Revenue Management Exam Questions and Answers for Hospitality Industry, Exams of Nursing

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Revenue Management Exam 1/ Revenue

Management for the Hospitality Industry Exam

2 & Hospitality Revenue Management Final

Exam Review/ Quizzes with Certified Ans.

Room Night - Answer: The single night's use of a guest room EX: 1 room sold for 3 consecutive nights yields three room nights reference price - Answer: the price perceived by consumers to be the normal price for a product of service Hard constraint - Answer: a supply constraint that cannot be removed regardless of product demand EX: natural gas pipelines, number of hotel rooms

What does the law of supply and demand predict when demand or supply shift? - Answer: - Demand Increase: price increases, quantity increases. -Demand Decrease: price decreases, quantity decreases. -Supply Increase: price decreases, quantity increases. -Supply Decrease: price increases, quantity decreases. What is price fairness? - Answer: A consumer's assessment and associated emotions of whether the difference (or lack of difference) between a seller's price and the price of a comparative other party is reasonable, acceptable, or justifiable What are some factors that can help us predict whether or not a buyer will perceive a price as fair or not fair? - Answer: Price expectation reference price familiarity perceptions Assume the ADR of the competitive set increased significantly (e.g., more than 7 percent) last month. What would be your assessment of the Branchwater's revenue management performance compared to its comp set? - Answer: They are winning the battle with other lodging company's because they are selling more rooms Assume the ADR of the competitive set decreased very significantly last month (e.g., more than 10 percent). What would be your assessment of the Branchwater's revenue management performance compared to its comp set? - Answer: That they are losing the battle with other lodging company's because they are not selling a lot of rooms What is an economic impact analysis? Be able to describe why they are done, and what they show - Answer: -a net increase in the wealth of residents resulting from tourism, measured in monetary terms, over and above the levels that would prevail in its absence

-shown through direct, indirect and induced effects direct economic effects - Answer: -take into account only the immediate effects of the additional demand EX: sales, jobs, wages Indirect economic effects - Answer: All of direct effects can be measured as indirect, but measuring those impacts for other organizations that are indirectly impacted by primary organization EX: vendors at an event Induced economic effects - Answer: Spending of direct and indirect EX: jobs, wages, spending of employees Which one of the following is an accurate statement regarding Scale and Class groups and a single chain? a. A Ritz Carlson hotel in the US can be in one Scale group and a Ritz Carlton hotel in Japan can be in a different Scale Group b. A Ritz Carlson hotel in the US can be in one Class group and a Ritz Carlton hotel in Japan can be in a different Class group c. A Ritz Carlson hotel will always be in the same Scale and Class groups in every country throughout the world d. A Ritz Carlson may choose which Scale and which Class they are in - Answer: c. A Ritz Carlson hotel will always be in the same Scale and Class in every country throughout the world All of the following are good reasons for a hotel to have an additional comp set, expect which one? a. Have a local comp set based upon geography and another based upon a special feature or niche

b. Have different sets for weekday/weekend or group/transient business c. Have one set that you can easily beat and another which is a realistic target d. different entities may not agree, for example, chain versus management company - Answer: c. Have one set that you can easily beat and another which is a realistic target Which is NOT a valid rule related to changing a comp set? a. If adding 2 hotels to a comp set, both must be in different chains b. A single hotel may be added to a comp set if it has been open less than six months Which is NOT a valid rule related to changing a comp set? c. A single hotel may be added to a comp set at any time d. Any change must involve two or more hotels - Answer: c. A single hotel may be added to a comp set at any time Which statement is true regarding RevPar? a. it is almost always higher than ADR b. It can be thought of as a combination of supply and demand c. When a hotel or GM is evaluated, the RevPAR metric is rarely considered d. It can be thought of as a combination of Occupancy and ADR - Answer: d. It can be thought of as a combination of Occupancy and ADR Which one of the following statements is true regarding "sufficiency" as it is related to comp set data?a. If a comp set is not sufficient for 3 consecutive months, you will no longer receive a STAR report b. If a comp set number for just a single month is not sufficient, it will still be displayed on the STAR report c. Percent change number for a single month will appear on the STAR report if either the "This Year" or "Last Year" data is sufficient d. The sufficiency rules are in place to protect the confidentiality of the data - Answer: d. The sufficiency rules are in place to protect the confidentiality of the data

