Download CHIA Certification Exam with Complete Solution and more Exams Business Systems in PDF only on Docsity!
CHIA Certification Exam with Complete
Solution
What are the different kinds of affiliations a single hotel can have? - Correct answer Chain Parent Company Operation: Corporate, Franchise, or Independent Management Company Owner Asset Management Company Membership or Marketing Groups What does a chain represent? - Correct answer The hotel brand There are __ chains in the US with 50,000 rooms or more and __ chains in the world with 75,000 rooms or more - Correct answer 22; 24 Most people agree that _______ was the first chain. - Correct answer Holiday Inn Parent Companies - Correct answer Consist of multiple chains; often the parent company will havea variety of different types of chains T/F A parent company may have a range of high-end, middle, and low-end chains; or they may concentrate in one area - Correct answer True What is the top parent company in the US? - Correct answer Hilton Worldwide Corporate hotel - Correct answer A chain hotel owned or managed by the chain or the parent company Franchise hotel - Correct answer A chain hotel run by a 3rd party where the chain receives some sort of franchise fee Independent hotel - Correct answer Not affiliated with a chain or parent company Of the 3 basic types of hotel operations (corporate, franchise, and independent), which one has the most US properties? Which one has the least? - Correct answer Most=Franchise Least=Corporate Of the 3 basic types of hotel operations (corporate, franchise, and independent), which one has the most worldwide properties? Which one has the least? - Correct answer Most=Independent Least=Corporate
What is the ratio of chain hotels vs. independent hotels in the US? - Correct answer 70% are chain; 30% are independent What is the ratio of chain hotels vs. independent hotels worldwide? - Correct answer 40% are chain; 60% are independent Management company - Correct answer Operates a hotel for another party; the company has a management contract where it receives payment/some portion of profits T/F Some chains or parent companies manage their own hotels - Correct answer True Owner companies - Correct answer There are many companies that own multiple hotels Asset management company - Correct answer Represents the owner in the operation of a hotel T/F A hotel cannot have both a management company and an asset management company - Correct answer False. They can. T/F The Holiday Inn and Holiday Inn Express are 2 different chains - Correct answer True What are the 3 classifications of operation types? - Correct answer 1. Corporate
- Franchise
- Independent T/F There is a very strong trend for US hotels to expand internationally because the opportunity for large US chains is there - Correct answer True Describe the average independent hotel in the US - Correct answer Classified as Economy, Located in a Suburban area, and has 25 rooms or less Most of the entities below are classified as chains. Which one is a parent company consisting of multiple chains? A. Hampton Inn B. Motel 6 C. Choice D. Holiday Inn Express - Correct answer C. Choice Which is a true statement about parent companies? A. They and their related chains have changed over time B. They must consist of no more than 5 chains. C. They can only consist of chains in a single Scale. D. They can only have hotels in a single country. - Correct answer A. They and their related chains have changed over time
The US is broken up into _____ geographic areas called markets - Correct answer 163 T/F Markets can cross state borders - Correct answer True There are _____ tracts in the US - Correct answer 628 Revisions to markets and tracts are made at the _______. - Correct answer end of the year (after Dec. and before Jan.); changes are not made during the year Tracts - Correct answer Geographic sub-divisions of a market There may be anywhere from ___ to ___ tracts in a market - Correct answer 2- In a metro market, there is usually a tract from the downtown area, sometimes called the _________ - Correct answer Central Business District Outside of North America, the term ______ is used instead of Tract. - Correct answer Submarket What are the revisions to markets and tracts based upon? - Correct answer -Supply (new hotels opening) -Participation (new hotels submitting performance data) -Client feedback T/F STR uses the UNWTO definitions when it comes to recognizing countries - Correct answer True T/F No market will ever cross country borders - Correct answer True What are the 7 Scale categories? - Correct answer 1. Luxury chains
- Upper upscale chains
- Upscale chains
- Upper midscale chains
- Midscale chains
- Economy chains
- Independents What is the average ADR for Luxury chains? - Correct answer $ What is the average ADR for Economy chains? - Correct answer $ What is the average ADR of the Independent Scale group? - Correct answer $
T/F When a chain is categorized in a specific Scale group, that means every hotel in that chain is in that Scale group everywhere in the world, in every country and market. - Correct answer True Chains are positioned in Scale groups based upon what? - Correct answer ADR How are chains sorted by their ADR amount? - Correct answer From high to low T/F Breakpoints between Scale groups stay the same every year - Correct answer False. They may move up and down slightly from year to year What's the difference between Class and Scale categories? - Correct answer The class category has no "independent" class group; so there's only 6 class categories, instead of 7 How do Independent hotels fit into different Class categories? - Correct answer They're slotted into the Scale categories (Luxury through Economy) at similar ADR levels T/F Chain hotels are always in the same Class as Scale. - Correct answer True. A Ritz- Carlton will always be in the Luxury class group since it's in the Luxury Scale group Class is used globally, but is especially popular where? - Correct answer Outside of North America where there are more independent hotels When are independent hotels grouped into Classes? - Correct answer At the beginning of the year based on the annual data for the prior year What is the ADR range for Luxury chains? - Correct answer $150-$ What is the ADR range for Upper Upscale chains? - Correct answer $120-$ What is the ADR range for Upscale chains? - Correct answer $100-$ What is the ADR range for Upper Midscale chains? - Correct answer $85-$ What is the ADR range for Midscale chains? - Correct answer $70-$ What is the ADR range for Economy chains? - Correct answer $55-$ Urban area - Correct answer Large metro cities Suburban area - Correct answer The suburbs of metro cities Airport area - Correct answer Close to a major airport Interstate area - Correct answer Close to a major highway
