HOSPITALITY REVENUE MANAGEMENT EXAM 2024 AND PRACTICE EXAM TEST BANK WITH STUDY GUIDE, Exams of Nursing

Download HOSPITALITY REVENUE MANAGEMENT EXAM 2024 AND PRACTICE EXAM TEST BANK WITH STUDY GUIDE and more Exams Nursing in PDF only on Docsity! HOSPITALITY REVENUE MANAGEMENT EXAM 2024 AND PRACTICE EXAM TEST BANK WITH STUDY GUIDE | ACCURATE QUESTIONS WITH DETAILED ANSWERS FOR GUARANTEED PASS | GRADED A In the hospitality industry what is the financial basis used for calculating the franchise fees or royalties that are paid to franchisors? An operation's Total Revenue An operation's Gross Operating Profit (GOP) An operation's Pre-tax profits An operation's Net Operating Income (NOI) An operation's total revenue Who are the customers of a hotel or restaurant franchisor? Hotel guests and/or restaurant customers Brand partners Destination marketing professionals Franchisees Franchisees What is the hospitality term used to describe the accumulated value of a brand's image or identity as perceived by consumers? Brand proliferation Brand equity Brand justice Brand partnering Brand equity In the US what is the dominate vehicle used by governmental authorities to fund local area destination marketing efforts? A special tax on the sale of hotel rooms Local property taxes A special tax on the sale of restaurant meals Income taxes A special tax on the sale of hotel rooms Which of the following statements best describe the structure of a typical CVB? A stockholder owned corporation A wholly owned corporate subsidiary A quasi governmental agency A limited liability company (LLC) A quasi governmental agency Which of the following revenue management activities would not be included in the typical job description of a revenue manager employed by a CVB? Promotion Publicity Product pricing Advertising Product pricing What is typically true about those who seek to champion new ideas in an organization? Other decision makers follow them automatically because they are innovative Their efforts are readily accepted as greatly over-due They can expect to be perceived as being efficient in utilizing resources They do not have it easy because their ideas are often met with skepticism Which would be the most difficult economic concept measured by an organization's financial managers? Revenue Organizational profits Product cost ratios Customers' profits Customers' profits On average, what would be the impact on an organization's bottom line of a 1% net increase in its selling prices? A 1-4% increase in profitability A 5-8% increase in profitability A 9-12 % increase in profitability A. A 1-4% in A 13-16% increase in profitability A 9-12% increase in profitability What is the most common result of increased commoditization of a product or service? Demand for the product or service declines The selling price of the product or service declines The selling price of the product or service increases The supply of the product or service increases The selling price of the product or service declines What is the industry term for all new hospitality businesses or projects that are currently under development but that have not yet opened The pipeline The short sales The advanced purchases The future demand curve The pipeline What is leverage? The methods used to strategically price products and services The use of borrowed money to purchase business assets The interest rate paid for mortgage loans The process of reducing expenses to improve profitability The use of borrowed money to purchase business assets Nikki has 50 rooms left to sell tomorrow night. Her forecast indicates she would sell 20 of them at her rack rate of $100.00. A group would now like to buy all 50 of the available rooms for $75.00 each. Assume her forecast is accurate. What is the amount of incremental revenue Nikki would achieve if she decided to sell all 50 of her available rooms to the group? $3,750 $2,000 $1,750 $5,750 $1,750 Randy is the FOM at the 1000-room Greenbranch Hotel. On average; Randy employs 80 full- time front desk staff. Last year a total of 140 different individual staff members held these 80 positions at some point during the year. What was Randy's front desk staff turnover rate last year? 80% 60% 140% 75% 75% Which feature would not be analyzed as part of a revenue manager's SWOT analysis? Strengths Weaknesses Opportunities Timetables Timetables Which of the following would be an undistributable hotel expense? Guest room linens Cleaning supplies Advertising Employee uniforms Advertising What is the most common response by consumers when a product or service is heavily discounted for the purpose of maintaining organizational sales levels in a distressed market? Belief that the product or service was previously overpriced Belief that the product or service is very popular Belief that the quality of the product or service is being improved Belief that the product or service is being discontinued in the near future Belief that the product or service was previously overpriced Which factor do meeting planners consider to be of most importance when choosing a hotel facility for a meeting or convention? Facility price Facility amenities Facility reputation -distribution channels -differential pricing -constrained supply -yield management -constrained supply Which industry was the first to use yield management principles? -lodging -food service -airline -catering -airline What is the industry term used to describe the selling of rooms which are not actually available to sale? -overbooking -yield management -revenue management -maximum ADR Overbooking What is the formula used to calculate average daily rate? -owner's investment/occupancy rate=average daily rate -rooms available for sale/occupancy rate=average daily rate -total rooms sold/total room's revenue=average daily rate -total room's revenue/total rooms sold=average daily rate Total room's revenue/total rooms sold=average daily rate Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250 rooms. What was Tashia's occupancy % last night? -87.5% -70% -114.3% -80% 70% Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250 rooms. What was Tashia's revpar last night? -$140.00 -$35.00 -$125.00 -$160.00 $140.00 What is the industry term for the average revenue generated by each occupied guestroom during a defined period of time? -REVPOR -REVPASH -REVPAR -REVAVE REVPOR What is the formula used to calculate GOPPAR? -(total revenue - management controllable expenses) / rooms sold -rooms available to sell / (total revenue - management controllable expenses) -rooms available to sell / total management controllable expenses -(total revenue - management controllable expenses) / rooms available to sell (total revenue - management controllable expenses) / rooms available to sell What is the industry term for a customer group which can be readily identified by one or more common characteristics? -comp set -STR group -market segment -revenue group Market segment What is a rack rate? -the price of rooms when nonrefundable advance purchases are made -the price of rooms when no discounts of any type are offered -the price of rooms when 0-10% discounts are offered -the price for the most expensive room in a hotel The price of rooms when no discounts of any type are offered What is: total period revenue/ (number of available seats x hours of seat availability) -the formula for REVPASH -the formula for check average -the formula for contribution margin (CM) -the formula for REVPAR The formula for REVPASH What is the term used to identify a management philosophy that places customer gain ahead of short-term revenue maximization in revenue management decision making? -20% -30% -40% 20% What is an example of a controllable cost? -rent -insurance -marketing -loan payments Marketing What is an example of a fixed cost? -utility services -salaries and wages -licenses and permits -repairs and maintenance Licenses and permits What is the formula for prime cost? -total cost of sales - total labor = prime cost -total cost of sales + total labor = prime cost -total cost of sales - controllable income = prime cost -total cost of sales + controllable income = prime cost Total cost of sales + total labor = prime cost A manager's operation had an income before income taxes of $2,000 in a month. Total expenses were $18,000 in that month. What was the operation's total sales amount in that month? -$20,000 -$25,000 -$30,000 -$35,000 $20,000 A manager compares the revenue results