A Customer Loyalty & Profitability Management Tool

This simulator will help you understand how changes in facilities, services and price will affect market share and profits.

The simulator is based on the results of an actual Discrete Choice Modeling study. The model was used to create a simulator so that the client user may create and test "what if" scenarios to see the market share and profits that result from changes made to facilities, service levels and price.

The simulator automatically calculates the costs and revenues associated with your facility, service level and price changes, displaying the effects to the client hotel in the "Our Hotel Economic Profit" chart located in the upper right-hand side of the simulator. The economic profit is based on the revenue outcome of changes in market share and price, along with the costs or savings incurred by changing the hotel facilities and services. The cost of capital is also considered in the economic profit calculation.

The model was turned into a simulator so that the user may play "what if" games to see the market share and profits that result from changes in facilities, service levels and price.

Description

The simulator is divided into three sections.

Top

The top section is always visible and contains two graphs: Market Share and Economic Profit (revenue and costs). These graphs provide a visual representation of the net effect of the various scenarios you enter in the bottom section.

The Market Share graph shows the effect of changes in the Working Case for Our Hotel and a competitor. Blue represents current market share while green represents the share gained and red represents share lost.

The Economic Profit graph shows the effect of changes in the Working Case for Our Hotel. The bar on the left (Working Case) shows the amount of profit gained or lost as it compares to the bar on the right (Base Case).

Middle

The middle section provides a table of the net effect on market share as a result of various scenarios you enter in the bottom section. The table compares your market share to your competitors’ market share in the new situation, the Working Case, and the current situation, the Base Case.

Bottom

The bottom section contains two columns under the heading Market Share Simulator—Factors. This is where you make changes to services and price to be entered into the model. If necessary, you can correct the Base Case on the right to accurately reflect the current situation. To test new service and price scenarios, make service and price changes to the Working Case on the left.

Instructions for the Bottom Section where adjustments are entered

To change one or more services and prices listed on the left, click on the arrow so a drop down list appears and select your choice.

Note: Two factors (Price and Room Service Speed) do not have Down arrows. For Price and Room Service Speed, type in the desired amount of dollars or minutes, respectively.

Once a change is made to any variable in the Working Case column, the effects will be seen in the Market Share table (middle) and in the Market Share and Economic Profit graphs (top).

Begin the Simulator - (Press "OK" when asked to enable macros)