Revenue Management Exam 1: Questions and Answers, Exams of Hospitality and Tourism

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Revenue Management Exam 1

What are the supply and demand structures necessary for revenue management to be a viable strategy? - Question and answersCyclical Demand Fixed Supply/Capacity Perishability/Inability to Inventory High Fixed Costs as a Percentage of Total Costs What is the definition of revenue management? - Question and answersData Driven Strategies to: Sell the right room to the right customer at the right price at the right moment on the right distribution channel What are the right market structures necessary for revenue management to be a viable strategy? - Question and answersDifference in taste and buying behaviors Variance in the value of the customer High value customers tend to book last What are the major key performance indicators for hotels (comp set metrics)? - Question and answersOccupancy Index Percent Change Ranking ADR Index Percent Change Ranking RevPar Index Percent Change Ranking What are the categories in a hotel Rate Portfolio for revenue management? - Question and answersForecasted Demand BAR Contract Transient Group Government ALL HAVE DIFFERENT RATES Janet is the director of revenue management for a hotel in Blacksburg with 160 rooms, last Tuesday she was successful renting 120 of her rooms. Her total room revenue was $20,000. What was her occupancy rate? a. 55 b. 65 c. 75 d. 85 e. None of the Above - Question and answers75 because occupancy rate is number of rooms sold / number of rooms available multiplied by 100

For a hotel, the ____________ is the room price available to the general public with no restrictions or limitations. a. CONUS b. Negotiated Rate c. Flat Rate d. BAR e. Premium Rate - Question and answersd. BAR ______________ occurs when a hotel sells a room at a discounted price when that room could have been sold for a higher price. a. Rate Cannibaliization b. Rate Parity c. Rate Transparancy d. Rate Dilution e. Cross Product Elacticity - Question and answersa. Rate Cannibalization What is rate parity? - Question and answersSame rate regardless of channel (OTA, Hotel Website) What is rate transparancy? - Question and answersWhen someone questions why a rate is a certain price when someone else is paying something different. You have to be able to explain why they are paying what they are paying What is cross product elasticity? - Question and answersThe probablility of gaining supplementary purchases, given the initial lodging purchase. (example the correlation between someone staying in the hotel and using the hotel restaurant) Because of the cyclical demand characteristic of most hotels and the perishability of the hotel product (rooms), the emphasis of revenue management focuses on __________. a. inventory management b. human resources management c. cost management d. information systems management e. demand management - Question and answerse. Demand Management Janet is the director of revenue management for a hotel in Blacksburg with 160 rooms. Last week her RevPar index was 117.3, indicating? a. her hotel's RevPar was significantly better than her comp set b. her hotel's RevPar was essentially the same as her comp set c. her hotel's RevPar was significantly lower than her comp set d. her hotel's ADR was much better than her comp set

What is the purpose of a minimum length of stay rate fence in hotel revenue management? - Question and answersTo extend the shoulders on peak demand periods Price is defined as ______ and _________ - Question and answersNonmonitary and Monitary Nonmonitary price is defined as what? - Question and answersEffort Who requires who to sign a parity agreement? - Question and answersThe OTA requires the hotel company In what type of agreements are the "last room available" agreements signed? - Question and answersCorporate What are the three rate fence categories? - Question and answersPhysical Fences (level of service/amenities) Non-Physical Fences (time of booking, location of booking: OTA, reservation/cancelation fees) Consumption Rate Fences: Length of stay/Date of stay, shoulder extensions, pprotecting upcoming peaks What are the six pricing mistakes? - Question and answers1. Selling out too soon

2. Not changing your rates
3. Pricing by "gut feel"
4. Over-reacting to competitor price changes
5. Selling rooms on a first come first serve basis
6. Shutting down pricing decisions at end of the day Optimizing the mix of customers each day is critical for Revenue Management, but who are the high value customers? - Question and answersThose who tend to book last Length of stay is a consumption rate fence. In particular, is MinLoS use for shoulder extensions or protecting upcoming peaks? - Question and answersShoulder extensions Why is there market segmentation? - Question and answers1. It allows you to create more pricing strategies
7. It can create demand forecasts
8. It optimizes the hotel's market mix "Values and lifestyles" is a criterion used to segment the market according to...? - Question and answersPsychography Structure of Management Meetings? - Question and answersGeneral Manager Catering Manager Front Desk Manager

Revenue Management Manager Best Rate Guarentee - Question and answersIf you find a cheaper rate you can get the hotel to give you that rate and a discount Pace Reports? - Question and answersTracks rates of actual reservation vs. forecasted reservations