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Tel: 012-5362420

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Hotel I Boutique, Petaling Jaya, Malaysia

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Hotel I Boutique @ Petaling Jaya, Malaysia

Yield Management / Revenue Management

A silent revolution is taking place in the lodging & travel industry, affecting the way companies are managed and operated in a progressively deregulated economic environment. The concept of the great importance of information management relative to the traditionally leading role of operations management,  accepted  today  in  most  industry sectors  around  the  globe,  is  finally  beginning  to penetrate the lodging and travel industry too.

Information & decision technologies  have arrived to assist service and lodging industry decision makers  in  meeting  the  challenge to  stay  competitive,  and  indeed  thrive,  in  this  competitive environment by taking advantage of state-of-the-art developments in new technology, operations research, and management information systems (MIS).

The lodging & travel industry generally and in particular American air carriers, have been motivated by deregulation policies and marketplace pressures to develop new decision support systems and demand driven inventory. Management systems to improve their bottom line.

Four main areas of information management applications, supported by current technology developments and a new, marketing and customer demand driven management culture, have been identified in playing a leading role in growing accommodation booking volume, revenues and an overall improvement of financial results:

•  Marketing automation and product distribution through computerised reservation systems (CRS) and communication networks.

•  Overall revenue growth and customer service quality improvement through Guest History and Marketing Databases.

•  Executive information systems and customer databases to improve customer services, and to enable early problem identification and proactive distribution cost, revenue and targeted marketing management.

•  Minimising denials and revenue losses through yield management systems and concepts.

Apart from serving the identical customer groups, lodging and passenger transport providers have on e major problem in common: they produce and offer a fixed inventory of perishable products which cannot be stored, if unsold at a specific point in time, to a variety of customer groups with different purchasing behaviour. These services are typically sold at different rates or tariffs under different booking conditions to different market segments, through a variety of distribution channels, to cope with demand swings and market trends.

A client calls the hotel reservation office, requesting a discount rate single room from next Wednesday night through Friday. The question is: does the reservation office accept that reservation or not?

If it was the last single room available, it would not like to accept this reservation, IF it projected that between now and Wednesday night there was the likelihood of a booking request from a rack rate transient customer for the same arrival day and number of nights.

Neither would the reservation department want to accept that discount reservation, IF it could anticipate a late-booking request from a customer, who would like to stay from Wednesday through Sunday, since this customer also represents a greater revenue. In fact, a discounted rate for a longer stay may be significantly more revenue than a shorter stay at rack rate.

How does the hotel reservations manager know, how many reservations to take for what type of rooms at what rates or for what arrival and departure dates?

The term “Yield Management” has been coined in the airline industry and its objective is to manage the product inventory (seats on a given flight, rooms for a given night) in such a way as  to maximise revenue. In the airline context, “Yield” is expressed in cents per passenger mile, which is not a very useful definition to be used for non-airline service providers. Yield Management should actually be called “Revenue Management” or “Inventory Control”, since it is revenue, not (airline) yield to be maximised.

Yield or revenue management is not really new to Hoteliers, since physically identical rooms have been sold for higher prices during high season and for lower prices during low season and weekends for generations. This was done by more or less experienced staff with a varying talent to anticipate overall demand at certain days, weeks or periods of the year for a limited supply of rooms.

Yield management (or revenue management) is an economic discipline appropriate to many service industries in which market segment pricing (price differentiation) is combined with statistical analysis to expand the market for the service and increase the revenue “yield” per unit of capacity.

It is the set of demand forecasting techniques, optimisation models, and implementation procedures which collectively determine which reservation requests to accept and which to reject in order to maximise revenue. The principles of yield management had their origins in the airline industry, but have also taken hold widely throughout the rest of the travel industry.

Almost all major lodging corporations, airlines, cruise lines, car rental and passenger railroad firms are practising more or less sophisticated yield management methods, maintain inventory control systems and have either developed their own software and hardware configurations in conjunction with corporate CRS or are currently developing their own systems or screening the market for available integrated or stand-alone yield management software.