When you receive your STAR report, you see that your RevPAR index was 90 this year compared to 80 last year. What do you know for sure? a. Your hotel outperformed the comp set when it comes to RevPAR both years b. Your hotel outperformed the comp set this year when it comes to RevPAR, but not last year c. Your hotel will have a positive RevPAR Index Percent Change d. Your hotel would have a positive RevPAR Percent change - Answer: c. Your hotel will have a positive RevPAR Index Percent Change What is the descending order of geographic area? - Answer: Continent, Sub-continent, Country, Market, Tract/Sub-Market soft constraint - Answer: a supply constraint that can, with sufficient lead time, and/ or a reasonable expense, be removed or lessened EX: food, hotel decorations price fence - Answer: the specific requirements that describes who is and is not eligible for a special pricing offer consumer surplus - Answer: the difference between the amount a buyer would be willing to pay for a product or service and the amount they are charged fixed pricing - Answer: the practice of a seller charging the same price to all buyers differential pricing - Answer: the practice of a seller charging different prices to different buyers for the same product or slightly different versions of the same product Different pricing strategies - Answer: -time -quantity -location

-payment terms -customer characteristics -bundling inventory management - Answer: the process of allocating and modifying the number of products available for sale at various prices and through various distribution channels revenue - Answer: total amount of sales acieved in a specified time period = number of units sold x unit price supply - Answer: the higher the demand for product, the more of it will be produced by sellers demand - Answer: the higher the price of a product, the less of it will be wanted by buyers ADR= - Answer: total room revenue/total rooms sold Occupancy= - Answer: total rooms sold/total rooms available for sale REVPAR= - Answer: total revenue/total rooms available for sale OR occupancy x ADR REVPASH - Answer: total period revenue/(number of available seats x hours of seat availability) GOPPAR= - Answer: (total revenue - M.C.E.)/ total available rooms Percent changes= - Answer: (this year - last year)/Last year x 100

indexes= - Answer: performance of subject (your) hotel/performance of competitive set hotels x 100 How markets are created - Answer: markets are created based upon the number of hotels in an area and the participation (100+ hotels) How submarkets are created - Answer: submarkets is a geographic subset of a market (30+ participating hotels) Important characteristics of a market - Answer: -no market will ever cross country boundaries -markets are commonly thought of as cities, although they are used to represent more rural areas outside of major cities What is bench marking - Answer: 1. Provides a point of reference to analyze your performance

2. Takes place at property level for individual hotel
3. Corporate level for hotel company
4. Geographic level for tourism organizations Competitive sets - Answer: a group of hotels used primarily for comparison against a subject property, sharing similar qualitative and quantitative features, aiding sales and marketing and often used in management contracts How are Comp sets created - Answer: comp set decision is a joint effort of multiple stakeholders What do you consider when creating a comp set - Answer: the four p's: Participation Proximity Pricing Product

What are important rules to remember when creating a comp set? - Answer: 1. Average number of hotels in a comp set is between 5 and 6

2. Comp set can be created when hotel is under construction
3. Must include 3+ hotels
4. No single property can account for more than 40% OF THE TOTAL ROOMS IN COMP SET
5. When percentages are calculated, the rooms of the subject hotel, as well as the same chain and parent company are excluded An accurate measurement of demand for hospitality products requires the consideration of what 3 factors? - Answer: 1. Desire to purchase
6. Ability to pay
7. Willingness to pay What are the 4 I's and examples of each - Answer: 1. Intangibility - has no physical attributes and as a result impossible for a customer to test, feel, or smell before buying EX: University degree, hotel rating
8. Inconsistency- the service provider cannot provide exactly the same service every time EX: every employee is not the same
9. Inseparability - service cannot be separated from the creator/seller of the product EX: dental care,
10. Inventory - services cannot be easily saved for future use EX: empty seat on an airplane Pricing can be based on customer characteristics, distribution channels, product versioning, quantity, location, time, and payment terms - Answer: 1. Customer Characteristics - senior citizens, students, frequent customers
11. Distribution Channels - booking a reservation beforehand online, going to pizza shop to order a takeout, using sites such as Travelocity.com or expedia.com

