Tag: profit

How Does a Hotel Revenue Management System Help Increase Profit?

The hotel revenue management needs to follow new trends and technologies to increase their profit.

FREMONT, CA: The meaning of hotel revenue management can be described as selling the accurate room to the precise client at the right moment and the right place with a precise distribution channel with the best commission efficiency.

The hotel revenue management has to balance the demand and capacity by estimating the prices to increase the hotel’s resources. The increasing demand for the internet, along with the growth of online travel agencies and review portals, have included more dimensions in the field. Traditional hotel revenue management has become more complicated due to the innovative development in the area. But with its new process, the hotel revenue management offers an original method to reasonably and objectively measure the pricing and customer satisfaction.

Steps to Getting Started with Revenue Management

Even though the world of hotel revenue can be complicated, some steps can help apply for a revenue management program in a property for the first time. It will help the organizations if they review the steps at regular intervals so that the property can follow the best practices to increase revenue. Here are some of the essential steps that the properties can follow.

• Historical results

• Booking space

• Channel management

• Group revenue management

• The basics

• Segmentation

• Pricing

• Budgets and forecasts

Trends for Modern Revenue Management

Hotel revenue management has witnessed several new best practices and tools in the past few years. The two primary factors that affect a modern revenue manager’s success are how well RMs combine their knowledge with the big picture and the tools they are utilizing.

Apart from the timeless fundamental trends like pricing strategies, many current trends and techniques are being used in the system. These new techniques are crucial as it will help the growth of revenue and increase direct bookings. Revenue management must take advantage of these systems if they want to profit and remain steady in the competitive market.

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Marriott reports third-quarter profit as leisure travel improves

TRAVEL INDUSTRY

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Marriott gains as hotels rebound

Bethesda, Md.-based Marriott International on Friday reported a surprise third-quarter profit, helped by cost cuts and a near doubling of occupancy rates in its North American hotels from the previous quarter as leisure travel rebounded on easing novel coronavirus curbs.

While international travel continues to be affected because of border restrictions in many countries, travel within nations has picked up and resulted in a recovery in occupancy rates for hotel chains.

Marriott, which owns the JW Marriott and Ritz-Carlton brands, said 94 percent of its hotels around the world had resumed operations.

Occupancy rates in North America, Marriott’s biggest market, rose to 37 percent in the third quarter ended Sept. 30, from 19.6 percent in the second quarter. The company said business and group travel were recovering more slowly.

Greater China was Marriott’s best-performing market in the reported quarter, as occupancy rates jumped to 61.4 percent from 35.5 percent in the second quarter.

Earlier this week, smaller rival Hilton Worldwide also said it had seen a gradual improvement in demand from a pandemic-induced slump after cost cuts helped the company post a surprise quarterly profit.

— Reuters

HEALTH INDUSTRY

Karen Lynch chosen as new head of CVS

CVS Health named Karen Lynch as its next chief executive, putting a seasoned insurance executive in place to succeed the health-care giant’s longtime leader Larry Merlo.

The shift in leadership reflects how CVS has further evolved under Merlo’s direction from a pharmacy chain into a health conglomerate that sells insurance coverage, administers drug-benefit plans, and offers care, including novel coronavirus testing. Lynch, 57, joined CVS in 2018 when it bought Aetna, where she was widely seen as a likely successor to CEO Mark Bertolini.

Lynch will become one of the most high-profile female executives in the business world, leading a company with a market value of more than $80 billion. Her appointment will be effective Feb. 1, 2021.

Merlo, 64, became CEO in 2011 and molded CVS into a health-industry bellwether. He joined the company in 1990 when it bought Peoples Drug, and worked his way up through the retail ranks to the top post. In his nine years at the helm, CVS has expanded its number of stores to 9,900, along the way acquiring Aetna in 2018 for $68 billion.

Like many health-care companies, CVS has been challenged by the coronavirus pandemic. However, some of those pressures have eased, and CVS boosted its outlook for the year on Friday after posting stronger-than-expected third-quarter earnings.

— Bloomberg News

Also in Business

Exercise bike maker Peloton Interactive on Thursday warned of near-term supply constraints, as demand for its at-home fitness equipment has shot up due to gym closures during the pandemic. The exercise bike maker’s Connected Fitness revenue jumped 274 percent to $601.4 million in the quarter while its subscriptions climbed 137 percent to 1.33 million. The segment, Peloton’s primary revenue generator, includes interactive fitness equipment with touch screens.

Insurer American International Group said on

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Hotel Operator Hilton Shares Rise After Profit Beats Estimates; Target Price $100

Hilton Worldwide Holdings, one of the largest and fastest-growing hospitality companies in the world, reported a better-than-expected profit in the third quarter as cost-cutting helped the multinational hospitality company to recover from the COVID-19 pandemic slump, sending its shares up about 2% in the premarket.

The U.S. hotel operator said its diluted EPS at -$0.28 for the third quarter, and diluted EPS, adjusted for special items, was $0.06. That was better than market expectations of a loss of 2 cents per share.