The intelligent use of yield management principles can be used to increase bottom line profitability in any service industry possessing the following characteristics:

•  Demand for the service can be divided into distinct market segments and price elasticity varies among the customer segments. The capacity supply is relatively fixed and it is costly or impractical to add or subtract inventory in the short run.

•  The inventory is perishable and cannot be stored to be sold at a later date.

•  The marginal cost of selling an additional unit of inventory is low.

•  The service is ordered in advance of its delivery / consumption.

•  Demand for the service fluctuates and cannot be predicted with a high degree of certainty.

•  The physically (not commercially) identical product can be sold to different market segments for different prices under different booking conditions.

Hotel Lock Management- the sensible solution

Most security conscious hotels all over the world have implemented intelligent hotel lock systems. This security system is specially designed to provide maximum protection at a low operation cost. Hotel Lock Security has proudly replaced more traditional forms of security in most modern hotels all over the world.

Ensuring that hotels are safe, secure and that assets are protected is vital. Not only do guest’s belongings need to be protected but so does company information and materials. Hotel Lock Security ensures that only a person with a valid KeyCard is able to access the room.

This intelligent form of security can be changed and updated if so required by hotel management. Ensuring that the hotel is in control at all times and that both property and guests are not at risk is the responsibility of the hotel. With the help of the easy- to use, easy- to- manage Hotel Lock Management system, there is less to worry about. By providing limited access, management is able to have a firm control on the prevention of fraudulent activities and theft.

The Hotel Lock Security System has the following cards for management control:

  • Guest Cards – restricted access for the duration of stay
  • Program Cards – lock setup and initialization
  • Master Card – management card to open all doors
  • Maids Card – opens doors assigned to the maid for a specific time
  • Clock Card – calibrates the door locks on board clocks
  • Floor Card – opens a designated floor

There are of course various benefits to installing Hotel Lock Management. Many of which offer convenience and peace of mind to managers and hotel owners all over the world.

  • Wireless system installation – easy retro-fit on existing hotels
  • Anti-insert alarm function
  • Durable stainless steel ANSI 5-lever latch technology
  • Can control staff and guest access at all times
  • KeyCards can fit into a wallet or purse- less risk of loosing
  • Lost cards can be deactivated and reissued
  • No training is required for system use

Energy saving devices are available that interface to the Hotel Lock Management System. A guest needs to insert their room card into the room energy saver device to turn on lights, air conditioners, power points etc. On departing the room, the card is removed and similarly the room powers down, saving on unnecessary electricity charges.

With hotel security having moved towards the more technical side, there are many other industries that are slowly adopting the more convenient method of security too. Many companies all over the world are adopting this smart security solution. Hotel Lock Management is not only a convenient method, it is also trust worthy. Unlike keys, KeyCards cannot be cut and duplicated. This hotel lock management system has become an integrated part of over 2000 hotels throughout the world. With a high success rate and a number of satisfied customers, Hotel Lock Security is certainly one of the very best ways to protect hotel property.

There are a number of different areas within a hotel that Hotel Lock Management is able to assist with, when it comes to controlling entry : Public Restrooms, Room Safes, Backend Offices, Kitchens, Gyms, Indoor swimming pools, Games rooms as well as vehicle and Pedestrian Gate Entry and Exit

Keeping unwanted visitors or those not staying at the hotel, out of certain areas, is simple and cost effective.

Segments of hotel sector seen underserved

Although the supply of hotel rooms in Kuala Lumpur is quite adequate, property consultants say some segments of the market are still underserved.

As of 2010, the total supply of 3- to 5- star hotel rooms in Kuala Lumpur stood at 23,972, of which 5-star rooms accounted for 50%.

Zerin Properties chief executive officer Previndran Singhe said the entry of international brands of the likes of Fairmont, W, Four Seasons, Conrad, Bulgari and MGM would augur well for the market.

“There is also room for limited service hotels or branded budget hotels such as Tune Hotels and Holiday Inn Express; ethnic hotels like India’s Taj and Oberoi; eco-tourism products at all luxury levels; and limited serviced apartments in the likes of Citadines,” Previndran told StarBiz.

The supply of true blue serviced residences was also limited, he said, adding that many of them were actually live-in apartments.