for a 28-day P&L period to the results of the 28-day P&L report from the previous 28-day period. What source of information is that manager using to analyze the revenue portion of the current P&L statement? -budget -chain standard -industry standard -historical performance Historical performance What is the name for the value given up by a buyer and a seller in a business transaction? -expense -price -cost -profit Price Charging guests for watching a Pay-Per-View movie in their hotel guestroom is an example of what type of pricing? -value based pricing -differential pricing -two-tiered pricing -demand based pricing Two-tiered pricing What is the fundamental assumption upon which the concept of consumer rationality is based? -buyers act in ways that are of personal benefit to them -buyers will pay the lowest price possible for any product or service -buyers never act in ways that can be predicted -buyers usually act in ways that cannot be predicted Buyers act in ways that are of personal benefit to them What is the revenue management term used to describe the perceived benefit gained, minus the price paid, in a business transaction? -profit -cost -sale -value Value What is created when a seller communicates to a buyer a description of a product to be sold and the price at which the product will be sold? -a cost-based offer -a demand-based price -a two-tiered proposition -a value proposition A value proposition Which one of the following terms is not one of the 4 Ps of the marketing mix? -proposition -cost accounting Cost accounting What is the industry term for the point at which an organization's revenues exactly equal its costs? -midpoint -break-even point -equilibrium point -equal capacity point Break-even point Which of the following food service costs is a variable cost? -food -equipment rental -insurance -interest on debt Food Which of the following lodging costs is a fixed cost? -room supplies -franchiser reservation fees -mortgage payments -housekeeper wages Mortgage payments In a hospitality industry break-even analysis graph the total revenues line starts at 0. Why does the total costs line always start farther up the y axis? -because variable costs are incurred even if no guests are served or rooms are sold -because fixed costs are always higher than variable costs -because fixed costs less variable costs must always be greater than 0 -because fixed costs are incurred even if no guests are served or rooms are sold Because fixed costs are incurred even if no guests are served or rooms are sold Which of the following statements about unit costs in the hospitality industry is true? -unit costs are unaffected by an item's selling price -unit costs will vary based upon how high or low an item is priced -selling prices must equal unit costs -unit costs cannot be lower than the unit's selling price Unit costs will vary based upon how high or low an item is priced Which of the following statements about the relationship between costs and pricing is true? -an appropriate selling price for a product or service must be dictated by its total costs -an appropriate selling price for a product or service must dictate its allowable costs -allowable costs must be determined before an appropriate selling price is established -an increase in a product's cost must dictate an equal or greater increase in that product's selling price An appropriate selling price for a product or service must dictate its allowable costs If a Revenue Manager implements an organization s strategic pricing plan what personal characteristic of that Revenue Manager will be most important for ensuring the plan s success? -training in accounting -experience in marketing -an understanding of algebraic formulas -an understanding of an organization's customers An understanding of an organization's customers Which formula represents a buyer's view of a sales transaction? Costs - Selling price = Personal Profit Selling Price - Perceived Value = Personal Profit Selling Price - Costs = Personal Profit Perceived Value - Selling Price = Personal Profit Perceived value - selling price = personal profit What type of benefit is lacking in material qualities and is not able to be touched or seen but nonetheless can still be perceived? Intangible Fringe Tangible Material Intangible What will be the typical case in an auction when the initial price bid for the item being sold is very low? The number of potential bidders will be low The number of potential bidders will be high The number of potential bidders will increase as price increases The number of potential bidders will decline The number of potential bidders will be high Penny Larson is travelling to San Francisco for a personal vacation. Which of economist Milton Friedman's buyer value formulas would apply to her purchase of the hotel rooms she will need during her trip? Spending someone else's money on herself Spending her own money on someone else Inseparability Inventory Inconsistency Inconsistency Which of the Four I's of service refers to the fact that services most often cannot be held, touched, or even seen before they are purchased? Intangibility Inseparability Inventory Inconsistency Intangibility Ahmed is the sole waitperson on duty at the Athenian restaurant during the very slow 2:00 p.m. To 4:00 p.m. Time period. Which of the Four I's of service refers to the fact that employees such as Ahmed must be scheduled to work anytime a service business is open and regardless of low volume levels? Intangibility Inseparability Inventory Inconsistency Inventory Which of the Four I's of service refers to the tendency of consumers to equate the quality of service provided with the attitude of the person who actually provides the service? Intangibility Inseparability Inventory Inconsistency Inseparability Which of the Four I's of service addresses the fact that a hotel room that goes unsold on a specific night cannot be discounted and offered for sale the next day? Intangibility Inseparability Inventory Inconsistency Inventory Randall is the revenue manager for a franchisee who owns a five unit quick service restaurant company. Which feature would be the easiest for Randall to change if he sought to increase the value his company provides its customers? The quality of food products offered for sale The quality of service offered The quality of beverage products offered for sale The customer seating capacity available The quality of service offered What is the most common guest complaint about hotel guest rooms? Service deficiencies Excessive age Room size deficiencies Room locations Service deficiencies What is the most common guest complaint in the food service industry? Food and/or beverage quality Seating location Service quality Menu prices Service quality Consider the formula: (A + B) - C = D Where: A = Perceived tangible product benefit B = Perceived intangible service benefit C = Price D = Value If all other variables are held constant, which statement is also true? As A increases, D decreases As B decreases, D increases As A and B increase, D decreases As C decreases, D increases As C decreases, D increases Which two factors do successful revenue managers employ when they devise and implement strategic pricing plans? Intuition and insight Probability theory and basic calculus Data management and probability theory Data management and insight Data management and insight Which statement about revenue management in the hospitality industry is true? Its focus should be on costs, not customers Those who implement it must have advanced training in statistical analysis It is best understood by experienced hospitality managers Its effective implementation requires intuition rather than data analysis Hotticket.com then marks up and immediately resells the tickets it has purchased to interested individuals who visit the Hotticket website. What is the name of the activity Hottickets.com is engaging in? Arbitrage Commoditization Consumer surplus staging Articles of trade Arbitrage What is the purpose of a price fence or barrier? To determine the optimum price at which to sell a product or service To minimize the sale of low priced products or services To establish the actual amount of available product inventory To identify who is and who is not eligible for a special pricing offer To identify who is and who is not eligible for a special pricing offer Which differential pricing strategy would in most cases be illegal or unethical if