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Hotel Marketing Plan
Riverview Hotel
This sample marketing plan was created with Marketing Plan Pro software.
Financials
Our annual marketing budget is $100,000. Sales are anticipated to achieve revenue of $1,172,925. Our marketing expenses will equate to approximately 8.5% of the overall revenue.
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Break-even Analysis
Fixed Costs
| Fixed Costs | |
| Cost | |
| Rent or Lease | $0 |
| Professional Services | $1,000 |
| Payroll | $10,000 |
| Interest Payments | $2,000 |
| Utilities & Telephone | $5,000 |
| Non-discretionary marketing expenses | $0 |
| Other | $0 |
| Total Fixed Costs | $18,000 |
Break-even Analysis
| Break-even Analysis | |
| Monthly Units Break-even | 145 |
| Monthly Revenue Break-even | $19,929 |
| Assumptions: | |
| Average Per-Unit Revenue | $137.14 |
| Average Per-Unit Variable Cost | $13.28 |
| Estimated Monthly Fixed Cost | $18,000 |
Sales Forecast
Room revenue for this year is based on an average growth rate of 10%. This is based on the number of pre-contracted corporate rooms, and an anticipated return to business levels projected.
Sales Forecast
| Sales Forecast | |||
| FY 2006 | FY 2007 | FY 2008 | |
| Unit Sales | |||
| Corporate Single | 1,925 | 2,118 | 2,118 |
| Corporate Double | 3,665 | 4,032 | 4,032 |
| Corporate Deluxe | 2,695 | 2,965 | 2,965 |
| Corporate Suite | 268 | 294 | 294 |
| Total Unit Sales | 8,553 | 9,409 | 9,408 |
| Unit Prices | FY 2006 | FY 2007 | FY 2008 |
| Corporate Single | $95.00 | $95.00 | $99.00 |
| Corporate Double | $125.00 | $125.00 | $135.00 |
| Corporate Deluxe | $175.00 | $175.00 | $195.00 |
| Corporate Suite | $225.00 | $225.00 | $240.00 |
| Sales | |||
| Corporate Single | $182,875 | $201,210 | $209,633 |
| Corporate Double | $458,125 | $504,000 | $544,253 |
| Corporate Deluxe | $471,625 | $518,875 | $578,175 |
| Corporate Suite | $60,300 | $66,150 | $70,560 |
| Total Sales | $1,172,925 | $1,290,235 | $1,402,620 |
| Direct Unit Costs | FY 2006 | FY 2007 | FY 2008 |
| Corporate Single | $7.86 | $11.00 | $11.00 |
| Corporate Double | $13.92 | $13.50 | $13.50 |
| Corporate Deluxe | $17.50 | $18.50 | $18.50 |
| Corporate Suite | $0.84 | $0.00 | $0.00 |
| Direct Cost of Sales | |||
| Corporate Single | $15,138 | $23,298 | $23,293 |
| Corporate Double | $51,033 | $54,432 | $54,425 |
| Corporate Deluxe | $47,163 | $54,853 | $54,853 |
| Corporate Suite | $225 | $0 | $0 |
| Subtotal Direct Cost of Sales | $113,558 | $132,583 | $132,570 |
Expense Forecast
Marketing expenses are projected to be approximately 8.5% of overall annual revenue. The breakdown of expenditures is as follows:
Marketing Expense Budget
| Marketing Expense Budget | |||
| FY 2006 | FY 2007 | FY 2008 | |
| Print Advertising | $10,600 | $11,600 | $12,826 |
| Internet Advertising | $21,000 | $23,100 | $25,410 |
| Public Relations | $6,000 | $6,600 | $7,260 |
| Other | $21,000 | $23,100 | $25,410 |
| ------------ | ------------ | ------------ | |
| Total Sales and Marketing Expenses | $58,600 | $64,400 | $70,906 |
| Percent of Sales | 5.00% | 4.99% | 5.06% |
Linking Expenses to Strategy and Tactics
Our marketing expense is structured to reflect the corporate strategy differentiation. Quarterly travel trade publications and interim monthly press ads communicate our message to key corporate clients in one of our most significant target markets. Monthly Internet advertising expenses include banner ads, and strategic links with car hire, airline and destination management companies' websites to drive business to the hotel. Direct mail activity builds our targeted customer database, not only in terms of improving the quality of the data we currently hold, but on increasing the size of the database with prospective customer information. Public relations expenses cover PR events, participation at local functions and sponsorship funds. Overall, the percentage of total revenue required to support the marketing expense is considered a moderate amount.
Contribution Margin
Contribution margins should increase due to:
- Differentiation/focus strategy increases ability to specialize.
- Maintenance of expenses within specified levels.
- Increased efficiency in capacity utilization.
- Economies of scale due to increased purchasing efficiencies.
Contribution Margin
| Contribution Margin | |||
| FY 2006 | FY 2007 | FY 2008 | |
| Sales | $1,172,925 | $1,290,235 | $1,402,620 |
| Direct Cost of Sales | $113,558 | $132,583 | $132,570 |
| Other Costs of Sales | $0 | $0 | $0 |
| ------------ | ------------ | ------------ | |
| Total Cost of Sales | $113,558 | $132,583 | $132,570 |
| Gross Margin | $1,059,368 | $1,157,653 | $1,270,050 |
| Gross Margin % | 90.32% | 89.72% | 90.55% |
| Marketing Expense Budget | FY 2006 | FY 2007 | FY 2008 |
| Print Advertising | $10,600 | $11,600 | $12,826 |
| Internet Advertising | $21,000 | $23,100 | $25,410 |
| Public Relations | $6,000 | $6,600 | $7,260 |
| Other | $21,000 | $23,100 | $25,410 |
| ------------ | ------------ | ------------ | |
| Total Sales and Marketing Expenses | $58,600 | $64,400 | $70,906 |
| Percent of Sales | 5.00% | 4.99% | 5.06% |
| Contribution Margin | $1,000,768 | $1,093,253 | $1,199,144 |
| Contribution Margin / Sales | 85.32% | 84.73% | 85.49% |
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