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Revenue Management Final Exam Practice Questions, Exams of Business Administration

A comprehensive set of practice questions and verified solutions for the revenue management final exam. It covers a wide range of topics related to the tourism industry, including fixed and variable costs, pricing strategies, market segmentation, forecasting techniques, overbooking, and revenue management extensions. The questions delve into the key concepts and principles of revenue management, equipping students with the knowledge and skills needed to excel in this field. The detailed solutions ensure a thorough understanding of the subject matter, making this document a valuable resource for students preparing for their final exam.

Typology: Exams

2023/2024

Available from 08/13/2024

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Download Revenue Management Final Exam Practice Questions and more Exams Business Administration in PDF only on Docsity! Revenue Management Final exam practice Questions with Complete Verified Solutions 2024 What is bigger in the tourism industry, fixed costs or variable costs? fixed costs are bigger -Think of an airplane: staffing, airport fees (fixed) - huge amount of the costs for airplanes come from fixed costs; food, fuel (variable) - not as easy to determine the variable costs We can reduce prices (even below total cost per room), as long as the reduced price covers, fixed cost per room or variable cost per room? We can reduce prices as long as the reduced price covers the variable cost per room -because we are going to have the fixed costs not matter if we have the person in the room or not High Value Customers tend to book early or last? last Do we sell "time blocks" or "physical products"? time blocks What implication do time blocks have? we cannot store it for tomorrow, it is gone once it is not sold for that day "I want my hotel to be the first to sell out in the market": Correct or incorrect? incorrect RM can be organized with different levels regarding the people involved. How many? Which ones? Property Level - Corporate Level - 3rd Party Services What does a booking curve represent? the expected number of bookings for each day until the arrival date -forecasted bookings What does a pace report track? The OTB reservations against the forescasted reservations Who attends the weekly RM meetings? -Revenue manager -General manager Sales manager -Rooms manager ***and sometimes -Food and Beverage management -Marketing -HR management How many internal performance indicators do we have? 6: OR, ADR, RevPar, and the percent changes of each of them How many external performance indicators do we have? 6: OR index, ADR index, RevPar index, and the percent changes of each of them What is the minimum number of hotels in a comp set? 4 What is the threshold in the OR, ADR and RevPar indexes that determines the point we are outperforming the comp set? 100 Price from a marketing standpoint includes both monetary and ________________costs non‐monetary price The amount of money charged for a good or service. BAR and BRG The hotel makes a promise that the room prices found on their website are the best rates compared to any other sites. Example of BAR guarantee? If you found a better rate then you will get that rate plus some additional discount (within 24 hours of making the reservation) in PA Who requires whom to sign a rate parity agreement? OTA In what type of rates are the "Last Room Available Agreements" signed? Corporate Consumer reference prices: what is bigger, the increase in demand derived from reducing a rate by $100 or the decrease in demand resulting from augmenting a rate by $100? the decrease in demand resulting from augmenting a rate by $100 -because it is more impactful What is more appealing to hotel guests: a discount of $10 in three supplementary products (total savings are $30), or a discount of $30 in just one supplementary product so that it becomes free? a discount of $30 in just one supplementary product so that it becomes free -Discount in just one supplementary product so that it becomes free is more appealing to a guest Rate portfolio The matrix of available rates by forecasted occupancy new overall reservation forecast = OTB reservations / value in the booking curve future = divide In condo hotels, is the disparity in quality of rooms higher or lower than in non-condo hotels? higher -because of the owner of the room is an individual upselling higher quality product at additional price -Additional products at additional price (room quality and supplementary products) upgrading higher quality product at the same price, allocated on a space available basis -The value of the "feeling valued" / "pleasant surprise" cross selling selling additional products or services to an existing customer -when you add in breakfast, dinner, etc In what stage can upselling actions be implemented? At booking? A few days before arrival? At arrival? Traditionally at arrival, but now can do more in advance In what sense have the groups been regarded as a "filler" market? Groups as a filler market during hotels down time to use it as a filler which is a traditionally view. Now, hotels implemented the group displacement analysis because they realize that groups may not spend as much so they want to see if they should accept them or not -Reason why we do the group displacement analysis Who books first, groups or transient? Groups book first, can be up to two years in advance In a group displacement analysis, what do you compare? The total value of the transient business that would be displaced if the group business were accepted. Extensions of Revenue Management Catering Restaurants Entertainment Attractions What does RPASH stand for? Revenue per Available Seat Hour What is a "dessert room"? implicates that you will spend more money on dessert and alcohol, and creates higher turnover because you are making a new table available by moving them to a different room An example of a conflict between market segments? skiing forbid snowboarding -because they didn't want the snowboarders to mess up the snow for the skiers they just want to ski and that snowboarders tend to be more aggressive Which two models can we find within the indirect distribution channels? Agent model vs Merchant model what is the difference between Agent model vs Merchant model? Commission vs margin -Agent model there is the price of the room and there is a 10% commission -Merchant model is the one that buys the room and then sells it for an added margin According to the Phocuswright Report (2018), more than half (52%) of all U.S. travel was booked online or offline? offline In what types of tourism products is the offline system predominant? Packages and Cruises What's the proportion of offline business in these two types of tourism products? Two thirds On average, what is the comission OTAs charge to branded and independent hotels? From 10% (branded hotels) to 30% (independent hotels) Marriott strongly depends on OTAs: 88% of its bookings come through OTAs. True or False? False: it is the other way around. Which industry is more fragmented and atomized: the airline or the hotel industry? Hotel industry - have 10% of the market share, meaning that the OTAs call the shot because 90% goes to them -whereas airlines have a lot of companies and there is not a dominant one (80% of the market share) Why the tourism distribution system is sometimes called a duopoly? Expedia and Priceline What's the new name of Priceline? Bookings Holding What are the essential knowledges and skills of the future Revenue Manager? The strategic view of revenue management. Obviously, it will depend on the type of hotel: from basic calculations in Excel to interpretation with sophisticated software What percentage of hotels in the US uses a revenue management system? And in Europe? 10% in the US and 6% for Europe Name some of the actors that are disrupting today's online travel? AirBnB, Google, Amazon (used to have a travel, but expected to come back)