- 4004 202


At the ended of twelve month at 2014

Total number of rooms = Occupancy X Total number of room


Occupancy = 92.9%

Total Number of rooms = 92.9% X 4004

= 92.9/100 X 4004

Total number of rooms sold = 3719.7

So, Total number of rooms sold = 3720 approx.

Total room revenue = total number of room sold X Average room rate

Total number of room sold = 3720

Average room rate = 217


So, total room revenue is $807240.

Answer

2015

2014

Occupancy Average

room

rate

Total

room

sold

Total

revenue (

in $)

Total

number

of room

revPAR

92.3 % 233 3696 861168 4004 215

92.9% 217 3720 807240 4004 202


YIELD = Actual room revenue / Potential room revenue

YIELD for the 2015 twelve month ended

Actual room revenue = $ 861168

Potential room revenue = Total number of room available X Average room rate

= 4004 X 233

Potential room revenue = $ 932,932

YIELD = 861168 / 932932

YIELD =0.92

ASSUMPTIONS

Hotel sun star has 600 rooms (200 single rooms and 400 double rooms). The hotel is currently

running on 75 per cent occupancy, with an average room rate of Rs. 2,500. The hotel is offering:

Single room at Rs 3,500 for single occupancy

Single room at Rs 4000 for double occupancy

Double rooms at Rs 4,500 for single occupancy.

Double room at Rs 5,000 for double occupancy

270 rooms are occupied by more than one guest in the hotel.

Find:-

Potential average single rate

Potential average double rate

Multiple occupancy percentage

Rate spread

Potential average rate

Room rate average factor


Answer

1. Potential Average Single Rate

Single Room

No. of Rooms

Room Rate

Revenue at 100% Single

Occupancy (in Rs)

Single Room

200

Rs 3,500

7,00,000

Double Room

400

Rs 4,500

18,00,000

Total

25,00,000

The potential average single rate can be calculated as under:

Potential average single rate = Single occupancy room revenue / Number of rooms (total)

Single occupancy room revenue = 25,00,000

Number of rooms (total) = 600

Potential average single rate = Rs 2500000/ 500

So, Potential average single rate = Rs 4,166.67

2. Potential average double rate

Room Category

No. of room

Room rate

Revenue at 100%

Double occupancy (in

Rs)

Single room

200

Rs 4,000

8,00,000

Double room

400

Rs 5,000

20,00,000

Total

28,00,000


Potential average double rate = Double occupancy room revenue/ Number of rooms (total)

Double occupancy room revenue = 2800000

Number of rooms = 600

= 2800000/ 600

So, Potential average double rate is Rs 4,666.66

3. Multiple Occupancy Percentage

Multiple occupancy percentage =

No. of rooms occupied by more than one guest

------------------------------------------------------------- X 100

No. of occupied rooms

No. of occupied rooms = Total number of rooms X Occupancy ratio

= 600 X 75%

= 450 rooms

Multiple occupancy percentage = 270/450

= 0.6 or 60%

4. Rate Spread

Rate Spread = Potential average double rate – Potential Average Single rate

= 4,666.66 – 4,166.67

= Rs 500

5. Potential Average Rate = (Multiple occupancy percentage X Rate spread) + Potential

average single rate

Multiple occupancy percentage = 0.6


Rate spread = 500

Potential average single rate = 4166.67

Potential average rate = Rs (0.6 X 500) + 4166.67

= Rs 300 + 4166.67

Potential average rate = Rs 4466.67

6. Room rate achievement factor

Room rate achievement factor = Actual average rate / Potential Average rate

= Rs 2500 / Rs 4466.67

= 0.56

PRICING OF THE PRODUCT

Name of the room = discounted price / real base price

SKYLOFTS TWO BEDROOM LOFT = $1798

SKYLOFTS ONE BEDROOM LOFT = $ 1098

SKYLINE MARQUEE SUITE = $ 538/634

PENTHOUSE CITY VIEW SUITE = $ 300/345

CITY VIEW SUITE = $ 258 /304

TOWER ONE-BEDROOM SUITE = $ 190/224

TOWER SPA SUITE = $ 181/214

EXECUTIVE QUEEN SUITE = $ 173/204

EXECUTIVE KING SUITE = $ 164/194

STAY WELL GRAND QUEEN = $158/186

STAY WELL GRAND KING = $149/176

GRAND KING STRIP VIEW = $136/161

GRAND QUEEN STRIP VIEW = $132/ 156

GRAND KING = $128 / 151

GRAND QUEEN = $119 / 141

TOWER ROOM = $111 /131

WEST WING KING = $ 98 /116


SWOT ANALYSIS OF MGM GRAND

Strengths

Reputable brand: MGM Mirage is one of the world's leading and most respected

companies with significant holdings in gaming, hospitality and entertainment. (MGM

Mirage n.d.).