CB Richard Ellis (Malaysia) vice-president research, Nabeel Hussain, said there were very few internationally-branded three-star hotel chains within Kuala Lumpur, and some of the larger serviced apartment operators, such as Oakwood, were absent from the market as well. A number of new hotel projects are under development and the most anticipated include the new Grand Hyatt, scheduled to be completed next year, and the St Regis in KL Sentral, scheduled for completion in 2014.

Also in the pipeline are properties managed by All Seasons and Hilton’s Garden Inn, two internationally-known budget hotel brands.

Nabeel said a number of the large international groups, such as Accor, Hilton and Starwood, have a significant presence in Kuala Lumpur and appear to be looking to increase their hotel portfolio.

On hotel room rates, Previndran said rates in the luxury sector were still underperforming and were expected to increase.

“As globalisation sets in further, borders will be blurred and we will see parity setting in with our neighbours,” he pointed out.

Nabeel said generally, any increase in hotel room rates needed to start with the top-end properties and anticipated that properties such as the Grand Hyatt would set a new benchmark for the top end of the market.

“At the moment, Kuala Lumpur has some of the lowest room rates for five-star properties in the region,” he added.

In its latest quarterly report on Kuala Lumpur’s hospitality market, CB Richard Ellis Research said drivers for increased business and tourism spending might come from an improving economy (2011 GDP growth is projected to be 6%-6.5%) and a number of new initiatives being considered by the government.

It said the opening of the Pullman Kuala Lumpur Bangsar (Accor’s largest hotel in Southeast Asia with 515 rooms) later this year and the Grand Hyatt in 2012 might lift rates at the upper-end of the market, which could then have a knock-on effect in the 3- and 4-star hotel categories and also the service apartment segment, which competes for many of the same customers.

The luxury segment of the hospitality market, comprising mostly 5-star hotels, recovered in 2010 as full-year average occupancy for 5-star hotels reached 68%, up from 2009′s 58%.

CB Richard Ellis said although average room rates were lower in 2010 than in 2009, the net effect was positive, as revenue per average room (RevPAR) for this segment was RM224 in 2010 compared with RM196 in 2009, an increase of 14%.

In fact, RevPAR for all three segments of the market 3-star, 4-star and 5-star – improved in 2010.

Knight Frank Research said supported by concerted government efforts to attract more foreign tourists through innovative tourism packages and products, the hospitality sector was expected to continue to grow steadily into the first half of 2011.

It added that under Budget 2011, an allocation of RM85mil has been made for the provision of infrastructure facilities to facilitate construction of hotels and resorts in remote areas.

Another RM50mil allocation is to build covered walkways in the KLCC-Bukit Bintang area.

E-Soft Hotel Management System Features

E-Soft Hotel Management System Features

1. System Architecture – Client & Server BasedThe Client & Server Based Architecture provide the following advantages:

a. Database security – easy to manage the security because policy make in server & apply to all clients.  The powerful date encryption & decryption of the database & password protection will help to protect the data.

b. High Performance – The speed is fast due to Table & Index Partitioning, Ultra Fast Load Utilities, Distinctive Memory Cache & Full Text Indexes.

c. Scalability – Able to handle massive database, terabytes of information & allows server connection via Local Area Network (LAN) or Wide Area Network (WAN).

d. Easy To Backup – Easy to backup using either Server Mirroring or our E-Soft Auto Backup System.  Auto Pilot schedule backup features are available.

2.  Security System – Powerful and easy to use security system makes software features invisible for users who don’t have access to them.Every user will has a unique User ID & Password, and system will be able to track the activities carried out by each users in our Audit Trial modules.The Audit Trial will track the Date & Time for every record which have been added, edited or deleted into the Hotel Management System.  It also will shows the before & after changes transaction.

3.  User Friendly Interface – Users can ease learning fears by making the system appear to be very user friendly by “Right Click” to drill down to information they required.

4.  Group Management & OperationThe complex operation is made very easy here. With essential minimum of entry, one can complete the entire group check in with a single click. Payment and charges can be easily assigned to multiple rooms from the same familiar interface.