3. Product versioning - different seats at baseball game cost different price, first class vs economy seating on airplane
4. Quantity - bucket of beers, every 10th meal is free, family size of chips compared to normal size
5. Location - location of seat at concert, beer at airport is more than beer at bar
6. Time - matinee pricing for movies, higher priced flights during popular times, price cut during end of golf season
7. Payment terms - payment upon delivery of product, payment on credit What are the benefits of selling to high volume buyers - Answer: -Rewards customer who buy a great deal from you -encourages buyers to buy more -customer's business is easier and less costly to your service Acceptable non-geographic hotel industry categories - Answer: Scale and Class Unacceptable non-geographic hotel industry categories - Answer: Guest satisfaction rating Characteristics of scales - Answer: - one of the most popular ways -7 categories: luxury, upper upscale, upscale, upper midscale, midscale, economy, independents -positioned in scale based on ADR Characteristics of classes - Answer: -same categories as scale except no independent group What are the three different hotel industry operation types - Answer: Corporate, Franchise, Independent What does your book say ADR should be analyzed in conjunction with? - Answer: GOPPAR

There are 4 alternative formulas for understanding value when buyers spend money? - Answer: Formula A- Your money on you Formula B - Your money on somebody else Formula C - Someone else's money on you Formula D - Someone else's money on someone else Which alternative value formula/relationship results in the most personal value? - Answer: Formula A - your money on you Which alternative value formula/relationship results in a buyer being most likely to purchase upgrades or more expensive products? - Answer: Formula C

• Someone else's money on you What is the relationship between quality and price, service and price, and both of those relationships with value? - Answer: High quality doesn't represent good value. Nor does a low price represent good value. The relative quality of services old must be well understood. The variation in quality levels, service levels and price affect buyer perceptions of value. What is the relationship between service and price? - Answer: Four I's of Service What is the relationship between quality service and price? - Answer: Perceived benefit-price= value OR (perceived tangible product benefit+perceived intangible service benefit)-price = value (profit) Changes in quality not only impact a customer's perceived value, but impact the prices a seller should set for a product. What hinders a franchisee from substantial increasing or decreasing a products quality? - Answer: Corporate rules and rights

What is the single most important economic concept you can apply to optimize hospitality revenues - Answer: bundling Which one of the following is NOT a location used by the hotel industry? a. airport b. Suburban c. Oceanfront d. Urban - Answer: c. Oceanfront What is a reverse comp set? - Answer: Properties that name your hotel in their comp set In which of the following situations will occupancy increase? a. Supply increase 10% and demand increases 5% b. Supply decreases 5% and demand increase 10% c. Supply increases 5% and demand decreases 5% d. None of these situations will result in an occupancy increase - Answer: b. Supply decrease 5% and demand increases 10% How is building a comp set before a hotel opens beneficial? a. If you create the set before the hotel opens, then the STR sufficiency guidelines do not apply b. Since there is no "subject" property, you can see each hotel's individual data c. There is no benefit to having a comp set before a hotel opens d. The set can be used with other assumptions to forecast future performance - Answer: d. The set can be used with other assumptions to forecast future performance Which of the following can affect the overall strength-ability of a comp set? a. Supply, location, positioning, performance

b. Brand, number of rooms, age, quality c. Independent hotels cannot achieve relatively strong comp sets d. All hotels can achieve very strong comp sets - Answer: a. Supply, location, positioning, performance Which hotel is most likely going to have more than one comp set? a. A 50 room limited service highway location motel b. A 100 room full service airport location hotel c. A 150 room resort location conference hotel with a small water park - Answer: c. A 150 room resort location conference hotel with a small water park How does price fixing affect consumers? a. It increases quality and decreases cost b. It increases quality and increases cost c. It decreases quality and increases cost d. It decreases quality and decreases cost - Answer: c. It decreases quality and increases cost What is the difference between class and scale? - Answer: Scale includes 7 groups, with independents creating their own group Class has 6 groups with independents included

Revenue Management for the Hospitality

Industry Exam 2/ 93 Q&A/ 2024-2025.

