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

Download Hospitality Revenue Management Final Exam Questions and Answers and more Exams Hospitality and Tourism in PDF only on Docsity!

Hospitality Revenue Management Final Exam

Testbank Updated 2024-2025. Real Exam

Questions and Correct Verified Answers.

Graded A

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? – ANS pricing based on location 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 the manager using to analyze the revenue portion of the current P&L statement? - ANShistorical performance 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? - ANS$20, A manager's total revenue for an accounting period is $150,000. Revenue from one of the operation's three revenue sources is $30,000. What was the sales percentage of that revenue source? - ANS20%

According to Alfred Marshall's work, if the price of a product is lower than the natural, or equilibrium price, what will happen? - ANSThe demand for the product would exceed its supply According to the most recent Hospitality Sales & Marketing Association International (HSMAI) survey, to whom do the largest percentage of hotel revenue managers report? - ANStheir hotel's general manager 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? - ANSinventory 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? - ANS All except one of the following pricing systems are marketing-based. Which one is not an example of marketing-based pricing? - ANSReturn on Investment (ROI) pricing

At Rachel's hotel the CPOR is $40.00. Her Net ADR Yield averages 85% and her franchise fees average 5%. What is Rachel's average minimum ADR sales point? - ANS$ Bob is the revenue manger at the Waterfront hotel. For the third week in December next year he has determined the hotel will accept reservations for guests seeking to arrive on Dec 21st. Dec 22nd. or Dec 23rd; but not on Dec 24th or Dec 25th. Which of the following revenue management control (restriction) strategies is she using? - ANSCTA Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an example of what type of pricing? - ANStwo-tiered pricing 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? - ANSas C decreases, D increases

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? - ANSfuture 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? - ANScurrent data 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? - ANSlast room availability 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? - ANSthe property distribution channels For which distribution channel type do hotels typically employ a shopper's service? - ANSSales made via the telephone

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? - ANSarbitrage How are most CVBs in the United States funded? - ANSBy a combination of hotel occupancy taxes and membership dues 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? - ANSan understanding of an organization's customers If quantity and price are held constant how will reductions in product or service quality affect buyers' perceptions of value? - ANSperceived value will decrease If quantity and quality are held constant how will a reduction in price affect buyers' perceptions of value? - ANSperceived value will increase

In a hospitality industry break-even analysis graph the Total Revenues line starts at

1. Why does the Total Costs line always start farther up the y axis? - ANSBecause fixed costs are incurred even if no guests are served or rooms are sold In a limited service hotel, what is the incremental expense incurred in selling one guest room? - ANSCPOR 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? - ANShotel owners or their designees In the lodging industry what factors would be overinflated to produce an unrealistically high RevPAR forecast? - ANSADR and/or occupancy % in the lodging industry, what is a rack rate? - ANSA room's selling price when no discounts of any type are offered In the lodging industry, when is a guest considered to be an over-stay? - ANSWhen the guest checks out of the hotel after his or her originally scheduled check-out date

same night. What will be Gene's greatest challenge in implementing this revenue optimization strategy? - ANSability to communicate efforts Lani is the revenue manager at the Aloha Inn. In which situation would Lani optimize the Inn's gross rooms revenues? - ANSHigh 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? - ANS269. 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? - ANSsandstone's company controller 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?

• ANS20%

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? - ANS75% Last month Carl's hotel had a RevPAR index of 100. His occupancy index was 132. and his ADR index was 75.5. What is true about his hotel's performance last month? - ANSHis GOPPAR is not optimized because it is low relative to the RevPAR index 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? - ANSHis ADR or occupancy index will exceed 100% Last month Carl's hotel had an ADR index of 105%. What is true about his hotel's ADR last month? - ANSIt was somewhat higher than the ADR of his competitive 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? - ANSoccupancy index is less than 100

Last year Carl's hotel had an occupancy index of 120%. From that information, what can be said about Carl's hotel? - ANSIt achieved a higher average occupancy % than its comp. set Lisa is the revenue manager of a 500 room hotel property. Next week-end demand for her rooms will exceed the number of rooms she has available for sale. Which high demand pricing strategy will optimize revenue for her property? - ANSImplement a differential pricing strategy and allocate the limited supply to those market segments who value the rooms most highly 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? - ANSpricing based on bundling 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? - ANSPricing based on distribution channel 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? - ANS

Penny Larson is a travel agent arranging a one-week San Francisco vacation for Mr. and Mrs. Rafael Ochoa. Which of economist Milton Friedman's buyer value formulas would apply to her purchase of the hotel rooms the Ochoa's will need during their trip? - ANSspending someone else's money on someone else Penny Larson is buying a $100.00 restaurant gift card as a present for her niece who is graduating from hospitality management school. Which of economist Milton Friedman's buyer value formulas would apply to her purchase? - ANSspending her own money on someone else 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? - ANSspending her own money on herself Penny Larson is travelling to San Francisco on business. Her company will reimburse 100% of her travel expense. Which of economist Milton Friedman's buyer value formulas would apply to her purchase of the hotel rooms she will need during her trip? - ANSspending someone else's money on herself

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? - ANSRevPOR 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? - ANS 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? - ANSproduct versioning 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? - ANStime

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? - ANScontract 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? - ANS70% Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250 rooms. What was Tashia's RevPAR last night? - ANS$ 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? - ANSpricing based on location The requirement that a buyer present a coupon at the time of purchase is an example of what type differential pricing strategy? - ANSPricing based on customer characteristic

What concept is displayed by the intersecting point on a supply and demand curve? - ANSAn estimate of the amount of a product that would be purchased at a known price and point in time What element is not present in a barter economy? - ANSmoney What is a rack rate? - ANSThe price of rooms when no discounts of any type are offered What is a rate code? - ANSA property specific description used to identify a particular room product What is an algebraic equivalent of the formula: Sales = Costs + Profit? - ANSprofit=sales-costs What is an example of a controllable cost? - ANSmarketing What is an example of a fixed cost? - ANSlicenses and permits 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? - ANSvalue proposition

What is one consistent characteristic of desirable rooms revenue? - ANSleads to higher GOPPAR values What is the business term used to describe the application of statistical formulas to past events for the purpose of predicting future events? - ANSprobabilistic modeling 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? - ANSconsumer surplus What is the formula for prime cost? - ANSTotal cost of sales + Total labor = Prime cost What is the formula revenue managers use to calculate Net ADR Yield? - ANSNet Room Rate Standard ADR = Net ADR Yield