Hotel staff historically performed _______, where they would talk to staff from competitive hotels - Correct answer "call arounds"; They also used to count cars in parking lots or windows with lights on _________ means finding the averages based on the data from a group of hotels so that each individual hotel is protected from exploitation of their specific data - Correct answer Aggregating What is the most recent case that involved anti-competition actions? - Correct answer 5 La Quinta hotels in Conneticut in April 2010 When are comp sets created? - Correct answer They're created by the time the hotel opens. Sometimes they're created long before the hotel opens while it is still under construction. that way the new hotel staff can track the performance of the comp set prior to the opening of the hotel Who are the stakeholders when choosing a comp set? - Correct answer -Management company -GM -Chain company -The sales and marketing team What are the 4 P's you must think of when deciding upon a comp set? - Correct answer Participation Proximity Pricing Product Participation means 4 different types of data. What are they? - Correct answer Monthly Daily Segmentation (many hotels submit Rooms Sold and Revenue broken down by Transient, Group, and Contract) Additional Revenue (some hotels submit Food and Bev and Other Revenue in addition to Room Revenue) T/F When it comes to Class (and Scale), higher end hotels tend to select competitors that are below them in their Comp Set and vice versa. - Correct answer True What are the key elements of Product (when choosing a comp set)? - Correct answer Number of Rooms Open Date Hotel Type Meeting Space Amenities
What is the first rule in creating comp sets? - Correct answer Sufficiency. In North America, comp sets must include 3 or more hotels in addition to the subject (though they're encouraged to have at least 4 or more). Outside of North America, comp sets must include 4 or more hotels in addition to the subject. Explain the rule of "percentage checks" when creating comp sets. - Correct answer Help to ensure that the data of a single hotel, chain, or company is not isolated. Comp set rule: No single property or chain can account for more than ____% of the total participating room supply of a comp set (____% outside of America). - Correct answer 40%; 50% Comp set rule: No single company can account for more than ____% of the total participating room supply of a comp set. - Correct answer 60% The average number of hotels in a primary comp set is between ____ - Correct answer 5- Explain the "Nameback" percentage - Correct answer In the US, only 45.13% of the properties in your primary comp set name you in their primary comp set Explain the "Reverse Comp Set" - Correct answer The specific properties that name your hotel in their comp set The avg. US hotel is named as a competitor by ____ hotels that aren't in its comp set - Correct answer 2. Why are comp sets changed? - Correct answer -Changes in the subject hotel (i.e. renovation, new management, contract changes, etc.) -Changes in the market (i.e. new competitive hotels open) -Strategic changes (i.e. repositioning, improving comp set strength) When are comp sets changed? - Correct answer You can change your comp set at any time, although many people wait until the beginning of the year What are the rules related to changes that address "isolation" issues (comp sets)? - Correct answer -If a property wishes to change their comp set, they must do so by a net change of 2 or more properties -If only making a change with 2 properties, both must be in a different chain, parent company and management company from the subject hotel What are the exceptions to the "change rules" for comp sets? - Correct answer -A hotel can add a brand new property which has been open less than 6 months -A hotel can remove a property from its comp set that has stopped participating after 3 months
D. Different entities may not agree, for ex., chain vs. management company - Correct answer C. When can a comp set be created? A. Once the hotel has opened B. While the hotel is under construction C. On the one year anniversary of a hotel's opening D. 3 months before the hotel opens - Correct answer B Who creates a comp set for a chain hotel? A. Only the general manager B. Only the revenue manager C. Only the sales and marketing managers D. It is a joint effort involving many stakeholders - Correct answer D. Which is a valid rule related to creating a comp set? A. Comp sets must include 5 or more hotels B. No single property or chain can account for more than 50% of the total participating room supply of a comp set C. No single company can account for more than 75% of the total participating rom supply of a comp set D. when percentages are calculated, the rooms of the subject hotel, as well as the same chain and parent company, are excluded - Correct answer D. What is a Reverse Comp Set? A. Properties that have seen a significant decline in occupancy B. Properties that have recently changed affiliations C. Properties that you use to have included in your comp set D. Properties that name your hotel in their comp set - Correct answer D. Which is NOT a valid rule related to changing a comp set? A. If adding 2 hotels to a comp set, both must be in diff. chains B. A single hotel may be added to a comp set if it has been open less than 6 months C. A single hotel may be added to a comp set at any time D. Any change must involve 2 or more hotels, i.e. add one/drop one, add 2, drop 2, etc.