Travel Wholesaler - Answer: A large-volume travel industry intermediary who sells to other, smaller-volume travel intermediaries

Statistic - Answer: A number or term used to summarize or to describe a larger collection of information. Examples include sums, averages, and ratios RevPAR - Answer: ADR x Occupancy Percentage = RevPAR Income Statement - Answer: A detailed listing of an operation's revenue and expenses for a specific time period. Also know as the statement of income and expense, profit and loss statement, or P&L RevPOR - Answer: Total (Rooms + Nonrooms) revenue / Total occupied rooms Global Distribution System (GDS) - Answer: A group of companies that electronically connect travel-related businesses such as airlines and hotels with those individuals and companies seeking to buy from them Internet Distribution System (IDS) - Answer: The group of online reservation systems and travel portals that utilize the internet to connect travel-related businesses such as hotels with those individuals and companies seeking to buy from them Net ADR Yield - Answer: Net room rate/ Standard ADR = Net ADR yeild Net Room Rate - Answer: Standard ADR - Distribution channel costs = Net Room Rate GOPPAR - Answer: Total revenue - Managements' controllable expense / Total rooms available for sale = GOPPAR Fade Rate - Answer: A lower room rate offered when a potential rooms buyer exhibits initial price resistance

CPOR - Answer: Short for "cost per occupied room." The total incremental expense associated with the sale of one guest room. Examples include Amenities CPOR, Housekeeping CPOR, and complimentary breakfast CPOR Nights (booked) per Check-Out Today - Answer: Nights booked today / Check-Outs today Nights (booked) per Check-Out to Date - Answer: Nights booked to date / Check-Outs to date Shopper Service - Answer: The unannounced, anonymous and professional evaluation of an organization's employee behavior, productivity and customer service skills. Also known as mystery shopper services Commoditization - Answer: The process by which a product (or service) reaches a point in its development where one brand has no features that differentiate it from other brands, and consumers buy based on price alone Call Center - Answer: A physical location, maintained by a brand, for its customers who prefer to book their room reservations via telephone Loaded (rate) - Answer: The point at which a room rate and its companion rate code have been properly submitted for listing by one or more of a hotel's chosen distribution channels Proprietary Website - Answer: A web address whose content is 100% controlled by a hotel's own management team Search engine results page (SERP) - Answer: The listing of Web pages returned by a search engine in response to a keyword query

Conversion - Answer: The proportion of web site visitors who actually make a guest room purchase. For example, if a site receives 100 hits that result in two bookings, the sites conversion rate is 2% (2/100 = 2%) Link Strategy - Answer: The identification and linking of complementary sites (especially high- traffic sites) that improve a hotel's SERP ranking in response to a keyword query Agency Model - Answer: An arrangement in which a hotel pays a commission (historically, 10% of selling price) to an intermediary for selling its rooms Net Rate - Answer: The amount per room actually received by hotel when selling its rooms through an intermediary. Merchant Model - Answer: A system in which an intermediary obtains rooms inventory at a wholesale rate and then acts as a merchant by selling the rooms to buyers at retail rates Referral Rate - Answer: A web site the searches for and reports information found on other web sites. Also known as a scrapping site or meta search site Opaque Model - Answer: A system in which the room buyer does not know the name of the hotel they have chosen until after they have committed to the purchase price the room Consumer-generated Media (CGM) - Answer: Various online venues such as forums, blogs, wikis, and reviewer sites where those seeking to research and buy products can use information and opinions posted by other consumers before making their buying decision Total RevPAR - Answer: The average rooms and nonrooms revenue generated by each available guest room during a specific period of time

Total (Rooms + Nonrooms) revenue / Total rooms available for sale Room-related Occupation Costs - Answer: Those rooms-related costs incurred directly as a result of selling a guest room. Examples include labor costs, room supplies, and room amenities Also referred to as room-related occupancy cost, occupied room cost, or cost per occupied room (CPOR) Minimum ADR Sales Point Formula - Answer: The lowest room rate that can be charged and still generate enough revenue to pay all rooms-related occupancy cost plus the cost of any distribution channel commissions and franchise-related fees and royalties paid to create the sale Rooms-reltated occupancy costs / Net ADR yield % Gross operating profit (GOP) - Answer: Total revenues less management-controllable operating expenses. GOP can be expressed in total dollars or as a percentage of total revenue GOPPAR - Answer: Total revenue - Management-controllable expense / Rooms available to sell Flow-through - Answer: The relative change in profit dollars expressed as a percentage of the change in revenue dollars GOP this year - GOP last year / Total revenues this year - Total revenues last year Market Share - Answer: The portion (or percentage) of sales in a defined region that is controlled by a single company. For example, in a region where 10, 000 hotel rooms were sold last month, a single hotel having sold 2,300 rooms would have had a 23% market share (2,300/10,000 = 23%)