implemented? Pricing based on the age of the buyer Pricing based on the occupation of the buyer Pricing based on the ethnicity of the buyer Pricing based upon the location at which the buyer makes a purchase Pricing based on the ethnicity of the buyer The use of a formal customer rewards program is an example of what type of differential pricing strategy? Pricing based on distribution channel Pricing based on customer characteristic Pricing based on product versioning Pricing based on payment terms Pricing based on customer characterstic The requirement that a buyer present a coupon at the time of purchase is an example of what type differential pricing strategy? Pricing based on distribution channel Pricing based on customer characteristic Pricing based on product versioning Pricing based on payment terms Pricing based on customer characteristic The premium prices charged for dinner served at the restaurant Le Jules Vernes on the second level of the Eiffel Tower in Paris, France can be attributed, in part, to which type of differential pricing strategy? Pricing based on location Pricing based on time Pricing based on product versioning Pricing based on bundling Pricing based on location A business hotel's promotion targeting local area residence and designed to offer them significantly reduced room rates on Sunday nights is an example of which type of differential pricing strategy? Pricing based on location Pricing based on bundling Pricing based on product versioning Pricing based on time Pricing based on time Which statement about high volume buyers in the hospitality industry is true? The costs of selling and servicing their accounts increase proportionately with the volume of purchases made They expect to pay more per unit purchased because they buy in large quantity The per-unit cost of selling to them is less than the cost associated with low volume buyers It is easier to win their business than to win the business of low volume buyers The per-unit cost of selling to them is less than the cost associated with low volume buyers Offering reduced room rates only to those room buyers willing to book their reservations via an internet website is an example of which type of differential pricing strategy? Pricing based on location Pricing based on time Pricing based on product versioning Pricing based on distribution channel Pricing based on distribution channel What is the formula revenue managers use to calculate Net ADR Yield? Standard ADR/ Net Room Rate = Net ADR Yield Net Room Rate/ Standard ADR = Net ADR Yield Standard ADR - Distribution Channel Costs = Net ADR Yield Occupancy % / Standard ADR = Net ADR Yield Net room rate / standard ADR = net ADR yield Offering guests the opportunity to purchase a sandwich, fries and a soft drink at a price lower than that which would be charged for those same items purchased separately is an example of which type of differential pricing strategy? D. Consumer rights legislation Anti-trust legistlation What is the name used to describe a consortium of independent organizations formed to limit competition by controlling the production, distribution and pricing of a product or service? A. League B. Cartel C. Lobby D. Union Cartel What is the name of the US legislation that outlawed all contracts and conspiracies that unreasonably restrain interstate trade? A. Clayton Act B. Federal Trade Commission Act C. Sherman Antitrust Act D. Robinson-Patman Act Sherman antitrust act What is the name of the US legislation that prohibits competing hospitality managers from meeting to agree upon the room prices that will be charged for upcoming events or charged to specific groups of customers? A. Civil Rights Act B. Clayton Act C. Robinson-Patman Act D. Sherman Antitrust Act Sherman antitrust act What is the name of the US legislation that prohibits illegal discrimination in pricing? A. Federal Trade Commission Act B. Clayton Act C. Robinson-Patman Act D. Sherman Antitrust Act Clayton act Which US law would be violated if a hotel charged different room rates based upon a room buyer's race, religion or ethnic background? A. Sherman Antitrust Act B. Civil Rights Act C. Clayton Act D. Consumer Protection Act Civil rights act What is the name for the price perceived by consumers to be the normal or standard price for a product or a service? A. Recurring price B. Required price C. Reference price D. Recommended price Reference price What is true about the way buyers generally view variance in a seller's prices? A. Price increases justified by supply shortages are likely to be viewed favorably B. Surcharges are viewed more favorably then discounts C. Discounts are viewed more favorably then surcharges D. Price increases justified by escalated consumer demand are likely to be viewed favorably Discounts are viewed more favorably than surcharges In the revenue management field, what do the letters "STR" refer to? A. A standard room code B. A standard rate code C. A company that specializes in hospitality employee placement D. A company that specializes in helping hospitality managers evaluate their effectiveness A company that specialized in helping hospitality managers evaluate their effectiveness What is the name of the hospitality management position responsible for the housekeeping and front office areas of a hotel? A. FOM B. DOSM C. Executive Housekeeper D. Rooms manager Rooms manager What is the name of the hospitality management position responsible for the accounting functions in a hotel? A. Controller B. DOSM C. FOM D. Rooms manager Controller To whom would a Revenue Manager likely report if consistency across multiple properties was of most importance? A. A corporate level executive A property specific description used to identify a particular room product a symbol used to identify the housekeeping status of a specific room A property specific description used to identify a particular room product Which of the following is not typically used by revenue managers to designate specific room products sold in their hotels? Location price bed configuration room size Price What is the lodging term used to describe two independent data management systems that have been electronically connected? Interface inverse connection bond one-way connect Interface What would be the effect of an upon-arrival inventory management training program that resulted in a hotel significantly up selling a large percentage of its arriving guests? ADR and Occupancy would increase and Revpar would be unchanged revpar and Occupancy would increase and ADR would be unchanged ADR and revpar would increase and occupancy % would be unchanged ADR and revpar would increase and occupancy % would increase ADR and REVPAR would increase and occupancy % would be unchanged What are two synonymous lodging industry terms used to identify the difference between purchases a group pledges to make and the purchases it actually makes? Attrition and Dry Attrition and Wash Fade and Dry Fade and wash Attrition and wash Tanika is the revenue manager at the Holiday House Hotel. Southeast airlines has requested that Tanika quote them a rate for the use of 20 rooms per night for a period of one year. If Southeast accepts Tanika's quote for both price and availability, what type of room rate will the hotel and airline agreed upon? Negotiated rate group rate volume rate contract rate Contract rate Expedia.com wants Jesse, the revenue manager at the Hilton, to agree to contract terms that would require Jessie's hotel to apply the agreed upon Expedia rate to any room type (except suites) available at the time one of Expedia's customers wants to make a reservation. What is the industry term for Expedia.com's contract request? Run of the house First Room Availability Last Room Availability Black out Availability Last room availability Francisco is the revenue manager at the 1500 room Bay Shore hotel. Tonight he forecasts 750 stay-overs and 750 arrivals. Assume he is accurate in forecasting a 6% no-show rate. How many additional reservations could Angelina accept before she would be required to walk an arriving guest? 