In this, I have tried to relate revenue management with MGM GRAND hotel. All Financial information and data gathered from internet itself.

1. 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. 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

3. 3 | 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
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.

4. 4 | 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
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.

5. 5 | 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
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

6. 6 | 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
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.

7. 7 | 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
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.

8. 8 | 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
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

9. 9 | 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
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

10. 10 | 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
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

11. 11 | 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
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)

12. 12 | 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
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.

13. 13 | 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
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.

14. 14 | 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
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

15. 15 | 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
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.

16. 16 | 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
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.

17. 17 | 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
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.

18. 18 | 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
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.

19. 19 | 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
‘
Database and Statistics

20. 20 | 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

21. 21 | 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

22. 22 | 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

23. 23 | 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
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

24. 24 | 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
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
Total number of room = 4004
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.)

25. 25 | 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
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

26. 26 | 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
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 room revenue = 3696 X 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

27. 27 | 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
 At the ended of twelve month at 2014
Total number of rooms = Occupancy X Total number of room
Total number of room = 4004
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
Total room revenue = 3720 X 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

28. 28 | 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
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

29. 29 | 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
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

30. 30 | 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
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

31. 31 | 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
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

32. 32 | 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
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.

33. 33 | 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
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.

34. 34 | 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
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.

35. 35 | 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
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
514