5. Hotel Door Lock IntegrationE-Soft Hotel Management System can easily be integrated with a key card door lock encoder. Upon checking in, hotel front desk will be able to create a door lock key card in Check In module, which will valid only during guest’s stay.Return key will be updated in the E-Soft Hotel Management System, and the system also provide recycle key card & read key card function.These cards can be used for door access to the hotel.

6. Quick Check In with MykadIn the busy hours of check out, check in, usually front desk staff finds little time to complete guest information. Our software has come out with a fast solution. The data can be captured through guest’s identity card with a Mykad Reader directly without keying. The data captured including the I/C No., Name, Address, Gender, Race & even the photo of the guest.

7. PABX Call Billing IntegrationThe E-Soft Hotel Management System allows integration to PABX Call Billing System.  E-Soft Call Billing System is one of the most widely-used call billing systems in the hotel industry, due to its innovative features, easy-to-use Windows interface and unparalleled tools for reporting, billing and managing administrative from guest phone calls.All telephone calls made from a hotel room are automatically charged to the room. The most common charging method is by the number of spent telephone impulses, or by area codes. All telephone charges can be billed on the room or individual guest. The PABX Call Billing System will automatically charge the guest’s calls to the hotel room before the guest check out.Software Features:Automatic call posting to the E-Soft Hotel Management System and internal storage of callsReal-time call tracking and reportingCustom define the call rate by call type (Local Call, Mobile Phone or Oversea Call)Easy install and useCompatible with all major hotel PBX systemsCurrent call reportsSupport COM Port or TCP/IP connection to PABX server.

8. Environmental Friendly   (Built in Email & SMS toward Paperless Management)Recently, more and more hotels are pursuing green business practice by eliminate paper usage in the daily operation.  The reason is not only because it is environmental friendly, but also enjoyed a substantial cost saving with paperless management.E-Soft Hotel Management System built in the Email & Text SMS features in line with the implementation of paperless management.Confirmation Letter for room reservation can be sent out directly to the guest through E-Mail by clicking the Send Email button.A text message to confirm the guest booking with reservation details can also be sent out to the guest hand phone.  System prompt the default text with guest reservation information, but hotel front desk still can do some editing to the text.

9. Event ManagementEvent Management is an integral part of the hotel business, where meetings, seminars and dinner functions require close attention to diverse customer demands. Planning and co-ordination of the property services and resources are crucial for staging such events and necessitate access to detailed information including dissemination to the respective departments.An effective event management solution which manages both the smooth operation of the business and also automates the sales process is simply a necessity in this competitive and fast-paced era.The key factors ensuring future success are:Efficient inquiry-handling and tracking of sales activities.Excellent calendar management to make the fastest decisions on availability.Reliable guest information on bookings, preferences, and billing dataThe Event Management module in E-Soft Hotel Management System is an automated module that manages all aspects of events including:Event Reservation & Marketing – Prepare Performa Invoice, Event Booking & Deposit Collection.Maintaining the guest information for the event.Guest room reservation & room assignment according to guest list provided.Function Room or Hall Reservation.Food & Beverage Reservation.Event Arrangement by department, eg. Maintenance Dept, House Keeping, Front Desk & etc.Generate the Event Order.Billing & Invoicing.Event Calendar show the reservation status by calendar day.  Double click on the Event No. to view the Event Reservation page.Hall Reservation shows the hall booking status by date & time.  Double click on the Event tab to access the Hall Reservation details.

10. SMS Broad Casting MarketingSMS Marketing is a rapidly growing marketing technique that is widely available to a broad range of consumers. SMS stands for Short Messaging Service and is more commonly known as text messaging, mobile messaging, or alphanumeric paging. Bulk SMS is the sending of a mass SMS text message to your guest list of mobile devices, usually cell phones. Also known as wireless marketing, bulk SMS is gaining in popularity with most of the world’s largest companies finding it a useful and cost-effective means of reaching consumers.SMS marketing is a cost-effective method of reaching your visitors with messages such as:Promotion PackagesFestival Greeting MessageReminders of bookingsReminders of check in timesPackage Upsells – offers, menus etcTarget specific guests at specific times with specific messagesIncrease personal relationship with guests.