Metropolitan Statistical Area (MSA) - Answer: A geographic area (as designed by the U.S. Office of Management and Budget) that includes one or more countries or country equivalents that have at least one urban core area of at least 50,000 population, plus adjacent territory that has a high degree of social and economic integration Flag - Answer: A hotel's franchise affiliation. Also commonly referred to as a brand Index Formula - Answer: Performance of Subject (your) Hotel / Performance of competitive set Hotels Supply Share (%) - Answer: Available rooms subject hotel / Available rooms comp set (including subject hotel) Demand Share (%) - Answer: Rooms sold subject hotel / Rooms sold by comp set (including subjects hotel) Revenue Share (%) - Answer: Rooms revenue generated by a subject hotel / Rooms revenue generated by a comp set (including subject hotel) SMERF - Answer: Acronym used to describe Social, Military, Educational, Religious, and Fraternal buyers of hotel rooms and services. Some hoteliers prefer to use the term Sports as oppose to Social when identifying their market mix The European term in use is often MICE (Meeting, Incentive, Conference, and Event) Marketing Mix - Answer: The relative proportion of revenue contributed by each of a hotel's most important guest types (e.g. transient, group, or contact guests)

Ancillary Revenue - Answer: Nonrooms income. Examples include guest's food and beverage purchases, meeting room rental, AV-related income, parking, spa charges, and activity fees. Also known as nonrooms revenue Table Service - Answer: A restaurant style in which guests are served while seated in a dining area Product cost percentage (pricing method) - Answer: A pricing method that relies on product cost percentage targets when determining menu prices Product Cost % - Answer: Cost of product sold / All product sales Item Food Cost % - Answer: Item food cost / Selling price Selling Price - Answer: Item food cost / Item food cost % or Product cost + Contribution margin desired Pricing Factor (foodservice) - Answer: A constant number used to help determine foodservice product menu prices $1.00 / Desired item food cost % Product Cost: plus (Pricing Method) - Answer: Any of a number of pricing methods that consider product cost as well as one or more additional costs when determining selling price Prime Cost - Answer: The sum of the product cost and labor cost required to produce a menu item

Contribution Margin (CM) - Answer: Selling price - Product cost Sales Volume (foodservice) - Answer: The number of a single menu item sold during a defined accounting period Total Revenue - Answer: Selling price x Number (volume) sold Point of Sale (POS) System - Answer: A computer system used to record and retain sales data Deuce - Answer: Restaurant industry jargon for a table that seats two guests Turn (table) - Answer: The number of times a table (or seat) is used during the same dining period. The formula is: Number of guests served / Number of available seats Ambiance - Answer: The feeling, character, or mood associated with a specific location Day Part - Answer: A subsection of the day, during which a specific menu type may be served. For example, the time period between 6am to 10am (breakfast) vs. 11am to 2pm (lunch). Used to target market and to precisely track sales levels Restaurant Row - Answer: Industry slang for a geographic area that contains multiple and competing foodservice operations Menu Mix - Answer: The total number of various food and beverage products (menu items) ordered by guests during a designated time period

Check Average - Answer: The mean amount spent per visit by each restaurant guest during a designated time period (e.g. by day part (lunch or dinner) or calendar period (daily, weekly, or monthly). The formula is: Total revenue / Guest served Price blending (foodservice) - Answer: The process of pricing food and beverage products with different cost ratios in such a way as to optimize revenues in a least cost manner Revenue Center Contribution % - Answer: Revenue Center Sales / Total Revenue Day Part Contribution % - Answer: Day part sales / Total revenue Offsite Catered Event - Answer: An occasion in which a foodservice operation provides food and beverage products, as well as any labor required to serve the products, at a location separate from its primary place of business Banquet Room - Answer: A uniquely designated space available for privately hosted on-site catered events For-Profit (foodservice) - Answer: A foodservice operation whose continued operation is dependent on its ability to generate income in excess of expenses. Also referred to as commercial foodservice operation. Examples include most restaurants, bars, nightclubs, and lounges Nonprofit (foodservice) - Answer: A foodservice operation whose continued operation is not solely dependent on its ability to generate income in excess of expenses. Also referred to as a noncommercial foodservice operation or a subsidized operation.

