Hospitality Revenue Management Final Exam Questions and Answers, Exams of Nursing

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Hospitality Revenue Management Final Exam

(Compilation of possible final exam questions

based on exams 1-4) 200 Q&A/ A+ Score

Solution.

Most of the entities below are classified as "Chains". Which one is a "Parent Company" consisting of multiple chains? - Answer: Accor Hotels Which is a true statement about Parent Companies? - Answer: Parent Companies and the related chains have changed over time What are the three different operation types? - Answer: Chain Management, Franchise, Independent What is the most common guest complaint about hotel guest rooms? - Answer: Service deficiencies

What is the most common guest complaint in the foodservice industry? - 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 - Answer: As C decreases, D increases Which two factors do successful revenue managers employ when they devise and implement strategic pricing plans? - Answer: Data management and insight All except one of the following pricing systems are marketing-based. Which one is NOT an example of marketing-based pricing? - Answer: Return on Investment (ROI) pricing What is true for franchised hotel operations in the United States? - Answer: Their prices are established by the hotel owners What is the relationship between differential pricing and consumer surplus? - Answer: Differential pricing is a strategy used by sellers to minimize consumer surplus 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

Alice is the revenue manager at the Granger hotel. A large volume customer wants a price quote from Alice on 50 rooms per week for the next 52 weeks. Each room would be rented for two days at a time. How many room nights will Alice be quoting on? - Answer: 5200 What is the name of the US legislation that outlawed all contracts and conspiracies that unreasonably restrain interstate trade? - Answer: Sherman Antitrust Act What is the name of the US legislation that prohibits illegal discrimination in pricing? - Answer: Clayton Act What is the name for the price perceived by consumers to be the normal or standard price for a product or a service? - Answer: Reference price In the revenue management field, what do the letters "STR" refer to? - Answer: A company that specializes in helping hospitality managers evaluate their effectiveness What is the name of the hospitality management position responsible for the accounting functions in a hotel? - Answer: Controller According to the most recent Hospitality Sales & Marketing Association International (HSMAI) survey, to whom do the largest percentage of hotel revenue managers report? - Answer: Their hotel's general manager Which group of employees is most responsible for implementing the revenue optimization strategies and tactics developed by a revenue management team? - Answer: Line-level employees

What vehicle do effective revenue managers use to best develop and evaluate their organizations' pricing and revenue management strategies and tactics? - Answer: Regular strategy meetings Who should lead the revenue management efforts of a lodging or foodservice organization? - Answer: A qualified revenue manager In a limited-service hotel, what is the incremental expense incurred in selling one guest room? - Answer: CPOR 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? - 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? - 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? - Answer: MLOS 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? - Answer: Pace report What is the formula revenue managers use to calculate the percentage change

What is the lodging industry term used to describe two independent data management systems that have been electronically connected? - Answer: Interface 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 airlines accept Tanika's quote for both price and availability, what type of room rate will the hotel and airline have agreed upon? - Answer: Contract rate Expedia.com wants Jessie, 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? - Answer: Last room availability Angelina is the revenue manager at the 1000 room Bay hotel. Tonight she forecasts 600 stay- overs and 400 arrivals. Assume Angelina is accurate in forecasting a 5% no-show rate. How many additional reservations could Angelina accept before she would be required to walk an arriving guest? - Answer: 21 In the airline industry, airline companies establish ticket prices. In the lodging industry, who is responsible for establishing room selling prices? - Answer: Hotel owners or their designees What is true about discounts offered on the selling price of hotel rooms? - Answer: They should be easily explainable and defensible In which situation would a customer-centric revenue manager likely implement a special event rate? - Answer: During a local festival that would fill all of the area hotels

Hanna is the revenue manager at the Waterford hotel. For the first week in July next year, she has determined her hotel will accept reservations for guests seeking to arrive on July 1st. July 2nd. or July 3rd; but not on July 4th. Which of the following revenue management control (restriction) strategies is she using? - Answer: CTA Which of the following is not a strategy typically used by revenue managers to optimize revenue during periods of high demand? - Answer: Implement rack rate discounts to maximize occupancy To optimize revenues while enhancing property operations, which strategy pair should revenue managers seek to implement? - Answer: Maximization of room codes, minimization of rate codes What strategy should be put into action when revenue managers implement special event rates? - Answer: Enhance guest value by providing product and/or service enhancements Which travel industry-related business group developed the Global Distribution System? - Answer: The airline industry What is true about the calculations required to calculate the following Net ADR Yield formula? Net Room Rate Standard ADR = Net ADR Yield - 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? - Answer: High Standard ADR, high Net ADR Yield

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? - Answer: $269. 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? - Answer: RevPOR Which is considered a room-related occupancy cost? - 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? - 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? - Answer: 110% Last year Carl's hotel had an occupancy index of 120%. From that information, what can be said about Carl's hotel? - Answer: It achieved a higher average occupancy % than its comp. set 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? - Answer: 75% Last month Carl's hotel had an ADR index of 105%. What is true about his hotel's ADR last month? - Answer: It was somewhat higher than the ADR of his competitive set

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%? - Answer: 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? - Answer: His GOPPAR is not optimized because it is low relative to the RevPARindex 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? - Answer: 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? - Answer: His ADR or occupancy index will exceed 100% 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? - Answer: 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? - Answer: Rooms sold and Net ADR Yield Shaniqua's restaurant utilizes a product cost percentage pricing system. She would like to apply pricing factors to make pricing her menus easier. What would be the pricing factor she would use when her desired product cost percentage for an item is 40%? - Answer: 2.