88 90 89 91 90 What is true about a revenue manager's rooms demand forecast? It is based on customer demand at an established price It is based on customer demand at a yet to be determined price It cannot be altered in the future via price management strategies . It is based on the total number of hotels in an area It is based on customer demand at an established price In the airline industry, airline companies establish ticket prices. In the lodging industry, who is responsible for establishing room selling prices for hotels that are part of a lodging company? Franchise companies or their designees Brand managers or their designees Area cvbs or their designees Hotel owners or their designees Hotel owners or their designees In the lodging industry, what is a rack rate? A room's highest legally allowable selling price A room's selling price when no discounts of any type are offered Maximization of room codes, minimization of rate codes Minimization of room codes, maximization of rate codes Maximization of room codes, maximization of rate codes Maximization of room codes, minimization of rate codes Donna is a hotel revenue manager preparing next year's rooms forecast. Donna knows that in November of next year a new hotel is opening near her own. As a result, she is considering reducing her rooms forecast for that month. If she does so, what data type will she be primarily using to make her decision? Historical data Current data Future data Financial data Future data Donna is a hotel revenue manager. Donna knows that for tonight she has sold 175 of her 200 available rooms. As a result, is eliminating room discounts on her remaining 25 rooms. In doing so, what data type is she primarily using to make her decision? Historical data Financial data Future data Current data Current data In a limited service hotel, what is the incremental expense incurred in selling one guest room? GOPPAR revpar GOPPOR CPOR CPOR What is the lodging industry term for the situation that occurs when a hotel is unable to accommodate a guest's reservation preference due to the unavailability of the room or service at the price, or on the date, originally requested by the guest? Blocked (reservation) Denied (reservation) Fenced (reservation) Tracked (reservation) Denied (reservation) Ray sold 100 rooms on Monday at an ADR of $150.00. He sold 150 rooms on Tuesday at an ADR of $200.00. What was his ADR for the combined days of Monday and Tuesday? $ 150.00 $ 175.00 $ 180.00 $ 200.00 $180.00 Peggy is the revenue manager at a 1500 room hotel. For next Friday Peggy's PMS shows 300 check-outs, 900 stayovers, 250 transient arrivals and a 200-room group block that begins a three- day stay on that day. What is Peggy's current rooms available for sale for next Friday? 150 250 450 650 150 What is the lodging industry term for a revenue management strategy that instructs reservationists to decline any room reservation request that does not equal or exceed the pre- determined minimum number of nights allowed? RNET CPOR CTA MLOS MLOS Amanda is the revenue manager of a hotel. When she opened her e-mail last Friday she found a message from the Executive Director of the state dental association asking Amanda for a formal price quote on rooms and meeting space needed by the association for their annual conference. What would Amanda call this inquiry? RFP CTA MLOS CPOR RFP What is the name for the rooms-related report that would identify the number of group rooms currently on the books as well as the rate or speed at which group rooms are currently being sold? Constrained supply report Demand generator report Pace report Velocity report Pace report What is the formula revenue managers use to calculate the percentage change in sales which has occurred from the last accounting period to the present period? Total Sales Last Period - Total Sales This Period / Total Sales Last Period = % Change in Sales Eliminate discounts What is the most likely result of a revenue manager's decision to reduce rack room rates during periods of reduced demand? GOPPAR will be increased Competitor's rates will also be reduced Incremental room demand will be stimulated Occupancy rates will also be reduced Competitor's rates will also be reduced What is the most likely result of a revenue manager's decision to raise room rates during periods of very high demand? The number of potential buyers will increase revpar will be increased revpar will decline ADR will decline REVPAR will be increased What is the most likely result of a revenue manager's decision to raise room rates during periods of moderate to low demand? Occupancy rates will increase The number of potential buyers will decline The number of potential buyers will remain constant ADR will decline The number of potential buyers will decline What is one consistent characteristic of desirable rooms revenue? It leads to higher CPOR levels It leads to lower GOPPAR levels It leads to higher GOPPAR levels It leads to lower GOPPOR levels It leads to higher GOPPAR levels Which of the following is not a hotel intermediary? Travel agents 3rd Party websites Front desk agents Travel wholesalers Front desk agents Which travel industry-related business group developed the Global Distribution System? The restaurant industry The hotel industry The airline industry The online travel agency industry The airline industry What was the original purpose of THISCO? To develop a single GDS connection for major hotel companies To determine the order of hotel listings on 3rd Party internet websites To bypass the GDS and allow the booking of hotel rooms directly with crss To negotiate IDS booking fees To develop a single GDS connection for major hotel companies What is true about the calculations required to calculate the following Net ADR Yield formula? Net Room Rate Standard ADR = Net ADR Yield Standard ADR (x) Distribution Channel Costs (=) Net Room Rate Standard ADR (-) Distribution Channel Costs (=) Net Room Rate Standard ADR (+) Distribution Channel Costs (=) Net Room Rate Standard ADR (÷) Distribution Channel Costs (=) Net Room Rate Standard ADR (-) distribution channel costs (=) net room rate Lani is the revenue manager at the Aloha Inn. In which situation would Lani optimize the Inn's gross rooms revenues? Low Standard ADR, low Net ADR Yield Low Standard ADR, high Net ADR Yield High Standard ADR, low Net ADR Yield High Standard ADR, high Net ADR Yield High standard ADR, high net ADR yield What is the industry term for a lower room rate that is offered when a potential rooms buyer exhibits initial price resistance? Rack rate Fade rate Discount rate Diminished rate Fade rate What is true about a future room reservation booked for a guest whose original reservation was booked through expedia.com and who is presently checking out of the hotel? No franchise fees will be paid on the revenue the new reservation will generate No IDS fees will be paid on the revenue the new reservation will generate The reservation will have greater than average distribution channel costs The buyer's room rate must be discounted to optimize revpar Which components of the hotel industry's current reservation system currently offers its users the ability to simultaneously see comparative hotel rate information? The PMS and GDS The GDS and IDS The GDS and CRS The IDS and CRS The GDS and IDS Where on a hotel's statement of income and expense (income statement) does the 10th Edition of the Uniform System of Accounts for Lodging Industry (USALI) recommend travel agency commissions be recorded? The administrative and general (A&G) expense portion The undistributed operating expense portion The marketing expense portion The rooms expense portion The rooms expense portion Which common IDS room sales model is most dependent on selling price for its revenue generation? Merchant model Arbitrage model Agency model Opaque model Opaque model What is true about proprietary web sites administered by a hotel's franchisor? Content changes must be implemented by the brand's managers They are not interfaced with the brand's CRS Hotels must pay an agency fee for all room nights booked on these sites They are operated as merchant model sites Content managers must be implemented by the brand's managers Lara's rack rate is $299.99. She has been asked to bid on 200 rooms nights needed by a travel agent seeking housing for a group of seniors touring the area by bus. The travel agency has requested Lara provide her a net (non-commissionable) rate. Lara's hotel typically pays a 10% travel agency fee. What would be Lara's per room night net non-commissionable bid for these rooms if she does not lower her rack rate? $ 299.99 $ 269.99 $ 199.99 $ 149.99 $269.99 What would be the result of a revenue manager's successful implementation of aggressive strategies designed to shift guests' future bookings