Crunching Numbers: Budgeting and Forecasting

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  • Lesson Identification and TEKS Addressed

    Cluster : Hospitality and Tourism

    Course : Travel and Tourism Management

  • TEKS Student Expectations

    • (1) The student gains academic knowledge and skills required to pursue the full range of career and postsecondary education opportunities within the travel and tourism industry. The student is expected to:
      • (D) calculate correctly using numerical concepts such as percentages and estimations in practical situations
    • (3) The student solves problems using critical thinking skills independently and in teams. The student is expected to:
      • (C) use principles of budgeting and forecasting to maximize profit and growth for travel and tourism establishments
    • (5) The student understands roles within teams, work units, departments, organizations, inter-organization systems, and the larger environment of the travel and tourism industry. The student is expected to:
      • (D) develop and manage plans to accomplish organizational goals
    • (11) The student uses technical knowledge and skills required to pursue careers in the travel and tourism industry. The student is expected to:
      • (A) develop job-specific technical vocabulary
  • Basic Direct Teach Lesson

    Instructional Objectives

    • understand the revenue management concept
    • describe the responsibilities of the revenue manager
    • identify principles of budgeting and forecasting to maximize profit
    • understand the factors that influence revenue management
    • calculate various numerical concepts to better understand forecasting and revenue management
  • Rationale

    Today’s world is very competitive and most companies have to manage their business very closely in order to make it a success. Part of that management is predicting or forecasting the revenue and costs for the company. Today, we will examine the importance of maximizing profit by forecasting and managing revenue. We will prepare a simple revenue forecast for an imaginary company that will assist you in a career in travel and tourism.

  • Duration of Lesson

    Three 45 minutes lessons

  • Word Wall

    AR or Average Rate: The average of all the room rates together that have been sold for one night

    Budget: A guideline for spending money

    Demand: The total amount of a good or service consumers want to purchase at a given price

    Forecasting: Prediction or estimation of a future event for a given time period

    Revenue: The actual money a company receives during a specific period including discounts and deductions for returned products

    Supply: The total amount of goods or services available for sale. For example, the number of rooms a hotel has available

    Occupancy rate: A ratio of guest rooms/seats sold to those that are available. For example, an occupancy rate of 60% means that 60% of the flight’s available seats have been sold for the time period

  • Materials/Specialized Equipment Needed

    Equipment:

    • computer with projector for PowerPoint™ presentation
    • computers with Internet access (Be sure to follow district guidelines for internet access.)
    • presenter remote
    • light projector (Elmo)

    Materials:

    • samples of:
      • balance sheets
      • budgets
      • forecasts
      • profit and loss statements
      • work schedules

    Supplies:

    • calculators

    —-

    • copies of handouts (see All Lesson Attachments tab)

  • Anticipatory Set

    Before class begins:

    Become familiar with the teacher resource Fun Time Cruise Line Quarter Revenue Forecast Instructions (see All Lesson Attachments tab) so that you will understand the calculations in the Guided Practice section.

    Display as many items from the Materials or Specialized Equipment Needed tab as you have available on a table in front of the room so that students may view as they enter.

    Distribute the handout Anticipation Guide – Crunching Numbers: Budgeting and Forecasting (see All Lesson Attachments tab) and instruct students to read each statement and place a check mark to the right of each statement they THINK is true. At the conclusion of the lesson the students will reread each statement and place a check mark to the left of the statements they KNOW are true. They should also provide information that PROVES other statements which are not true.

    Ask students the following questions:

    Imagine yourself opening a cruise line.

    • How would you know how many employees to hire?
    • How would you know how much food to order?
    • Would you know how much promotion and advertising to budget?
    • How many rooms will you be able to fill each cruise?

    Allow time for discussion.

  • Direct Instruction with Special Education Modifications/Accommodations

    Introduce lesson objectives, terms and definitions.

    Introduce the PowerPoint™ Crunching Numbers: Budgeting and Forecasting (see All Lesson Attachments tab) and begin discussion with students.

    Distribute graphic organizer Crunching Numbers Notes (see All Lesson Attachments tab). Students will be expected to take notes during the slide presentation.

    Announce to students that there will be a quiz at the end of the lesson.

    Individualized Education Plan (IEP) for all special education students must be followed. Examples of accommodations may include, but are not limited to:

    • highlighted materials for emphasis
    • provide printed slide presentation for assistance with note-taking

  • Guided Practice with Special Education Modifications/Accommodations

    Distribute calculators and the handout Fun Time Cruise Line Quarter Revenue Forecast (see All Lesson Attachments tab).

    Display a copy of the handout on a light projector and explain how to forecast revenue for the Fun Times Cruise Line.

