Revenue Management Final 100% VERIFIED ANSWERS 2024/2025 CORRECT, Exams of Business Administration

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Revenue Management Final 100% VERIFIED ANSWERS 2024/2025 CORRECT what is the industry term used to describe the sum of prices paid by a business's customers? -daily receipts -profit -profits less expenses -total revenues -total revenues historically, what concept have hospitality managers chiefly used to calculate their selling prices? -income -revenue -costs -profits -costs what is an algebraic equivalent of the formula: sales=costs+profit? -profit=sales-costs -costs=sales+profits -costs=profit-sales -profit=costs-sales -profit=sales-costs what is the name for the net value achieved by both parties in a business transactions? -revenue -profit -income -expense -profit what element is not present in a barter economy? -product exchange -money -profit -sellers -money what is the formula used to calculate an owner's ROI? -owner's original investment/owner's investment return=owner's return on investment -owner's investment return/owner's return=owner's return on investment -owner's return on investment/owner's original investment=owner's return on investment -$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? -revenue enhancement management -yield management -profit yield management -customer-centric revenue management 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? -the yield market -the comp set -the target market -the centric market the target market what is the term used to describe efforts undertaken to encourage travel and tourism to a specific geographic area or attraction? -goal management -destination marketing -yield intention marketing -objective marketing destination marketing an income statement is also commonly referred to as a(n) -P&L -budget -cash flow -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 -price -product -costs must exceed revenue revenues must exceed costs what is the specialized branch of accounting that focuses on recording and analyzing the expenses incurred by an organization? -tax accounting -financial accounting -managerial accounting -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 Spending someone else's money on someone else Spending her own money on herself Spending her own money on someone else Spending someone else's money on herself spending someone else's money on someone else What special challenge do buyers of hospitality products such as hotel guestrooms or restaurant meals face? Difficulty in price determination prior to purchase Difficulty in quantity selection prior to purchase Difficulty in payment terms determination prior to purchase Difficulty in quality evaluation prior to purchase difficulty in quality evaluation prior to purchase If quantity and quality are held constant how will a reduction in price affect buyers' perceptions of value? Perceived value will decrease Perceived value will increase Perceived value will not change Perceived value will decrease in the short run but rise in the long run perceived value will increase If quantity and price are held constant how will reductions in product or service quality affect buyers' perceptions of value? Perceived value will increase Perceived value will decrease Perceived value will not change Perceived value will decrease in the short run but rise in the long run perceived value will decrease Which of the Four I's of service refers to the fact that the quality of service often depends upon the skill level of the individual who supplies it? Intangibility 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 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 it is best understood by experienced hospitality managers What is value-based pricing? A pricing system based upon a seller's view of product or service value A pricing system based upon a buyer's view of product or service value A pricing system based upon the value of the sum of costs incurred by a seller A pricing system based upon the total amount of profit needed to maintain an ongoing business 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? Return on Investment (ROI) pricing Penetration pricing Loss leader pricing Competitive pricing 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? Demand-based pricing Value-based pricing Segmented pricing Fixed pricing fixed pricing What is true for franchised hotel operations in the United States? Their prices are established by the hotel's brand managers Their prices are established by the hotel owners Their prices are established by their franchisers Their prices are established by their franchiser advisory committees their prices are established by the hotel's brand managers 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? Consumer surplus Consumer rationality Buyer's remorse Value consumer surplus What is the relationship between differential pricing and consumer surplus? Differential pricing is a strategy used by sellers to maximize consumer surplus Consumer surplus prevents the effective use of differential pricing Consumer surplus mandates the use of differential pricing Differential pricing is a strategy used by sellers to minimize consumer surplus 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? Consumer surplus is maximized The majority of any consumer surplus is captured by intermediaries The majority of any consumer surplus is captured by the business The majority of any consumer surplus is retained by the business's customers. 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? Arbitrage Commoditization Consumer surplus staging Articles of trade 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? Pricing based on bundling Pricing based on quantity Pricing based on time Pricing based on payment terms pricing based on bundling Which statement about revenue management and revenue optimization is true? Revenue optimization seeks to maximize income while revenue management seeks to maximize long-term profits Revenue management seeks to maximize income while revenue optimization seeks to minimize income Revenue management seeks to maximize income while revenue optimization seeks to maximize long-term profits Revenue optimization seeks to minimize revenue while revenue management seeks to maximize RevPAR revenue management seeks to maximize income while revenue optimization seeks to maximize long- term profits 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? A. 100 B. 204 C. 2600 D. 5200 5200 Hotel revenue managers face hard supply constraints. In which