from more expensive distribution channels to lesser expense channels? Increased ADR, increased GOPPOR Increased Net ADR Yield, increased GOPPOR Increased ADR, Increased revpar Increased ADR, Increased Net ADR Yield Increased net ADR yield, increased GOPPAR What is true about rooms that are sold at prices below a hotel's variable operating costs? They will cause a decrease in revpar They will cause an increase in GOPPAR They will cause a decrease in STAR reported Occupancy Index They will cause an increase in revpar They will cause an increase in REVPAR Scott is a revenue manager who calculates the following for his hotel: Total (rooms + non-rooms) revenue Total occupied rooms What is the result of Scott's calculation? Revpar GOPPAR revpor GOPPOR REVPOR Which is considered a room-related occupancy cost? A revenue manager's salary Complimentary breakfast costs Mortgage payments Costs associated with operating the hotel's website Complimentary breakfast costs At Rachel's hotel the CPOR is $40.00. Her Net ADR Yield averages 85% and her franchise fees average 5%. What is Rachel's average minimum ADR sales point? $ 20.00 $ 34.00 $ 50.00 $ 80.00 $50.00 It was $105.00 It was somewhat higher than the ADR index of 105%. What is true about his hotel's ADR last month? Last month Carl's hotel had an ADR of $200.00. The ADR for his comp. Set for the same month was $225.00. Prior to last month, Carl's Year-To-Date ADR index was 110%. What will always be true about his Year-To-Date ADR index when last month's operating results are included in the Year-To-Date data? It will be 88.9% It will be 112.5% It will be greater than 110% It will be less than 110% It will be less than 110% This Year-To-Date, Carl's hotel is averaging an ADR of $125.00. The ADR of his comp. Set for the same period is $125.00. Assume Carl's comp. Set is an appropriate one. What would you recommend Carl do if his occupancy index for the same period is 140%? Carefully decrease rack rates to maximize rooms sold Carefully increase discounts on rack rates to maximize revpar Carefully decrease rack rates to optimize GOPPAR Carefully increase rack rates to optimize GOPPAR Carefully increase rack rates to optimize GOPPAR Last month Carl's hotel had a revpar index of 100. His occupancy index was 132.5 and his ADR index was 75.5. What is true about his hotel's performance last month? His revenue per available room is lower than that of his comp. Set His GOPPAR is not optimized because it is low relative to the revpar index His GOPPAR is not optimized because it is high relative to the revpar index His revenue per available room is higher than that of his comp. Set His GOPPAR is not optimized because it is low relative to the REVPAR index Last month Carl's hotel had an ADR index of 80.0% and an occupancy index of 120%. What was Carl's revpar index for last month? 96.0 % 150 % 66.6 % 100 % 96.0% Last month Carl's hotel had a revpar index of 133.0%. Based on that information alone; what does Carl know for sure about his hotel's performance last month? His occupancy index will exceed 100% His ADR index will exceed 100% His ADR or occupancy index will exceed 100% His ADR and his occupancy index will exceed 100% His ADR or occupancy index will exceed 100% Last month Carl's 500-room hotel had a comp. Set that included five additional hotels offering a total of 2000 rooms. What was Carl's supply share % last month? 50% 40% 25% 20% 20% Last month Carl's hotel supplied 10.8% of the rooms in his comp set. It attracted 11.6% of all the rooms sold (demand) and generated 9.1% of the total revenue achieved by the comp set. What is true about Carl's hotel? Its rates are high relative to the comp. Set's and the hotel has an occupancy index above 100%. Its rates are high relative to the comp. Set's and the hotel has an occupancy index less than 100%. Its rates are low relative to the comp. Set's and the hotel has an occupancy index less than 100 Its rates are low relative to the comp. Set's and the hotel has an occupancy index above 100%. Its rates are low relative to the comp. Set's and the hotel has an occupancy index above 100% What metrics are best used to assess the relative merits of a specific lodging industry distribution channel's contribution to a single hotel? ADR and rooms sold Rooms sold and Net ADR Yield ADR and Net ADR Yield STAR occupancy index and ADR Rooms sold and net ADR yield It is near the end of the month and Tamrika is a revenue manager considering the impact of selling 200 room nights, for use this month, but at a room rate far below her hotel's average room rate. What would be the impact on her hotel's operating statistics if she makes this sale? Increased revpar and reduced flow-thru % Reduced revpar and reduced flow-thru % Increased ADR and increased flow-thru % Reduced ADR and increased flow-thru % Increased REVPAR and reduced flow-thru% Which of the following statements about restaurant pricing methods is true? The menu pricing methods used by restaurateurs have changed radically in the past two decades In most cases the task of pricing menu items is assigned to a revenue management specialist Discounting for quantity purchase is one of the primary pricing methodologies used by restaurateurs $ 4.00 $ 7.98 $7.98 Shaniqua's restaurant utilizes a contribution margin pricing system. She would like the selling price of a new menu item she is introducing to be $10.00. Her required contribution margin is $4.00. Her labor costs are 30%. What is the amount her kitchen staff can spend on product cost when making the item? $ 3.00 $ 7.00 $ 2.50 $ 6.00 $6.00 Why can foodservice operators sell a 20 year Scotch at a price higher than a one year old Scotch? The quality of a 20 year old Scotch is higher than a one year old Scotch The cost to the operator of a 20 year old Scotch is higher than a one year old Scotch Customers prefer to pay high prices One year old Scotch is not popular The quality of a 20 year old Scotch is higher than a one year old Scotch Assume a food and beverage operator offers guests a 20-year old Scotch at a price five times the amount charged for one-year old Scotch. Assume also that the operator's customers very rarely purchase the more expensive Scotch. Which statement would explain why the 20 year old Scotch does not sell well? The quality of the 20-year old Scotch is too low compared to the one-year old Scotch The cost to the operator of the 20-year old Scotch is too high Customers do not accept this seller's price-value proposition The 20-year old Scotch is priced too low Customers do not accept this seller's price-value proposition Arthur's restaurant is extremely busy on Friday and Saturday. The manager of the operation offers reduced prices on quick-to-prepare and quick-to-serve menu items on those two nights. What revenue related factor is this restaurant manager seeking to positively influence? Costs Capacity Check average Contribution margin Capacity Poco Miller's restaurant has 130 seats. Last night Poco served 295 guests. What was is the formula Poco would use to calculate her table turns? 130/295 = Table turns 130 (x) 295 = Table turns 295/130 = Table turns 295 (x) 130 = Table turns 295/130 = table turns Texas Roadhouse restaurants do not accept reservations. Guests who call ahead, however, can have their names added to the wait list prior to arriving at the restaurant. What revenue-related factor is this strategy designed to optimize? Sales mix Capacity Guest type Contribution margin Capacity Why should revenue managers monitor their competitors' prices? To keep their own prices on the lower end of their competitors' price ranges. To keep their own prices on the higher end of their competitors' price ranges. To keep their own prices in the middle of their competitors' price ranges. To keep their own prices well below those of their competitors. To keep their own prices on the higher end of their competitor's price ranges Which value-related factor does a revenue manager seek to impact if prices for carry-out menu items in a restaurant are 10% less than the price of the same items when they are consumed in that restaurant's dining room? Competition Portion size Meal period Service level Service level Offering the same menu item in a variety of portion sizes is an example of what type of differential pricing strategy? Product versioning Time Customer characteristic Bundling Product versioning Last night Lara's restaurant served 225 guests and achieved total revenue