    Refer to the teacher resource Instructions: Fun Time Cruise Line Quarter Revenue Forecast (see All Lesson Attachments tab) to figure the calculations.

    Individualized Education Plan (IEP) for all special education students must be followed. Examples of accommodations may include, but are not limited to:

    • provide oral instructions
    • work with a peer tutor

  • Independent Practice/Laboratory Experience with Special Education Modifications/Accommodations

    Distribute the handout Flight Revenue Forecast (see All Lesson Attachments tab). Students will work independently to complete the worksheet and answer the questions.

    Remind students there will be a quiz at the end of the lesson.

    Individualized Education Plan (IEP) for all special education students must be followed. Examples of accommodations may include, but are not limited to:

    • reducing the length of assignment
    • extended time for assignment
    • work with a peer tutor

  • Lesson Closure

    Review lesson objectives, terms and definitions.

    Re-distribute the handout Anticipation Guide – Crunching Numbers: Budgeting and Forecasting (see All Lesson Attachments tab) and instruct students to reread each statement and place a check mark to the left of the statements they KNOW are true. Instruct them to provide information the PROVES other statements which are not true.

  • Summative/End of Lesson Assessment with Special Education Modifications/Accommodations

    Students will be assessed with the handout Crunching Numbers: Budgeting and Forecasting Quiz (see All Lesson Attachments tab).

    Individualized Education Plan (IEP) for all special education students must be followed. Examples of accommodations may include, but are not limited to:

    • oral responses
    • use of notes

  • References/Resources

    Images:

    • Microsoft Office Clip Art: Used with permission from Microsoft.
    • Shutterstock™ images. Photos obtained with subscription.

    Textbooks:

    • Hayes, D. K., & Ninemeier, J. D. (2004). Hotel operations management. Upper Saddle River, NJ: Pearson/Prentice Hall.
    • Reynolds, J. S. (2010). Hospitality services: Food & lodging. Tinley Park, IL: The Goodheart-Willcox Compan
  • Additional Required Components

    English Language Proficiency Standards (ELPS) Strategies

    • add terms and definitions to personal dictionary
    • journal entries
    • use “word wall” for vocabulary words
    • work with a peer tutor
    • peer to read materials
    • highlighted materials for emphasis
    • shortened simplified instructions
  • College and Career Readiness Connection

    AchieveTexas Career Cluster Crosswalks

    The Career Cluster Crosswalks housed on the AchieveTexas website http://www.achievetexas.org/index.html provide Texas teachers with a direct connection between their CTE course TEKS and the College and Career Readiness Standards (CCRS). Language Arts, Mathematics, Science, Social Studies and Cross-Disciplinary integration are the focus of the CCRS. These college and career readiness standards are essential in the planning and delivery of CTE lessons. The extent to which the integration occurs is determined by the methods and strategies utilized by each teacher.

    Career Cluster Crosswalks for Education and Training, Hospitality and Tourism and Human Services Career Clusters can be found at:
    http://www.achievetexas.org/Career%20Cluster%20Crosswalks.htm

  • Other Essential Lesson Components

    Enrichment activity

    • Students can create quick response codes (QR codes look like a square with small black square dots) for travel related websites.
    • Students can describe a new smart phone application for travel in the future.

    Infographic:

    Infographics are graphic visual representations of information, data or knowledge intended to present complex information quickly and clearly.

    The infographic below is related to this lesson. Allow students to view the image on a projector and lead a discussion concerning the information provided.

    TED Talk:

    TED is a nonprofit organization devoted to spreading ideas, usually in the form of short, powerful talks (18 minutes or less).

    The video below is in-directly related to this lesson.

  • Family/Community Connection

    Students can invite a small businesses in their area, possibly a travel agency, to their class to speak about the importance to their business to forecast revenue and expenses and how it is done. They can also include strategies for maximizing revenues in the talk.

  • CTSO connection

    Family, Career, Community Leaders of America (FCCLA)

    http://www.texasfccla.org

    • Hospitality, Tourism and Recreation
      An individual or team event – recognizes participants who demonstrate their knowledge of the hospitality, tourism and recreation industries and ability to translate their knowledge into a hypothetical or real business. Project must relate to culinary, lodging, recreation, tourism or event coordination.
    • Interpersonal Communications
      An individual or team event – recognizes participants who use Family and Consumer Sciences and/or related occupations skills and apply communication techniques to develop a project designed to strengthen communication.
  • Service Learning Projects

    Successful service learning project ideas originate from student concerns and needs. Allow students to brainstorm about service projects pertaining to this lesson.

    www.ysa.org

    Possible ideas:
    Students can research best practices for personal budgeting and put together a seminar for other students on how to live on a small budget.

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