Examples include those foodservice facilities operated in schools, colleges, hospitals, and extended-care facilities Accounting Period - Answer: A defined period of time (e.g. a year, month, week, day or hour) in which an RM wishes to report or analyze an operation's revenue generation Top-line Revenues - Answer: Foodservice jargon for an operation's total income. Used to differentiate the operation's gross revenue production from its bottom line or net income (profit) production Same-store Sales - Answer: Sales revenues achieved by operations that have been open for more than one year. Also referred to as same-store revenue, comparable (comp) sales, or like for like (LFL) sales. This statistic allows RMs and others to determine which portion of increased revenue has come from real sales growth and which portion from the opening of new units or stores. The distinction is important because in most cases a saturation point, at which time future sales increases must be driven by same stores sales growth, will likely occur Revenue per square foot - Answer: An operation's total annual revenue divided by the number of square occupied by the operation. Also referred to as sales per square foot Occupational Costs - Answer: Expenses related to occupying and paying for the physical facility that houses a foodservice unit. Some examples of occupancy costs include rent, utilities, and facility insurance Other Expense (foodservice) - Answer: Those operating costs that are neither food nor labor costs Revenue per available seat hour (RevPASH) - Answer: Total Revenue / Available Seat hours

Ownership of Responsibility - Answer: The individual or department with primary accountability for a defined task or mission Bottom Line - Answer: Industry slang for an organization's profits, or final outcomes USAR - Answer: Short for Uniform System of Accounts for Restaurants. The standardized accounting procedures for the restaurant industry, including those related to the presentation of operating results in the Statement of Income and Expense (Income Statement) Barriers to Entry - Answer: Obstacles in the path of a business seeking to gain entrance to a new market Cyclical (business) - Answer: A business affected by identifiable but only marginally predictable fluctuations in economic activity Seasonal (business) - Answer: A business affected by an identifiable and very predictable fluctuation in economic activity Pipeline (hotel) - Answer: The lodging industry term used to describe those hotels that are in various phases of development but which have not yet opened Distressed Market - Answer: An economic condition that results in revenue levels that are significantly (10% or more) below historic norms Leveraging - Answer: The use of borrowed money to acquire business assets

Displacement Analysis (revenue) - Answer: A structured examination of the relative merits of choosing among alternative pieces of business for the purpose of identifying the piece that optimizes revenue Turnover Rate (employee) - Answer: The number of employees who leave an organization each year, expressed as a percentage of the average number of workers employed by the organization. High turnover rates typically mean less experienced employees SWOT Analysis - Answer: Strengths, Weaknesses, Opportunities, and Threats analysis -- a systematic approach to assess an organization's current environment as part of the strategic planning process Distributable (expense) - Answer: A cost that can be reasonably assigned to one specific department with an operation. Also referred to as distributed expense. Examples in the lodging industry include the cost of rooms-related labor, amenities, and cleaning supplies-- all expenses that are distributable to the property's rooms (housekeeping) department. Undistributable (expense) - Answer: A cost that cannot reasonably be assigned to only one specific department within an operation. Also referred to as an undistributed expense. Examples include rent, advertising, taxes, and insurance. Recession - Answer: A widespread and significant decline in economic activity and employment, typically lasting from six months to a year Value - Answer: Perceived Benefit - Price

Hospitality Revenue Management Final Exam

Review/ 196 Quizzes & Ans.

What is the industry term used to describe the sum of prices paid by a business's customers? - Answer: total revenues Historically, what concept have hospitality managers chiefly used to calculate their selling prices? - Answer: costs What is an algebraic equivalent of the formula: Sales = Costs + Profit? - Answer: profit=sales- costs What is the name for the net value achieved by both parties in a business transaction? - Answer: profit What element is not present in a barter economy? - Answer: money What is the formula used to calculate an owner's ROI? - Answer: Owner's Investment Return / Owner's Original Investment = Owner's Return on Investment 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? - Answer: constrained supply Which industry was the first to use Yield Management principles? - Answer: airline What is the industry term used to describe the selling of rooms which are not actually available for sale? - Answer: overbooking What is the formula used to calculate Average Daily Rate? - 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? - 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? - Answer: $140 What is the industry term for the average revenue generated by each occupied guestroom during a defined period of time? - Answer: RevPOR What is the formula used to calculate GOPPAR? - 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? - Answer: market segment What is a rack rate? - 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) - 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? - 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? - Answer: target market