of $4,500. What was Lara's check average last night? $ 50.00 $ 20.00 $ 101.25 77.4% 25% For analysis purposes Jenny considers her restaurant to have three day parts. These three are breakfast, lunch and dinner. Last month Jenny's breakfast sales were $ 20,000. Lunch sales were 40% of total sales. Total sales were $200,000. What was the amount of sales contributed by the dinner day part? $180,000 $140,000 $100,000 $80,000 $100,000 October's sales at Raja's restaurant this year were $60,000. That was an increase of 20% over the revenue achieved in October of last year. What was the amount of revenue achieved in Raja's restaurant during October of last year? $40000 $45000 $50000 $55000 $50,000 April's sales at Raja's restaurant this year were $80,000. That was a decrease of 20% compared to the revenue achieved in April of last year. What was the amount of revenue achieved in Raja's restaurant during April of last year? $86,000 $90,000 $96,000 $100,000 $100,000 Sales at Peggy's restaurant this year were $1,650,000. Last year's sales were $1,500,000. What was the percentage change in revenue Peggy achieved this year when compared to last year? +10% +9.1% +19.1% +20% +10% Karl operates two restaurants. This year's sales at the first operation were $440,000. That was an increase of 10% from the prior year. This year's sales at the second restaurant were $660,000. That was an increase of 20.0% from the prior year. What was the percent change in the combined revenue achieved by both restaurants this year compared to last year? +15.0% +15.8% +13.0% +13.6% +15.80% In March this year Mr. Monteagudo's restaurant achieved sales of $108,000.00. Mr. Monteagudo's menu prices are 5% are higher than they were last year. Last year's March sales were $100,000.00. After accounting for the increase in menu prices, what was the real change in revenue experienced by Mr. Monteagudo's restaurant? -$3000 +3000 -$5000 +5000 +3,000 When comparing operating results in one accounting period to the same accounting period of the previous year which of the following would result in decreased foodservice revenues? Served the same number of guests at a 5% lower check average Served 5% more guests at the same check average Served 5% more guests at a 5% higher check average Served 5% fewer guests at a check average that is 10% higher than the previous accounting period Served 5% fewer guests at a check average that is 10% higher than the previous accounting period Alice's restaurant is located in a shopping mall. Her store occupies 950 square feet. Last month Alice's revenues were $28,500. What was the revenue per square foot achieved by Alice's restaurant last month? $333.33 $33.33 $300.00 $30.00 $30 Last month revenue in Sofia's take out pizza shop was $50,000. Sofia used 1250 labor hours to generate the revenue and she pays her employees an average of $10.00 per hour. 5000 guests were served in the month. What was Sofia's Labor Cost % for the month? 25% Seat utilization % (x) check average = REVPASH What is the name for the accounting device used by foodservice operators to divide their operating year into 13 equal time periods? 31-day accounting period 30-day accounting period 29-day accounting period 28-day accounting period 28-day accounting period What business segment best describes a company that is engaged primarily in the sale of intangible goods? Agriculture Manufacturing Construction Service Service Tammy owns a tanning salon. Her salon has five tanning beds; thus she faces supply constraints based on capacity. In her business what additional factor acts to constrain supply? Price Advertising Location Time Time Revenue optimization strategies can make the most impact on inventory management in industries with which kind of cost structures? Low variable costs and high fixed costs High variable costs and low fixed costs High variable costs and high fixed costs Low variable costs and low fixed costs Low variable costs and high fixed costs Nearly every ski resort in the Upper Northeastern part of the US generates the majority of its annual income during the winter months. What is the cause of this? Constrained supply Variable demand Product versioning High fixed costs Constrained supply Selling season tickets to sporting events such as professional baseball or basketball games at a price per game that is lower than the cost of individual tickets to all of the games is an example of what revenue optimization activity? Constrained demand management Communications selection Product versioning Variable demand management Product versioning Which of the following would not be considered highly perishable inventory? Golf tee times Concert seats Hotel rooms French champagne French champagne What is the business term used to describe the application of statistical formulas to past events for the purpose of predicting future events? Probabilistic modeling Correlation assessment Calculus applex Algebraic formulation Probabilistic modeling It is Saturday night at 7:30 p.m. And Alexander's restaurant is slower than expected. Only 50% of its seats are filled. Gene, the manager, wants to increase revenue by offering a two-for-one special between 8:00 p.m. And 9:00 p.m. This same night. What will be Gene's greatest challenge in implementing this revenue optimization strategy? Ability to communicate efforts High fixed cost Constrained supply Variable demand factors Ability to communicate efforts Which tasks would be of most importance to revenue managers with multi-unit revenue generating responsibilities? Customer relations and face-to-face selling Daily data collection and compilation Employee scheduling and evaluation Revenue manager training and motivating Revenue manager training and motivating What is the hospitality industry term used to describe a shrinking number of alternative franchisors offering increasing numbers of franchise alternatives? Sandy has 100 hotel rooms to sell. This Saturday night has enough customers to sell 125 rooms so she will be refusing 25 requests for rooms. What is this an example of? - CORRECT ANSWER constrained supply Which industry was the first to use Yield Management principles? - CORRECT ANSWER airline What is the industry term used to describe the selling of rooms which are not actually available for sale? - CORRECT ANSWER overbooking What is the formula used to calculate Average Daily Rate? - CORRECT ANSWER Total Room's Revenue / Total Rooms Sold = Average Daily Rate Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250 rooms. What was Tashia's occupancy % last night? - CORRECT ANSWER 70% Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250 rooms. What was Tashia's RevPAR last night? - CORRECT ANSWER $140 What is the industry term for the average revenue generated by each occupied guestroom during a defined period of time? - CORRECT ANSWER RevPOR What is the formula used to calculate GOPPAR? - CORRECT ANSWER (Total Revenue - Management Controllable Expenses) / Rooms Available to Sell = GOPPAR What is the industry term for a customer group which can be readily identified by one or more common characteristics? - CORRECT ANSWER market segment What is a rack rate? - CORRECT ANSWER The price of rooms when no discounts of any type are offered What is: Total period revenue (Number of available seats) x (hours of seat availability) - CORRECT ANSWER RevPASH formula What is the term used to identify a management philosophy that places customer gain ahead of short-term revenue maximization in revenue management decision making? - CORRECT ANSWER Customer-centric revenue management What is the term used to describe the potential customers to whom a business's marketing activities and messages are directed? - CORRECT ANSWER target market What is the term used to describe efforts undertaken to encourage travel and tourism to a specific geographic area or attraction? - CORRECT ANSWER destination marketing What is the name for the value given up by a buyer and a seller in a business transaction? - CORRECT ANSWER price Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an example of what type of pricing? - CORRECT ANSWER two-tiered pricing What is the fundamental assumption upon which the concept of consumer rationality is based? - CORRECT ANSWER Buyers act in ways that are of personal benefit to them What is the revenue management term used to describe the perceived benefit gained, minus the price paid, in a business transaction? - CORRECT ANSWER value