- Correct answer C. How does STR obtain raw data? - Correct answer Most raw property sales data is directly exported from the systems of the hotel companies. Companies send STR a raw data file each month, week, and/or day How does STR calculate Supply (Rooms Available)? - Correct answer The number of rooms in a hotel multiplied by the days in the month How does STR calculate Demand (Rooms Sold)? - Correct answer The number of rooms sold by a hotel, does not include complimentary rooms or "no shows"
How does STR calculate Revenue? - Correct answer Total room revenue generated from the sale of rooms, not including taxes; Includes service charges not resort fees, nothing else such as F&B What are the 3 hotel industry key performance indicators (KPIs)? - Correct answer 1. Occupancy (%)
- ADR ($)
- Revenue per Available Room/RevPAR ($) __________ is the percentage of available rooms that were sold during a specific time period - Correct answer Occupancy How is occupancy calculated? - Correct answer Demand/Supply or Rooms sold/Rooms available In what scenario could a hotel have a monthly occupancy greater than 100%? - Correct answer An airport hotel that could actually sell the same room twice in the same day Is it more common for a hotel to have a daily occupancy exceeding 100% or a monthly occupancy exceeding 100% - Correct answer Daily _________ is a measure of the average rate paid for rooms sold during a specific time period - Correct answer ADR How is ADR calculated? - Correct answer Revenue/Demand _________ is a measure of the revenue that is generated by a property in terms of each room available. - Correct answer RevPAR How does RevPAR differ from ADR? - Correct answer RevPAR is affected by the amount of unoccupied rooms, while ADR only shows the avg rate of rooms actually sold How is RevPAR calculated? - Correct answer Revenue/Supply or ADROccupancy In most cases, the RevPAR amount should be ________ than the ADR amount - Correct answer lower Frequently, when a hotel is evaluated or measured, ________ is the metric that's being looked at - Correct answer RevPAR How do you calculate percent changes (when comparing this year and last year)? - Correct answer (This year-Last year)/Last Year If the Occupancy was 83% this year compared to 82% last year, the Point Change would be ______ and the Percent Change would be ______ - Correct answer 1 and 2
Month-to-Date is defined as... - Correct answer The 1st of the current month through the current day of the month Running 28-Day is defined as... - Correct answer The current day plus the prior 27 days Running 4-Week is defined as... - Correct answer The current day plus the prior 3 same days of the week How NOT to calculate metrics for multiple time periods: - Correct answer Numbers for multiple time periods never use averages of monthly or daily values; Some people mistakenly compute YTD occupancy by adding the occupancy of each month and dividing by the number of months The definitions for Supply, Demand, and Revenue used by STR and others in the lodging industry are taken from what source? A. Lodging Industry Accounting Fundamentals Guide B. Uniform System of Accounts for the Lodging Industry C. Hotel Book Keeping for Dummies D. Modern Hotel Industry Accounting - Correct answer B. Which statement is true regarding raw data that is submitted to STR? A. A small amount comes in the form of raw data files B. Most data is entered online C. There are limited error check programs D. The majority of data is exported from the hotel company systems - Correct answer A. Which is true regarding the type of performance data (Supply, Demand, Revenue) that STR receives? A. Daily only B. Daily and Monthly only C. Daily, Weekly, and Monthly D. Daily, Weekly, Monthly, and Quarterly - Correct answer B. You receive your monthly STAR and find that it includes weekday and weekend performance, what days are included in the "weekday"? A. Sunday-Thursday B. Friday and Saturday C. Sunday-Saturday D. Monday-Friday - Correct answer A. In which of the following situations will occupancy increase? A. Supply increases 10% and demand increases 5% B. Supply decreases 5% and demand decreases 10% C. Supply increases 5% and demand decreases 5% D. Supply decreases 5% and demand increases 5% - Correct answer B.