industry below are hard constraints also likely to be encountered? A. Cereal manufacturing B. Banking C. Hair salons D. Insurance sales hair salons 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? A. Establish one fixed price, then sell to customers on a first come-first served basis until all rooms have been sold 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 B. A property level DOSM C. Their hotel's general manager D. The revenue management team a corporate level executive According to the most recent Hospitality Sales & Marketing Association International (HSMAI) survey, to whom do the largest percentage of hotel revenue managers report? A. A corporate level executive B. Their property level DOSM C. A property level controller D. Their hotel's general manager 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 CVB CTA CTA Which of the following is not a strategy typically used by revenue managers to optimize revenue during periods of high demand? Implement rack rate discounts to maximize occupancy Implement a length-of-stay restriction to maximize occupancy Implement a payment restriction to maximize revenue collections Control allowable arrival dates to maximize occupancy maximization of room codes, minimization of rate codes What strategy should be put into action when revenue managers implement special event rates and expect a sell out? Enhance guest value by implementing rack rate discounts Enhance guest value by removing stay restrictions and stay controls Enhance guest value by providing product and/or service enhancements Enhance guest value by eliminating aggressive upon-arrival up sell programs enhance guest value by providing product and/or service enhancements To optimize revenues while enhancing property operations, which strategy pair should revenue managers seek to implement? Minimization of room codes, minimization of rate codes 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 What is the primary reason for forecasting future room demand? To calculate RevPAR To make pricing-related decisions To make capacity-expansion decisions To up-date Pace reports 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? 370 360 350 340 360 In the lodging industry, when is a guest considered to be an over-stay? When the guest is not scheduled to depart and thus will be using his or her room for at least one more day When the guest has not yet paid his or her bill When the guest checks out of the hotel before his or her originally scheduled check-out date When the guest checks out of the hotel after his or her originally scheduled check-out date 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? When the owner's goal is to encourage local government investment in a property When the property is for sale When a significant financial incentive exists for exceeding the forecast When a significant financial incentive exists for not exceeding the forecast when a significant financial incentive exists for exceeding the forecast In the lodging industry what factors would be over-inflated to produce an unrealistically high RevPAR forecast? ADR and/or Occupancy % GOP and/or GOPPAR CPOR and/or GOPPAR MLOS and/or CTA 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? Eliminate discounts Implement discounts Raise rack room rates Reduce rack room rates 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 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 no IDS fees will be paid on the revenue the new reservation will generate 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? The reservation nights booked per check out for last week was .02 The reservation nights booked per check out for last week was .20 The reservation nights booked per check out for last week was .05 The reservation nights booked per check out for last week was .50 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? Sales made via the GDS Sales made via the IDS Group sales Sales made via the telephone sales made via the telephone Which is most often true about room sales made by a hotel's group sales department? ADRs are higher than average and Net ADR Yield is lower than average ADRs are lower than average and Net ADR Yield is lower than average ADRs are higher than average and Net ADR Yield is higher than average ADRs are lower than average and Net ADR Yield is higher than average ADRs are lower than average and net ADR yield is higher than average How are most CVBs in the United States funded? By a tax imposed by the US Travel and Tourism agency By a combination of state income taxes and membership dues By a combination of hotel occupancy taxes and membership dues By the applicable state-level agency responsible for the state's travel and tourism promotion by a combination of hotel occupancy taxes and membership dues Which statement does not accurately describe a non-electric distribution channel? Non-electric distribution channel tend to have a higher ADRs CVB is a non-electric distribution channel CRS is a non-electric distribution channel A non-electric distribution channel tends to have lower costs in terms of fees assessed CRS is a non-electric distribution channel Which of the following rooms marketing strategies would contribute to the commoditization of hotel rooms? Participation on a web site that lists only a hotel's name and its telephone number Participation on a web site that lists only a hotel's name and expanded definitions of its room codes Participation on a web site that lists only a hotel's name and its location Participation on a web site that lists only a hotel's name and a single rack room rate 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? CRS $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 What is the formula used to calculate flow-through for an accounting period? GOP This Period - GOP Last Period/ Total Revenues This Period - Total Revenues Last Period GOP This Period + GOP Last Period/ Total Revenues Last Period - Total Revenues This Period GOP This Period - GOP Last Period/ Total Revenues This Period + Total Revenues Last Period GOP This Period - GOP Last Period/ Total Revenues Last Period - Total Revenues This Period GOP this period - GOP last period/ total revenues this period - total revenues last period 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? 100% 110% 120% 130% 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? 