What is created when a seller communicates to a buyer a description of a product to be sold and the price at which that product will be sold? - CORRECT ANSWER value proposition Which of the following terms would be included in the Place portion of a hotel's marketing mix? - CORRECT ANSWER distribution channels What is the fundamental assumption upon which the Law of Supply is based? - CORRECT ANSWER The higher the demand for a product the more of it will be produced by sellers According to Alfred Marshall's work, if the price of a product is lower than the natural, or equilibrium price, what will happen? - CORRECT ANSWER The demand for the product would exceed its supply Assume an equilibrium price (P1) is in place for a product. What would the law of supply and demand predict as an outcome if demand for that product increased? - CORRECT ANSWER The new price (P2) would be higher than the previous price (P1) and supply would increase What concept is displayed by the intersecting point on a supply and demand curve? - CORRECT ANSWER An estimate of the amount of a product that would be purchased at a known price and point in time What must be true if a product producer is to continue creating and selling products? - CORRECT ANSWER Revenues must exceed costs What is the specialized branch of accounting that focuses on recording and analyzing the expenses incurred by an organization? - CORRECT ANSWER cost accounting What is the industry term for the point at which an organization's revenues exactly equal its costs? - CORRECT ANSWER break-even point Which of the following foodservice costs is a variable cost? - CORRECT ANSWER food Which of the following lodging costs is a fixed cost? - CORRECT ANSWER mortgage payments In a hospitality industry break-even analysis graph the Total Revenues line starts at 0. Why does the Total Costs line always start farther up the y axis? - CORRECT ANSWER Because fixed costs are incurred even if no guests are served or rooms are sold Randall is the revenue manager for a franchisee who owns a five unit quick service restaurant company. Which feature would be the easiest for Randall to change if he sought to increase the value his company provides its customers? - CORRECT ANSWER quality of service offered What is the most common guest complaint about hotel guest rooms? - CORRECT ANSWER service deficiencies What is the most common guest complaint in the food service industry? - CORRECT ANSWER service quality Consider the formula: (A + B) - C = D Where: A = Perceived tangible product benefit B = Perceived intangible service benefit C = Price D = Value If all other variables are held constant, which statement is also true? - CORRECT ANSWER as C decreases, D increases Which two factors do successful revenue managers employ when they devise and implement strategic pricing plans? - CORRECT ANSWER data management and insight Which statement about revenue management in the hospitality industry is true? - CORRECT ANSWER It is best understood by experienced hospitality managers What is value-based pricing? - CORRECT ANSWER A pricing system based upon a buyer's view of product or service value All except one of the following pricing systems are marketing-based. Which one is not an example of marketing-based pricing? - CORRECT ANSWER Return on Investment (ROI) pricing What is the term used to describe a pricing system in which all customers are charged the same price at all times? - CORRECT ANSWER fixed pricing What is true for franchised hotel operations in the United States? - CORRECT ANSWER Their prices are established by the hotel owners What is the economic term used to describe the difference between what a consumer is charged for a product or service and the price that consumer would willingly pay for it? - CORRECT ANSWER consumer surplus What is the relationship between differential pricing and consumer surplus? - CORRECT ANSWER Differential pricing is a strategy used by sellers to minimize consumer surplus Which course of action would be most beneficial to the profit generating ability of a revenue manager's business? - CORRECT ANSWER The majority of any consumer surplus is captured by the business Hottickets.com is a web-based business that buys popular concert tickets in bulk. It buys the tickets at a low price because it qualifies for group ticket discounts offered by concert promoters. Hotticket.com then marks up and immediately resells the tickets it has purchased to interested individuals who visit the Hotticket website. What is the name of the activity Hottickets.com is engaging in? - CORRECT ANSWER arbitrage What is the purpose of a price fence or barrier? - CORRECT ANSWER To identify who is and who is not eligible for a special pricing offer Which differential pricing strategy would in most cases be illegal or unethical if implemented? - CORRECT ANSWER Pricing based on the ethnicity of the buyer The use of a formal customer rewards program is an example of what type of differential pricing strategy? - CORRECT ANSWER Pricing based on customer characteristic The requirement that a buyer present a coupon at the time of purchase is an example of what type differential pricing strategy? - CORRECT ANSWER Pricing based on customer characteristic The premium prices charged for dinner served at the restaurant Le Jules Vernes on the second level of the Eifel Tower in Paris, France can be attributed, in part, to which type of differential pricing strategy? - CORRECT ANSWER pricing based on location A business hotel's promotion targeting local area residence and designed to offer them significantly reduced room rates on Sunday nights is an example of which type of differential pricing strategy? - CORRECT ANSWER pricing based on location Which statement about high volume buyers in the hospitality industry is true? - CORRECT ANSWER The per-unit cost of selling to them is less than the cost associated with low-volume buyers Offering reduced room rates only to those room buyers willing to book their reservations via an internet website is an example of which type of differential pricing strategy? - CORRECT ANSWER Pricing based on distribution channel What is the formula revenue managers use to calculate Net ADR Yield? - CORRECT ANSWER Net Room Rate Standard ADR = Net ADR Yield Offering guests the opportunity to purchase a sandwich, fries and a soft drink at a price lower than that which would be charged for those same items purchased separately is an example of which type of differential pricing strategy? - CORRECT ANSWER pricing based on bundling Which statement about revenue management and revenue optimization is true? - CORRECT ANSWER Revenue management seeks to maximize income while revenue optimization seeks to maximize long-term profits Who should lead the revenue management efforts of a lodging or foodservice organization? - CORRECT ANSWER a qualified revenue manager Donna is a hotel revenue manager preparing next year's rooms forecast. Donna knows that in November of next year a new hotel is opening near her own. As a result, she is considering reducing her rooms forecast for that month. If she does so, what data type will she be primarily using to make her decision? - CORRECT ANSWER future data Donna is a hotel revenue manager. Donna knows that for tonight she has sold 175 of her 200 available rooms. As a result, is eliminating room discounts on her remaining 25 rooms. In doing so, what data type is she primarily using to make her decision? - CORRECT ANSWER current data In a limited service hotel, what is the incremental expense incurred in selling one guest room? - CORRECT ANSWER CPOR What is the lodging industry term for the situation that occurs when a hotel is unable to accommodate a guest's reservation preference due to the unavailability of the room or service at the price, or on the date, originally requested by the guest? - CORRECT ANSWER denied Ray sold 100 rooms on Monday at an ADR of $150.00. He sold 150 rooms on Tuesday at an ADR of $200.00. What was his ADR for the combined days of Monday and Tuesday? - CORRECT ANSWER $180 Peggy is the revenue manager at a 1500 room hotel. For next Friday Peggy's PMS shows 300 check-outs, 900 stayovers, 250 transient arrivals and a 200-room group block that begins a three- day stay on that day. What is Peggy's current rooms available for sale for next Friday? - CORRECT ANSWER 150 What is the lodging industry term for a revenue management strategy that instructs