Revenue Management Final Exam Questions and Answers, Exams of Marketing Management

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REVENUE MANAGEMENT FINAL EXAM 2024-

2025 q

Historically, what concept have hospitality managers chiefly used to calculate their selling prices? - ANSWER>>Cost

The algebraic equivalent of the formula "Sales = Costs + Profit" is: - ANSWER>>Profit= Sales- Costs

What is the fundamental assumption upon which the concept of consumer rationality is based?

• ANSWER>>Buyers act in ways that are of personal benefit to them

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?

• ANSWER>>Understanding customers

What is the specialized branch of accounting that focuses on recording and analyzing the expenses incurred by an organization? - ANSWER>>Cost accounting

What is created when a seller communicates to a buyer a description of a product to be sold and the price at which that product will be sold? - ANSWER>>Value Proposition

What is the revenue management term used to describe the perceived benefit gained, minus the price paid, in a business transaction? - ANSWER>>Value

What's not present in a barter economy? - ANSWER>>Money

Formula for calculating GOPPAR - ANSWER>>Total revenue- Management Controllable Expenses)/ Total Available room

What is the industry term for a customer group which can be readily identified by one or more common characteristics? - ANSWER>>Market Segment

Which of the following terms would be included in the Place portion of a hotel's marketing mix?

• ANSWER>>Distribution channels

What is the name for the value given up by a buyer and a seller in a business transaction? - ANSWER>>Price

Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an example of what type of pricing? - ANSWER>>Two-tiered pricing

What is the industry term for the point at which an organization's revenues exactly equal its costs? - ANSWER>>Break-even point

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 name for the net value achieved by both parties in a business transaction? - ANSWER>>Profit

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>>

Assume an equilibrium price (P1) is in place for a product. What would the law of supply and demand predict as an outcome if demand for that product increased? - ANSWER>>the new price (P2) would be higher than the previous price (P1) and supply would increase.

According to Alfred Marshall's work, if the price of a product is lower than the natural, or equilibrium price, what will happen? - ANSWER>>the demand for the product would exceed its supply.

Which of the following lodging costs is a fixed cost? - ANSWER>>Mortgage payments

Which of the following foodservice costs is a variable cost? - ANSWER>>Food

What is the fundamental assumption upon which the Law of Supply is based? - ANSWER>>The higher the price of a product, the more of it will be produced by sellers

Which of the following statements about unit costs in the hospitality industry is true? - ANSWER>>Unit costs will vary based upon how high or low an item is priced

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? - ANSWER>>Because fixed costs are incurred even if no guests are served or rooms are sold

What concept is displayed by the intersecting point on a supply and demand curve? - ANSWER>>An estimate of the amount of a product that would be purchased at a known price and point in time

What is the specialized branch of accounting that focuses on recording and analyzing the expenses incurred by an organization? - ANSWER>>Cost accounting

What must be true if a product producer is to continue creating and selling products? - ANSWER>>Revenue must exceed costs

Which of the following statements about the relationship between costs and pricing is true? - ANSWER>>An appropriate selling price for a product or service must dictate its allowable costs.

What is the formula used to calculate an owner's ROI? - ANSWER>>Total ROI / cost of investment

ADR formula - ANSWER>>total room revenue / # of rooms sold

What is a rack rate? - ANSWER>>the price of rooms when no discounts of any type are offered.

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%

what is total period revenue divided by number of available seats times hours of seats availability? - ANSWER>>RevPash

What is the industry term used to describe the sum of prices paid by a business's customers? - ANSWER>>Total Revenues

What is the industry term used to describe the selling of rooms which are not actually available for sale? - ANSWER>>Overbooking

which industry was first to use yield management principles? - ANSWER>>Airline

What is the industry term for the average revenue generated by each occupied guestroom during a defined period of time? - ANSWER>>RevPOV

What is the term used to describe efforts undertaken to encourage travel and tourism to a specific geographic area or attraction? - ANSWER>>Destination Marketing

What is the term used to describe the potential customers to whom a business's marketing activities and messages are directed? - ANSWER>>The target market

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 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? - ANSWER>>Inconsistency

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? - ANSWER>>Inventory

Penny Larson is travelling to San Francisco for a personal vacation. Which of economist Milton Friedman's buyer value formulas would apply to her purchase of the hotel rooms she will need during her trip? - ANSWER>>Spending her own money on herself

What type of benefit is lacking in material qualities and is not able to be touched or seen but nonetheless can still be perceived? - ANSWER>>intangible

Penny Larson is travelling to San Francisco on business. Her company will reimburse 100% of her travel expense. Which of economist Milton Friedman's buyer value formulas would apply to her purchase of the hotel rooms she will need during her trip? - ANSWER>>Spending someone else's money on herself

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? - ANSWER>>Intangibility

What will be the typical case in an auction when the price bid for the item being sold is very low? - ANSWER>>The potential bidders will be high

What special challenge do buyers of hospitality products such as hotel guestrooms or restaurant meals face? - ANSWER>>Difficulty in quality evaluation prior to purchase

Penny Larson is buying a $100.00 restaurant gift card as a present for her niece who is graduating from hospitality management school. Which of economist Milton Friedman's buyer value formulas would apply to her purchase? - ANSWER>>Spending her own money on someone else

What is the most common guest complaint in the food service industry? - ANSWER>>Service quality

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? - ANSWER>>Inventory

If quantity and quality are held constant how will a reduction in price affect buyers' perceptions of value? - ANSWER>>Perceived value will increase

Which formula represents a buyer's view of a sales transaction? - ANSWER>>Perceived value- selling price= Personal Profit

Penny Larson is a travel agent arranging a one-week San Francisco vacation for Mr. and Mrs. Rafael Ochoa. Which of economist Milton Friedman's buyer value formulas would apply to her purchase of the hotel rooms the Ochoa's will need during their trip? - ANSWER>>Spending someone else's money on someone else.

