CASE STUDIES : EASY CONTRACTING

Background:

Leptos Calypso Hotels is one of the leading Cyprus hotel chains. The Group has 7 hotels in Cyprus and 1 in Crete, Chania.

Description:

Group’s management negotiates hotels’ rates with Tour Operators at least once a year and agreed rates form contract’s basis for discussed period of time. Rates of a hotel vary depending on period and room type making assessment of the situation not very straight forward. Hotels’ management requested a tool that would allow instant comparison and analysis of contracting rates they negotiate with Tour Operators. Besides being an analytical tool the program had additional requirements:

• it has to make negotiations easier
• it should show instantly if new deal beneficial or not
• it should allow flexible change of periods
• to show actual rates (based on negotiated rate and estimated occupancy)
• to show sales (based on number of rooms contracted and rates)
• to allow rates comparison including various supplements (half-board, full board etc)

Or simply - it must put negotiating party that uses this program a few steps ahead of its opponent.

Solution

The main challenge was to find a way to compare two sets of rates with different internal structures. For instance first contract sells twin room for 20 pounds between 1st and 15th Nov while second contract sells the same room for 18 pounds between 4th and 27th Nov. And what happens if two contracts have different number of periods?

After algorithm was developed and approved by hotels’ management - implementation of required functionalities became a routine where you fit small solutions into a big picture. The program created within Excel utilizing Visual Basic for Applications. Choosing Excel as a basis for the solution cut overall development time in half. The program allows you to enter / modify rates and compare instantly 2 different sets of rates while altering individual rates or period boundaries. User can create new set of rates either manually or automatically by specifying contract he wants to base new rates on plus desired price increase. Various reports are produced just to name a few:

• Comparison of (rates or sales) of all entered contracts normalized to periods of the selected contract
• Seasonal values of weighted average rate and total sales for all contracts by room type
• Selecting "consider occupancy" check box will recalculate all report values (rates and/or sales) taking into account estimated occupancy coefficients
• Selection of a supplement (half-board, full board…) will recalculate reports’ values considering contracted supplement rate

Result

The result exceeded our wildest expectations. The program was widely used not only for contract negotiation but for forecasting, budgeting and competition analysis

Downloads

User Manual (200 KB)