133% 100% 75% 30% 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 An item's cost should dictate its menu price An item's prime costs should dictate its menu price An increase in an item's cost dictates an increase in its menu price an appropriate menu price should dictate an item's cost Shaniqua's restaurant utilizes a product cost percentage pricing system. She would like to sell an item for $19.95. Her targeted product cost is 40%. With a 40% product cost, what is the amount her kitchen staff can spend on product cost when making this item? $ 0.80 $ 4.99 $ 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. number of guests served RevpASH Check average menu items sold menu items sold For analysis purposes Jay considers his restaurant to have three revenue centers. These are the dining room, the bar and off-site catering. Last month Jay's total revenue was $50,000. Off site catering revenue was $20,000. What percent of Jay's total revenue was contributed by off site catering? 40% 30% 20% 10% 40% For analysis purposes, Jay considers his restaurant to have three revenue centers. These are the dining room, the bar and off-site catering. Last month Jay's bar revenue was 15% of total revenue and off site catering revenue was $20,000. Total revenue was $50,000. What was the amount of revenue generated in Jay's dining room last month? $15000 $22500 $15500 $21500 $22,500 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 $44,000. Total sales were $176,000. What percent of sales were contributed by breakfast? 32% 40% 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? were served in the month. What was Sofia's Labor Cost % for the month? 25% 10% 40% 12.5% 25% 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? $0.25 $10.00 $2.50 $40.00 $2.50 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 Guests Served Per Labor Hour for the month? 2.5 guests 5.0 guests 40.0 guests 4.0 guests 4.0 guests The Busy Bee restaurant has 100 seats. Between 5:00 p.m. and 6 p.m. yesterday the Busy Bee served 75 guests. Revenues during that time period were $3,700. What was The RevPASH achieved by the Busy Bee yesterday between 5:00 p.m. and 6 p.m.? $49.33 $37.00 $133.33 $20.27 $37.00 What would be the seating efficiency % of a restaurant on a day that it had 100 available seats, was open for six hours and served 450 people? 45% 75% 22.2% 133% 75% What would be the typical impact on RevPASH of an increase in guest duration? RevPASH would not change if check average did not change RevPASH would increase if check average did not change RevPASH would decrease if check average did not change RevPASH would increase if check average decreased REVPASH would decrease if check average did not change What formula can revenue managers use to calculate RevPASH? Seat Utilization % (X) Check Average= RevPASH Number of Guests Served (X) Check Average = RevPASH Number of Seats Available (X) Check Average = RevPASH Seat Utilization % (X) Total Revenue = RevPASH 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 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? Franchisor promulgation Brand consolidation Franchisor proliferation Product fusion brand consolidation In the past 20 years what has been the trend regarding the number of hospitality- related business owners choosing to affiliate with franchisors? Their numbers are relatively unchanged Their numbers are decreasing Their numbers are increasing Their numbers increased during the first ten years but more recently have been decreasing their numbers are increasing 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 the their implementation of revenue management-related strategies, tactics and tasks? Franchisee support Internal brand support Brand partner support Distribution channel support 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? The sales representative from the Internet's largest an online travel agency (OTA) Sandstone's company controller The owner of a travel agency that sells large numbers of Sandstone rooms The franchisor representative from one of the brands with which Sandstone has an operating a sandstone's company controller Raymond is a revenue manager working for a franchisor. Raymond is assigned to brand partner support. What would be Raymond's role in this company? Designing on-property revenue management programs Developing supportive partnerships with competitive set hotels Working with business entities chosen by his company to achieve the goals of its brands Supporting the financial reporting efforts of the company's Controller working with business entities chosen by his company to achieve the goals of its brands 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 they do not have it easy because their ideas are often met with skepticism What is the industry term for the individual or department with primary accountability for a defined task? Ownership of responsibility Leadership Financial management Revenue optimization ownership of responsibility What is the area within an organization with primary accountability for the customer relationships developed by that organization? Marketing Sales Distribution Revenue Management sales What is the area within an organization with primary accountability for the management of data related to revenue optimization? Marketing Sales Accounting Distribution accounting What is the area within an organization with primary accountability for the management of the electronic and non-electronic channels related to revenue optimization? Distribution Sales Accounting Marketing distribution What is the area within an organization with primary accountability for the pricing of products and services? Accounting Accounting Revenue Management Marketing revenue management What is the area within a service organization with primary accountability for the guest experience? Distribution Operations Sales Marketing operations What is the area within an organization with primary accountability for inventory management? Distribution Marketing Sales Revenue management revenue management Which would be the most difficult economic concept measured by an organization's financial managers? Revenue Organizational profits Product cost ratios Customers' profits 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 Facility location facility location Assume a hotel is seeking to maintain the integrity of its rate fences by explaining all restrictions (e.g. MLOS, qualifications, or availability dates) applicable to the quoted rates. At what point in the reservation process should the guest be fully informed of the applicable fences? Before the reservation is made After the reservation has been confirmed 3-7 days prior to guest arrival At guest check-in before the reservation is made