reservationists to decline any room reservation request that does not equal or exceed the pre- determined minimum number of nights allowed? - CORRECT ANSWER MLOS Amanda is the revenue manager of a hotel. When she opened her e-mail last Friday she found a message from the Executive Director of the state dental association asking Amanda for a formal price quote on rooms and meeting space needed by the association for their annual conference. What would Amanda call this inquiry? - CORRECT ANSWER RFP What is the name for the rooms-related report that would identify the number of group rooms currently on the books as well as the rate or speed at which group rooms are currently being sold? - CORRECT ANSWER pace report What is the formula revenue managers use to calculate the percentage change in sales which has occurred from the last accounting period to the present period? - CORRECT ANSWER Total Sales This Period - Total Sales Last Period Total Sales Last Period = % Change in Sales What is the primary reason for forecasting future room demand? - CORRECT ANSWER to make pricing-related decisions Scott is a revenue manger in a 600 room hotel. For tomorrow he forecasts that 10 rooms will be OOO and that there will be 80 stayovers with 300 arrivals. He also forecasts 30 no-shows, 10 early departures and 20 over-stays. What is Scott's forecast for the number of rooms occupied tomorrow? - CORRECT ANSWER 360 In the lodging industry, when is a guest considered to be an over-stay? - CORRECT ANSWER When the guest checks out of the hotel after his or her originally scheduled check-out date When might a revenue manager at a lodging facility be pressured to establish a long-term forecast that is unrealistically low? - CORRECT ANSWER When a significant financial incentive exists for exceeding the forecast In the lodging industry what factors would be overinflated to produce an unrealistically high RevPAR forecast? - CORRECT ANSWER ADR and/or occupancy % What is the most customer-centric strategy for revenue managers to employ if they seek to optimize ADR and RevPAR in periods of temporarily heightened demand? - CORRECT ANSWER eliminate discounts What is the most likely result of a revenue manager's decision to reduce rack room rates during periods of reduced demand? - CORRECT ANSWER competitor's rates will also be reduced What is the most likely result of a revenue manager's decision to raise room rates during periods of very high demand? - CORRECT ANSWER RevPAR will also be increased What is the most likely result of a revenue manager's decision to raise room rates during periods of moderate to low demand? - CORRECT ANSWER number of potential buyers will decline What is one consistent characteristic of desirable rooms revenue? - CORRECT ANSWER leads to higher GOPPAR values For revenue managers working in the lodging system the term "place" in the 4ps of the Marketing Mix refers to two items. One is the physical location of the hotel. What is the second? - CORRECT ANSWER the property distribution channels What is the industry term used to describe all of a hotels unique or distinct forms of guestroom products available for sale? - CORRECT ANSWER rooms inventory What is a rate code? - CORRECT ANSWER A property specific description used to identify a particular room product Which of the following is not typically used by revenue managers to designate specific room products sold in their hotels? - CORRECT ANSWER price What is the lodging term used to describe two independent data management systems that have been electronically connected? - CORRECT ANSWER interface What was the original purpose of THISCO? - CORRECT ANSWER To develop a single GDS connection for major hotel companies What is true about the calculations required to calculate the following Net ADR Yield formula? Net Room Rate Standard ADR = Net ADR Yield - CORRECT ANSWER Standard ADR (-) Distribution Channel Costs (=) Net Room Rate Lani is the revenue manager at the Aloha Inn. In which situation would Lani optimize the Inn's gross rooms revenues? - CORRECT ANSWER High Standard ADR, high Net ADR Yield What is the industry term for a lower room rate that is offered when a potential rooms buyer exhibits initial price resistance? - CORRECT ANSWER fade rate Harold tracks his hotel guest check outs and the number of new reservations made at check out. Last week a total of 640 guests checked out of his hotel. In that same period, his front desk staff booked reservations for 32 future rooms nights from this group of check out guests. What is true at Harold's hotel? - CORRECT ANSWER The reservation nights booked per check out for last week was .05 For which distribution channel type do hotels typically employ a shopper's service? - CORRECT ANSWER Sales made via the telephone Which is most often true about room sales made by a hotel's group sales department? - CORRECT ANSWER ADRs are lower than average and Net ADR Yield is higher than average How are most CVBs in the United States funded? - CORRECT ANSWER By a combination of hotel occupancy taxes and membership dues Which of the following rooms marketing strategies would contribute to the commoditization of hotel rooms? - CORRECT ANSWER Participation on a web site that lists only a hotel's name and a single rack room rate Into which hotel industry distribution channel component would a brand's call center worker enter room reservations he or she has made? - CORRECT ANSWER CRS Which components of the hotel industry's current reservation system currently offers its users the ability to simultaneously see comparative hotel rate information? - CORRECT ANSWER The GDS and IDS Where on a hotel's statement of income and expense (income statement) does the 10th Edition of the Uniform System of Accounts for Lodging Industry (USALI) recommend travel agency commissions be recorded? - CORRECT ANSWER the rooms expense portion Which common IDS room sales model is most dependent on selling price for its revenue generation? - CORRECT ANSWER opaque model What is true about proprietary web sites administered by a hotel's franchisor? - CORRECT ANSWER Content changes must be implemented by the brand's managers Lara's rack rate is $299.99. She has been asked to bid on 200 rooms nights needed by a travel agent seeking housing for a group of seniors touring the area by bus. The travel agency has requested Lara provide her a net (non-commissionable) rate. Lara's hotel typically pays a 10% travel agency fee. What would be Lara's per room night net non-commissionable bid for these rooms if she does not lower her rack rate? - CORRECT ANSWER 269.99 What is true about rooms that are sold at prices below a hotel's variable operating costs? - CORRECT ANSWER they will cause an increase in RevPAR Scott is a revenue manager who calculates the following for his hotel: Total (rooms + non-rooms) revenue Total occupied rooms What is the result of Scott's calculation? - CORRECT ANSWER RevPOR Which is considered a room-related occupancy cost? - CORRECT ANSWER complimentary breakfast costs At Rachel's hotel the CPOR is $40.00. Her Net ADR Yield averages 85% and her franchise fees average 5%. What is Rachel's average minimum ADR sales point? - CORRECT ANSWER $50 Last month Carl's hotel ran a 55% occupancy. His comp. set had 50,000 room nights available for sale and sold 25,000 rooms. What was Carl's occupancy index last month? - CORRECT ANSWER 110% Last month Carl's hotel had an ADR of $150.00. The ADR of his comp. set was $200.00. What was Carl's ADR index last month? - CORRECT ANSWER 75% Last year Carl's hotel had an occupancy index of 120%. From that information, what can be said about Carl's hotel? - CORRECT ANSWER It achieved a higher average occupancy % than its comp. set Last month Carl's hotel had an ADR index of 125%. In the same month his RevPAR index was 100%. What can be said about Carl's hotel? - CORRECT ANSWER occupancy index is less than 100 Last month Carl's hotel had 10,000 available room nights and sold 6,000 room nights. Last month his comp set had an average occupancy of 80%. What was Carl's occupancy index last month? - CORRECT ANSWER 75% Last month Carl's hotel had an ADR index of 105%. What is true about his hotel's ADR last month? - CORRECT ANSWER It was somewhat higher than the ADR of his competitive set Last month Carl's hotel had an ADR of $200.00. The ADR for his comp. set for the same month was $225.00. Prior to last month, Carl's Year-To-Date ADR index was 110%. What will always