Which statement is true regarding RevPAR? A. It is almost always higher than ADR B. It can be though of as a combination of Supply and Demand C. When a hotel or GM is evaluated, the RevPAR metric is rarely considered D. It can be thought of as a combination of Occupancy and ADR - Correct answer D. KPIs for the comp set are derived based upon... - Correct answer the aggregated raw data for each separate hotel that is a member of the comp set What is the first step when it comes to calculating KPIs? - Correct answer To combine the supply, demand, and revenue values for each hotel in the comp set What is the second step when it comes to calculating KPIs? - Correct answer The standard Occupancy, ADR, and RevPAR formulas are applied to the aggregated supply, demand, and revenue numbers T/F The KPIs are never based upon a straight average of the Occupancies or ADRs of each member of the comp set - Correct answer True The decision to choose whether to include or exclude the data for the subject hotel in the numbers for the comp set is made by who? - Correct answer The decision is made at the company level, not the hotel level T/F More and more companies are deciding to include the subject in the numbers for the comp set. - Correct answer False. they're choosing to exclude it. How are percent change numbers calculated for the comp set? - Correct answer (This year-Last year)/Last year* The index numbers compare the performance of the subject property to the comp set. What is the formula? - Correct answer Subject value/comp set value* What does an index number greater than 100 mean? - Correct answer The subject property outperformed the comp set What does an index number below 100 mean? - Correct answer The comp set outperformed the subject property Index numbers are available for which 3 metrics? - Correct answer Occupancy, ADR, and RevPAR Index numbers are generate for multiple time periods. Which ones? - Correct answer Both monthly (YTD, Running 12) and daily (MTD, Running 28) What are some additional names for Index Numbers? - Correct answer MPI (Market Penetration Index/Occupancy Index)
Multi-motnh numbers (YTD) are considered to be sufficient if greater than ____% of the months included in the multi-month period are sufficient. - Correct answer 50%; So an April YTD number would be sufficient if 3 of the 4 months are sufficient Frequently hotel staff receive their STAR Report and notice that comp set data is missing. The _________ page will help you determine the reason for the missing data. - Correct answer Response On the last week of the month, the weekly STAR report will include a MTD number based upon... - Correct answer the daily data for all the days in the months Why might the monthly number be different on the Monthly STAR Report than the last MTD number on the Weekly STAR report? - Correct answer 1. There may be a hotel in the comp set that submits monthly data but not daily data
- A hotel may submit monthly data that is different than the sum of all of the daily data that they submitted. For ex., some hotels can only make adjustments to monthly data
- Some hotels submit adjusted daily data at the end of the moth after the last Weekly Report (with the MTD number) is generated but before the Monthly Report comes out If a property opens before the 15th of the month, how should the rooms available be reported? - Correct answer For the full month A 150 room hotel opens on April 10th, room supply would be _________ - Correct answer 4500 (150x30days) *Note NOT 20 days "Soft Opening" refers to... - Correct answer When new hotels may not initially open with their full inventory of rooms STR uses what methodology in the case of a non-reporting hotel? - Correct answer 1. Supply, Demand, and Revenue for the participating properties is aggregated. (You could call this the "Sample" supply, demand, and revenue)
- An Occupancy and ADR is calculated based on the Sample data
- Supply is determined for all the hotels in the comp set, simply the number of rooms times the days in the month. This is referred to as the "Census" Supply, since it is the Rooms Available for all hotels, not just the participants
- This Census Supply number is multiplied times the Sample Occupancy to derive the Census Demand
- The Census Demand is multiplied times the Sample ADR to derive the Census Revenue Which of the following statements is accurate regarding "Sufficiency" as it is related to competitive set data? A. If a comp set is not sufficient for 3 consecutive months, you will no longer receive a STAR Report
B. If a comp set number for just a single month is not sufficient, it will still be displayed on the STAR Report C. Percent Change number for a single month will appear on the STAR report if either the "This Year" or "Last Year" data is sufficient D. The sufficiency rules are in place to protect the confidentiality of the data - Correct answer D. Key performance indicators (KPI) for the Competitive Set (for example the average Occupancy) are: A. Always based upon the aggregated raw data of each member of the competitive set B. Always based upon a straight average of the metrics, for example the Occupancies, of each member of the competitive set C. The comp set methodology differs inside and outside of North America D. The comp set methodology can differ by hotel company - Correct answer A. When you receive your STAR Report, your ADR for the month was $100 and the comp set ADR was $90. What can you tell? A. You had the highest ADR of all of the members of the comp set B. Your ADR was $10 higher than the average of all of the members of the comp set C. There was one hotel that had a higher ADR than you D. Your RevPAR will be higher than the RevPAR of the comp set - Correct answer B. What happens when there is a non-reporting hotel in a comp set? A. Modeled data is used for the non-reporting hotel B. Market data is used for the non-reporting hotel C. Prior year data for the non-reporting hotel is used D. The comp set average is calculated based upon the reporting hotels - Correct answer D. When you receive your STAR Report your ADR index was 110 and your Occupancy index was 95. What do you know? A. The RevPAR index will be around 115 B. The RevPAR index will be around 100 C. The RevPAR index will be around 105 D. The RevPAR index will be around 85 - Correct answer B. When you receive your STAR Report, you see that your RevPAR index was 90 this year compared to 80 last year. What do you know for sure? A. Your hotel outperformed the comp set when it comes to RevPAR both years. B. Your hotel outperformed the comp set this year when it comes to RevPAR, but not last year.
