Revenue Management FAQs


How does the Reservation and Rotation System Work?

To maximize return on investment for all Beaver Creek Lodge homeowners and to ensure equal rental division and parity, the units are rented on a rotation system. The resort uses a rental rotation system that is based on occupied monthly income. All available lodging units (1 bedroom suites and 3 bedroom condominiums) are on-site at the Beaver Creek Lodge.

There are many variables that can cause units to earn differing revenues. Some examples include group occupancy, owner occupancy, and midweek vs. weekend occupancy, special unit requests, and cancellations.


What is ADR?

Average Daily Rate measures the average price for which units are renting. The formula for ADR for a given period is Total Revenue divided by Total Room Nights. ADR is a good measure in helping understand the pricing structure, but it is not the most important measure for maximizing overall revenue. In theory, we could achieve a fantastic ADR by doubling prices, but that does not take overall occupancy into consideration. If we cut our occupancy in half by doubling prices, we have not accomplished much.


What is REVPAR?

Revenue Per Available Room is the revenue generated based on the total number of room nights available. The formula for REVPAR is Total Revenue divided by Total Available Rooms. REVPAR is a much better measure to gauge the overall success of a management plan. REVPAR takes overall occupancy into consideration making it important to find a balance between price and occupancy.

Consider the following example:

I have a hotel with 100 rooms. If I sell 30 rooms at an ADR of $189, my REVPAR for that night is $56.70. If however, I can sell 75 rooms by dropping my ADR to $159, my REVPAR is $119.25. The same concept applies to individual units. In February we have 28 opportunities to sell your unit. If we maintain an ADR of $189 and sell your unit 15 nights, your REVPAR is $101.57. If we drop your ADR to $159 to sell your unit 20 nights, your REVPAR increases to $113.57, for monthly revenue increase of 12%.


How does Revenue Management set pricing for different units?

It is important to begin by saying that effective pricing is based on market demands, not on rental price. The consumer has a threshold for how high they will go, based on the value of a given unit, and the demand for a particular period. It is our job to ensure we are not selling your product for less than the consumer is willing to pay. This is referred to as ‘Revenue Dilution’. When setting rates, we take a number of factors into consideration, including historical performance, weather patterns, competition and the economy.

We look at each day of the year and set rates as high as the value of the unit and demand for the period will allow. If demand for a particular period is low, it may be necessary to reduce the rate in order to stimulate bookings, this is especially important during the nonpeak seasons: summer months, non-holiday winter season, and many midweek periods. Please take into consideration that this is all variable depending on unit type.


How does Revenue Management forecast occupancy patterns?

Occupancy patterns are forecasted using a number of tools; the first being what the occupancy was the year prior during a specific period of time. Next we look at the market trends in the area; are there generally more people coming to the resort this year than the prior year, are more people traveling this year? This is analyzed through different research reports, and by looking at demand measuring call volume and website activity.   Finally, we look at special events, and large conventions and conferences that would potentially attract people to the resort. For example, if a large convention or conference occurred then we would expect a higher occupancy during a similar event the following year.


How do demand patterns affect the pricing for my suite?

As demand patterns fluctuate, so do the rental rates. However, high demand does not always equal high price. In times of low demand, it is important to keep price consistent with competition. This means that we do not decrease the rate so much that we are ‘leaving money on the table’ as guests would have rented the unit anyway. Similarly, during high demand times such as a popular convention we do not want to set the prices so high that we drive our guests to stay with the competition. Therefore, when pricing your condominium we look at the demand pattern, our competition’s prices, and special events.


What is Promotional Use and how is it accounted for?

Certain Marketing, Group Sales or Public Relations initiatives require the respective departments to provide complimentary lodging to different sponsors, media personnel, trip leaders, etc. This complimentary lodging is used in many cases in exchange for promotion of Beaver Creek Lodge. It is this complimentary lodging that is recorded as ‘complimentary nights’ on your owner statement. Each homeowner, as stated in the contract, is required to provide (4) complimentary room nights in their unit on any given calendar year to the resort to distribute appropriately. (Please refer to Section 5.4 in the Rental Management Agreement).


How can I best maximize the rental income from my vacation home?

Stay informed of peak demand time periods, avoid booking yourself or your friends during peak times where forecasted occupancy is generally high, and communicate any room night reductions or cancellations to the Homeowner Liaison at 970.845.1716.


Can I still book my condominium during peak demand dates?

Yes you can, if the unit is available or if it is possible to move an existing reservation to another unit to accommodate the guest. As per your rental management agreement, Section 6, part 6.2, all winter vacation reservations must be made prior to August 31 of that year. If you would like to make a reservation with less notice, you can personally phone in a reservation to the Homeowner Liaison at 970.845.1716. We will always try our best to fulfill an owner request.

NOTE: Owner occupancy reduces the overall opportunity for revenue and this is even more dramatic during peak occupancy periods. With the supply and demand theory, when demand is the highest (many holiday weekends), the potential revenue we can achieve is also, by far, the highest. This should be considered in determining dates for your personal use.


What is the best way to obtain availability information for my condominium?

For information specifically about the availability of your condominium or to make reservations for yourself or your guests, please contact our Homeowner Liaison.


When should I notify you my travel plans have changed?

As soon as possible, if any aspect of your reservation changes; days of stay increase, decrease, or shift, we ask that you notify the Homeowner Liaison to inform us of your change in plans. This is even more important during the highlighted peak demand dates as our availability and reservation flexibility becomes limited and we strive to accommodate our homeowners as well as our paying guests’ requests.


How much time do you need to rent my unit if I cancel any or all of my reservation?

Looking at the booking patterns; paying guests usually book their unit between 3–5 weeks in advance in off peak seasons, and 2–4 months in advance in peak seasons. Therefore, please let us know promptly that you will no longer be using your condominium so we have the opportunity to rent it to a paying guest. For peak seasons, letting us know further in advance is best.