Successful business model: MGM Mirage owns and operates 16 properties located in

Nevada, Mississippi and Michigan, and has 50% investments in four other properties in

Nevada, New Jersey, Illinois and Macau. City Center, an unprecedented urban metropolis

on the Las Vegas Strip scheduled to open in late 2009, (MGM Mirage n.d.).

Service Quality Assurance.

Strict confidentiality of client profile. Convenience, – Instant bookings online.

Weaknesses

Lack of trust and brand name in Singapore

Potential problem in recruiting the right Employees

Possible high recruitment and training cost

Need to build clientele database from scratch

Need time to educate target market on the benefits of staying at MGM Mriage Hotel

Low UAI – Tendency for employees to job-hop.


Opportunities

Singapore is voted World’s easiest place to start business (Economic Development Board

of Singapore n.d.)

Singapore’s Masculinity is at 48, indicating that Singapore has a balanced gender roles in

the society – therefore can target both sexes

Increasing number of dual-income families (Singapore Department of Statistics 2009)

High PDI, Collectivism – Family is the core of Singapore’s society where family needs

comes

First therefore MGM Mirage would be a good option as it doesn't not only focus on the

casino.

Low UAI – Consumers are willing to try out new products and services.

Low UAI – Important factor for gambling.

Population is Internet savvy – Internet marketing aids speed of product diffusion.

Unemployment stabilizes – fewer redundancies and more job openings (Ministry of

Manpower Singapore 2009).

Threats

Government regulations - The casino operator must ensure that it remains suitable to

manage and operate a casino in accordance with Section 45 of the Casino Control Act.

(Casino Regulatory Authority 2010).

Some individuals may engage in criminal activities to support their gambling habits –

might create a bad impression in the eyes of general public.

Bad services by new employees might affect reputation.

Business concept might be replicate by competitors. Ease of competitor entry.


Effects of revenue management on company business

Built new image of the hotel due to significant focus marketing and sale activities.

Increase in sale of the hotel rooms.

Motivation to the staff members.

Competitive pricing the rooms.

Decrease in no-show and cancellation ratio.

Identification of new markets.

Appropriate segmentation of room categories.

Increase in guest satisfaction due to discounts offer.

Formulation of various offer and new value added products.

Compensation of revenues loss by non-room revenues.

Reduce in operation cost due to appropriate estimation of staff and stock requirements.

Suggestion and advice for better execution

More liberal policies

Tapping to new potential markets in Asia like Japan, China, Russia etc.

Initiate training center for learning.

Diversification in cruise and car renting sector.

Reduce the fluctuation in the daily price differentiation.


Webliography

Xhotel.com:- http://www.xotels.com/en/revenue-management/revenue-management-

strategies-for-hotels

Punetech.com :- http://punetech.com/files/IDeaS-Basics-of-RMpdd

Mgm resorts international US:- https//www.mgmgrand.com/en.html

Yahoo finance :- mgm20finance.html

Wikipedia :- wwwe.wikipedia.com

Mgmbenefits.com :-

http://ccs.infospace.com/ClickHandler.ashx?ld=20160225&app=1&c=dealwifi3&s=deal

wifi&rc=DealWifi3&dc=&euip=150.129.121.38&pvaid=8880d69baea042f993d234fb99

ed753d&dt=Desktop&fct.uid=d027fe029e5246109aa13c7e7856faca&en=%2bI14PArAk

OdlzxFj5XUR3iRlJZuTDOSOYQGmJubPUSMWMZ6TDH6v6V3DtAgZM2l3&du=w

ww.mgmbenefits.com&ru=http%3a%2f%2fwww.mgmbenefits.com%2f&ap=5&coi=771

&cop=main-

title&npp=5&p=0&pp=0&ep=5&mid=9&hash=46A9FA4C413DA2CC65B17B146E41F

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