- Aggregate the actual data for participating hotels and combine this with the modeled data for the non-participating hotels
- The KPIs (Occupancy, ADR, and RevPAR) are then derived based upon the aggregated supply, demand, and revenue numbers The aggregated supply, demand, and revenue for all the hotels in the industry segment is a combination of... - Correct answer Actual data for participants as well as Modeled data for non-participants T/F Non-US industry data is modeled - Correct answer False. It is not modeled. The number of Rooms Available for an industry segment, such as a marketing or a tract/submarket, can vary over time due to: - Correct answer -New hotels opening -Room additions -Hotels closing -Room drops What is the formula for New Supply? - Correct answer Original Supply + (Opens+Adds)
- (Closes+Drops) = New Supp The supply (rooms available) for certain industry segments where Scale, Class, or Chain come into play can vary over time due to one more situation: - Correct answer - Conversions in -Conversions out New Supply = (Opens+Adds+Conversion Ins) - (Closes+Drops+Conversion Outs) What are the 2 possible scenarios when it comes to renovation? - Correct answer 1. If a hotel closes completely for a month or more due to renovation, this would show up as a Close and an Open. This would affect the Supply for an industry segment
- If the hotel does not close, but renovates rooms while remaining open, there is no adjustment made to the Rooms Available for the hotel. So there would not be any sort of related Room Add or Drop for the hotel or the corresponding industry segment If an industry segment has ______ or more hotels that submit actual data, then that segment is defined as "sufficient" - Correct answer 4 When talking about US Industry Data, which is an accurate explanation of modeled data? A. US industry data is based only on the actual data from reporting hotels B. Modeled data does not help compensate for the non-participating low-end independent hotels in the US C. Modeled data does not help increase the accuracy of US industry data D. Modeled data is derived by using actual data from reporting hotels to estimate performance for non-reporting hotels - Correct answer D.
The number of Rooms Available in a total market can change over time due to what 4 factors? A. New hotel openings, hotel closings, brand conversions, and renovations B. New hotel openings, brand conversions, hotel room additions, and hotel room drops C. Hotel closings, brand conversions, hotel room additions, and hotel room drops D. New hotel openings, hotel closings, hotel room additions, and hotel room drops - Correct answer D. What is the period of time a hotel must close completely due to renovation in order to be considered a Close and Reopen? A. Two weeks or longer B. One month or longer C. Six months or longer D. Twelve months or longer - Correct answer B. What is the minimum number of reporting hotels for an industry segment to be considered "sufficient"? A. Two B. Three C. Four D. Five - Correct answer C. In the US and in North America, probably the most popular industry segment to compare hotels to are ________ or ________ - Correct answer Market scale or Tract scale The Scale category is totally related to ________ hotels - Correct answer chain Outside North America, since there are much less chain hotels, __________ is used instead of Scale, and the popular segments are ________ and _________ - Correct answer Class; Market class and Tract class T/F The US is the only country where property data is modeled for non-reportign hotels
- Correct answer True The numbers for industry segments in the US are based on a combination of.... - Correct answer Actual and Modeled data In regard to currencies and exchange rates, how is monthly data converted? - Correct answer Using the daily exchange rate for the last day of the month In regard to currencies and exchange rates, how is daily data converted? - Correct answer Using the daily exchange rate