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? - Answer: 295/130 = Table turns Why should revenue managers monitor their competitors' prices? - Answer: To keep their own prices on the higher end of their competitors' 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? - Answer: Service level Offering the same menu item in a variety of portion sizes is an example of what type of differential pricing strategy? - Answer: 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? - Answer: $ 20. What foodservice value-related factor is most affected when a revenue manager successfully implements a price blending strategy? - Answer: Menu mix At Lauren's restaurant, the check average is always higher on Saturday night than on any other night. What is the most likely cause of the check average variance she experiences? - Answer: The sales mix What business segment best describes a company that is engaged primarily in the sale of intangible goods? - Answer: Service Revenue optimization strategies can make the most impact on inventory management in industries with which kind of cost structures? - Answer: 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? - Answer: Constrained supply Which of the following would not be considered highly perishable inventory? - Answer: 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? - Answer: Probabilistic modeling Which tasks would be of most importance to revenue managers with multi-unit revenue generating responsibilities? - Answer: 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? - Answer: Brand consolidation What is the role of a revenue manager within a franchise organization if that manager is assigned the task of assisting others within the same company in their implementation of revenue management-related strategies, tactics and tasks? - Answer: Internal brand support Larissa is the corporate revenue manager for Sandstone hotels. She oversees 10 of her company's franchised properties. Which of the following is an example of Larissa's internal customers? (Internal customer: a co-worker or another department who receives services produced elsewhere in the company to then create a product or service for the company's external customers.) - Answer: Sandstone's company controller (A company's controller is the chief accounting officer and heads of the accounting department.)

the combined revenue achieved by both restaurants this year compared to last year? - Answer: +15.8% 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? - Answer: +$3, 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? - Answer: $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 Dollars Per Guest Served for the month? - Answer: $2. What would be the typical impact on RevPASH of an increase in guest duration? - Answer: RevPASH would decrease if check average did not change What is the name for the accounting device used by foodservice operators to divide their operating year into 13 equal time periods? - Answer: 28-day accounting period What is true about rooms that are sold at prices below a hotel's variable operating costs? - Answer: They will cause an increase in RevPAR Which is a true statement about Management Companies? - Answer: Management companies have contracts where they receive payment for their services and/or some portion of profits

Which is a true statement regarding geographic categorization? - Answer: STR uses the UNWTO definitions when it comes to recognizing countries Which two geographic categories are the most important for a hotel GM? - Answer: Market and Submarket Markets and Submarkets are created based on what two determining factors? - Answer: Number of hotels and participation Which is a true statement regarding Submarkets - Answer: A submarket may represent a small city in a rural market How many Scale categories are there compared to Class categories? - Answer: 7 Scale categories and 6 Class categories Which one of the following is an accurate statement regarding Scale and Class groups and a single chain? - Answer: A Ritz Carlton hotel will always be in the same Scale and Class groups in every country throughout the world The four key considerations when creating a Competitive Set are? - Answer: Participation, Proximity, Pricing and Product The definitions for Supply, Demand and Revenue used by STR and others in the lodging industry are taken from what source? - Answer: Uniform System of Accounts for the Lodging Industry Which is true regarding the type of performance data (Supply, Demand, Revenue) that STR receives? - Answer: Daily and monthly only

Use the spreadsheet below to answer the following two Questions, 22 and 23, regarding the methodology used to calculate KPIs for a competitive set. The competitive set Occupancy (E6) for July is _____. - Answer: 72.6% The competitive set RevPAR (G6) for July is _____. - Answer: $119. When you receive your STAR report your ADR index was 110 and your Occupancy index was 90. What do you know? - Answer: The RevPAR index will be in the neighborhood of 100 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? - Answer: Your hotel will have a positive RevPAR Index Percent Change Use the spreadsheet below to answer Questions 26 and 27 regarding the methodology used to calculate Index. The occupancy Index for November (H3) is _____. - Answer: 119. The RevPAR Index for November (J3) is ______. - Answer: 117. Use the spreadsheet below to answer Questions 28 and 29 regarding the methodology used to calculate Index percent change. The ADR Index percent change for November (I4) is _____. - Answer: 1.7% The RevPAR Index percent change for November (J4) is ______. - Answer: 16% What is the minimum number of reporting hotels for an industry segment to be considered "sufficient"? - Answer: Four Modeled data is used in which country? - Answer: United States

Which one of the following is a non-geographic category shown on the STAR report? - Answer: Class Which statement is true regarding the industry data that a hotel may see on a STAR report? - Answer: North America hotels will see industry data for Market, Market Class, Submarket and Submarket Scale Using the information from an excerpt of an "At a Glance" page from a Monthly STAR Report answer the following Question 34. Which one of the following is an accurate statement regarding the performance at your hotel? - Answer: Your Occupancy Index (MPI) has surpassed 100 in each of the four time periods shown The Competitive Set Report in a Monthly STAR Report shows what information? - Answer: 18 months of monthly data and 3 years of YTD, Running 3-month, and Running 12-month data Using the information from an excerpt of a sample "Competitive Set Report" page from a Monthly STAR Report, answer the following Question 36. Which of the following statements best describes performance of your hotel over the last six months? - Answer: Your hotel's Occupancy Rank has consistently been 2 of 5 Which is an accurate statement regarding the Day of Week and Weekday/Weekend tab in the Monthly STAR report? - Answer: All of the above Using the information from an excerpt of a sample "Day of Week and Weekday/Weekend Report" Page from a Monthly STAR Report, answer the following Question 38. Based on the information provided above, which one of the following is an accurate statement? - Answer: The Weekend Occupancy for your hotel is consistently higher than your Competitive Set for all time periods