Hilton posted a net loss of $81 million for the third quarter and adjusted EBITDA of $224 million. System-wide comparable RevPAR plunged 59.9% on a currency-neutral basis for the third quarter from the same period last year.

“The better than expected results and continued progress in key metrics should be incrementally positive for the shares, in the context of the broader market action. Despite the limited visibility into near-term business and group travel, the improving RevPAR and continued NUG are positive bases for recovery and furtherance of the financial merits of the business model,” said David Katz, equity analyst at Jefferies.

Hilton shares rose 1.61% to $92.11 in pre-market trading on Wednesday; however, the stock is down about 20% so far this year.

Executive Comments

“Our third-quarter results show meaningful improvement over the second quarter. The vast majority of our properties around the world are now open and have gradually begun to recover from the limitations that the COVID-19 pandemic has imposed on the travel industry, with occupancy increasing more than 20 percentage points from the second quarter,” said Christopher J. Nassetta, President & Chief Executive Officer of Hilton.

“While a full recovery will take time, we are well-positioned to capture rising demand and execute on growth opportunities.”

Hilton Stock Price Forecast

Ten equity analysts forecast the average price in 12 months at $89.89 with a high forecast of $104.00 and a low forecast of $80.00. The average price target represents a -0.84% decrease from the last price of $90.65. From those ten analysts, five rated “Buy”, five rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $81 with a high of $129 under a bull-case scenario and $49 under the worst-case scenario. The firm currently has an “Equal-weight” rating on the hospitality company’s stock. ValuEngine raised Hilton Worldwide to a buy rating from hold.

Several other analysts have also recently commented on the stock. Jefferies Financial Group raised to a buy rating from hold and increased their price target to $101 from $72. Raymond James increased their price target to $92 from $90 and gave the company an outperform rating. Citigroup increased their price target to $92 from $75 and gave the company a neutral rating.

We think it is good to buy at the current level with a target of $100 as 100-day Moving Average and 100-200-day MACD Oscillator signal a buying opportunity.

Analyst Comments

“Humana has both high earnings exposure (~75%) to Medicare Advantage (MA), and leading

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Mastercard shares fall as profit drops on virus-led travel slowdown

A sticker shows that a store accepts MasterCard in Harvard Square in Cambridge, Massachusetts, U.S., July 25, 2018. REUTERS/Brian Snyder/Files

(Reuters) – Mastercard Inc’s quarterly profit missed analyst estimates on Wednesday as the COVID-19 pandemic led to a slowdown in global travel and related spending, sending the payment processor’s shares more than 4% lower.

The pandemic has forced companies to lay off workers by the millions, hurting their spending power, and the hit to air travel has also taken a toll on cross-border card transaction volumes.

Mastercard reported a 36% drop in cross-border volume on a local currency basis in the reported quarter. Gross dollar volume, the dollar value of transactions processed, rose 1% to $1.6 trillion. (bit.ly/34CIvyt)

Cross-border volumes have continued to fall since the quarter ended, with all first three weeks of October clocking declines of more than 30%, according to an investor presentation.

“We are seeing encouraging progress in the trajectory of domestic spending, while travel spending remains a challenge,” Chief Executive Officer Ajay Banga said in a statement.

American Express Co on Friday warned that business travel spending would not pick up before early 2022 after reporting underwhelming third-quarter profit due to weak spending on travel and entertainment by its card users.

Mastercard’s total operating expenses fell 4% to $1.7 billion in the quarter.

Net income fell 28% to $1.5 billion, or $1.51 per share, in the third quarter ended Sept. 30. Excluding items, profit was $1.60 per share, missing Street estimates of $1.66, according to IBES data from Refinitiv.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Ramakrishnan M.

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AmEx issues dismal outlook on business travel spending as profit slumps

By Niket Nishant



a close up of a sign: Pedestrians walk past an American Express sign in New York


© Reuters/LUCAS JACKSON
Pedestrians walk past an American Express sign in New York


(Reuters) – American Express Co on Friday warned that business travel spending would not pick up before early 2022 after reporting underwhelming third-quarter profit due to weak spending on travel and entertainment by its card users.

In what appears to be a shift in strategy, the New York-based credit card issuer, for long a preferred choice of affluent Americans, walked back on its cost-cutting target of nearly $3 billion in 2020 and decided to spend heavily to add new card customers.

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“We’re all consistent in terms of how we feel about business travel, which is probably not going to (pick up) till late 2021, early 2022,” Chief Executive Officer Stephen Squeri said in a post-earnings conference call with analysts.

Credit card companies have been hit hard as the pandemic-induced recession forces companies to lay off workers and consumers to stay at home, drastically reducing their purchasing power.

Spending on its cards fell 19% to $248.7 billion in the quarter, with travel and entertainment related spending sliding 69% from a year earlier.

AmEx, which has tie-ups with large airlines and hotels and whose largest shareholder is Warren Buffett’s Berkshire Hathaway Inc , set aside $665 million in loss provisions during the quarter.

However, it was still lower than what it set aside last quarter, as the outlook for potential defaults improved, with AmEx saying that overall spending volumes had shown a “steady recovery” since the lows of mid-April.

Online consumer retail spending was a bright spot for the card issuer during the quarter, clocking a 32% jump over last year.

Non-travel and entertainment spending, which comprises most of the spending on AmEx’s network and includes online and offline retail spending, inched up 1% from a year ago after adjusting for cross-currency fluctuations.

Quarterly profit fell 40% to $1.07 billion, or $1.30 per share, missing analysts’ average estimate of $1.35 per share, according to Refinitiv data, hurt mainly by higher expenses.

Total revenue, excluding interest expense, fell 20% to $8.8 billion, but came in ahead of muted expectations.

AmEx shares, which have lost about 16% of their value so far this year, fell 3.5% after reporting results.

(Reporting by Niket Nishant in Bengaluru; Writing by Noor Zainab Hussain; Editing by Shailesh Kuber and Arun Koyyur)

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Qantas says Australia virus travel curbs cost it $71M in quarterly profit

Qantas Airways Ltd said on Friday that Australian state border closures due to the coronavirus pandemic had cost it A$100 million ($71 million) in earnings in the first quarter and would have a negative impact in the second quarter as well.

The airline is running less than 30% of its normal domestic capacity due to border closures, having earlier expected to be operating around 60% at this time, Qantas Chief Executive Alan Joyce said in a speech at the airline’s annual meeting of shareholders.

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“Essentially, this is a timing issue,” he said. “We know the upswing will materialize – just later than planned.”

Joyce said if Queensland opened its borders to the country’s most populous state, New South Wales, domestic capacity could reach up to 50% by Christmas.

The airline could report positive net free cashflow in the second half if all state borders opened with the possible exception of Western Australia, he said.

In New Zealand, where there are no domestic border curbs, Air New Zealand Ltd is operating nearly 85% of its pre-pandemic capacity.

QANTAS AIRWAYS LAUNCHES ATHLEISURE WEAR LINE AS PANDEMIC PUMMELS PROFITS

Qantas has grounded almost all of its international flights and said on Friday around 18,000 employees remain stood down receiving government benefits rather than their usual pay.

Chairman Richard Goyder said there were some positive signs around “travel bubbles,” starting with New Zealand, that could result in it flying to destinations it did not serve before COVID-19, such as South Korea, Taiwan and various Pacific islands.

The airline is on track to meet its target of A$1 billion a year of ongoing annual cost savings from the 2023 financial year, Joyce said, with A$600 million of that to be unlocked this financial year, ending June 30, 2021.

QANTAS EXPECTS GLOBAL TRAVEL WON’T RESUME UNTIL MID-2021

He added Qantas would seek to match any concessions agreed by unions for rival Virgin Australia under its new owner Bain Capital.

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Qantas has previously announced plans to cut 8,500 jobs, or nearly 30% of its pre-pandemic workforce.

($1 = 1.4033 Australian dollars)

(Reporting by Jamie Freed; Editing by Jacqueline Wong and Kenneth Maxwell)

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Qantas says Australia virus travel curbs cost it $71 million in quarterly profit

By Jamie Freed



a large passenger jet sitting on top of a runway: FILE PHOTO: Qantas aircraft on the tarmac at Melbourne International Airport in Melbourne


© Reuters/PHIL NOBLE
FILE PHOTO: Qantas aircraft on the tarmac at Melbourne International Airport in Melbourne

SYDNEY (Reuters) – Qantas Airways Ltd said on Friday that Australian state border closures due to the coronavirus pandemic had cost it A$100 million ($71 million) in earnings in the first quarter and would have a negative impact in the second quarter as well.

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The airline is running less than 30% of its normal domestic capacity due to border closures, having earlier expected to be operating around 60% at this time, Qantas Chief Executive Alan Joyce said in a speech at the airline’s annual meeting of shareholders.

“Essentially, this is a timing issue,” he said. “We know the upswing will materialise – just later than planned.”

Joyce said if Queensland opened its borders to the country’s most populous state, New South Wales, domestic capacity could reach up to 50% by Christmas.

In New Zealand, where there are no such domestic border restrictions, Air New Zealand Ltd is operating nearly 85% of its pre-pandemic capacity.

Qantas has grounded almost all of its international flights and said on Friday around 18,000 employees remain stood down receiving government benefits rather than their usual pay.

Chairman Richard Goyder said there were some positive signs around “travel bubbles”, starting with New Zealand, that could result in it flying to destinations it did not serve before COVID-19, such as South Korea, Taiwan and various Pacific islands.

The airline is on track to meet its target of A$1 billion a year of ongoing annual cost savings from the 2023 financial year, Joyce said, with A$600 million of that to be unlocked this financial year, ending June 30, 2021.

“Progress has been strong, with the FY21 programme about halfway through, and expected to be 90% complete by the end of December 2020,” he said.

The carrier has previously announced plans to cut 8,500 jobs, or nearly 30% of its pre-pandemic workforce.

($1 = 1.4033 Australian dollars)

(Reporting by Jamie Freed; Editing by Jacqueline Wong and Kenneth Maxwell)

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