What is the most common guest complaint about hotel guest rooms? - ANSWER>>Service deficiencies

Which two factors do successful revenue managers employ when they devise and implement strategic pricing plans? - ANSWER>>Data management and insight

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? - ANSWER>>Inseparability

Consider the formula: (A + B) - C=D Where: A = Perceived tangible product benefit B = Perceived intangible service benefit. C = Price. D = Value. If all other variables are held constant, which statement is also true? - ANSWER>>As C (Price) decreases, D (Value) increases.

Randall is the revenue manager for a franchisee who owns a five unit quick service restaurant company. Which feature would be the easiest for Randall to change if he sought to increase the value his company provides its customers? - ANSWER>>Quality of service offered

If quantity and price are held constant how will reductions in product or service quality affect buyers' perceptions of value? - ANSWER>>Perceived value will decrease

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? - ANSWER>>

Hotel revenue managers face hard supply constraints. In which industry below are hard constraints also likely to be encountered? - ANSWER>>Hair Salon

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? - ANSWER>>Implement a differential pricing strategy and allocate the limited supply to those market segments who value the rooms most highly.

What two factors establish a restaurant's weekly customer capacity? - ANSWER>>Number of seats and number of hours open per week

What is the name for the laws and regulations aimed at preventing abusive business behavior or anti-competitive practices? - ANSWER>>Anti-trust legislation

What is the name used to describe a consortium of independent organizations formed to limit competition by controlling the production, distribution and pricing of a product or service? - ANSWER>>Cartel

What is the name of the US legislation that outlawed all contracts and conspiracies that unreasonably restrain interstate trade? - ANSWER>>Sherman Antitrust act

What is the name of the US legislation that prohibits competing hospitality managers from meeting to agree upon the room prices that will be charged for upcoming events or charged to specific groups of customers? - ANSWER>>Sherman antitrust

What is the name of the US legislation that prohibits illegal discrimination in pricing? - ANSWER>>Clayton act

If a hotel charged different room rates based on a room buyer's race, religion, or ethnic background, it would violate: - ANSWER>>Civil rights act

The price perceived by consumers to be the normal or standard price for a product or a service is known as: - ANSWER>>Reference price

The statement that is true about the way buyers generally view variance in a seller's prices is: - ANSWER>>Discounts are viewed more favorably than surcharges

In the revenue management field, the letters "STR" refer to: - ANSWER>>A company that specializes in helping hospitality managers evaluate their effectiveness

The hospitality management position responsible for the housekeeping and front office areas of a hotel is: - ANSWER>>Rooms manager

The hospitality management position responsible for the accounting functions in a hotel is: - ANSWER>>Controller

If consistency across multiple properties was of most importance, a Revenue Manager would likely report to: - ANSWER>>A corporate level executive

According to the most recent Hospitality Sales & Marketing Association International (HSMAI) survey, the largest percentage of hotel revenue managers report to: - ANSWER>>Their hotel's general manager

The group of employees most responsible for implementing the revenue optimization strategies and tactics developed by a revenue management team is: - ANSWER>>FOM's

What vehicle do effective revenue managers use to best develop and evaluate their organizations' pricing and revenue management strategies and tactics? - ANSWER>>regular strategy meetings

The individual who should lead the revenue management efforts of a lodging or foodservice organization is: - ANSWER>>A qualified revenue manager

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? - ANSWER>>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? - ANSWER>>Current Data

In a limited service hotel, what is the incremental expense incurred in selling one guest room? - ANSWER>>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? - ANSWER>>Denied (reservation)

Ray sold 100 rooms on Monday at an ADR of $150.00. He sold 150 rooms on Tuesday at an ADR of $200.00. What was his ADR for the combined days of Monday and Tuesday? - ANSWER>>$

Peggy is the revenue manager at a 1500 room hotel. For next Friday Peggy's PMS shows 300 check-outs, 900 stayovers, 250 transient arrivals and a 200-room group block that begins a three-day stay on that day. What is Peggy's current rooms available for sale for next Friday? - ANSWER>>150 Rooms

What is the lodging industry term for a revenue management strategy that instructs reservationists to decline any room reservation request that does not equal or exceed the pre- determined minimum number of nights allowed? - ANSWER>>MLOS

Amanda is the revenue manager of a hotel. When she opened her e-mail last Friday she found a message from the Executive Director of the state dental association asking Amanda for a formal price quote on rooms and meeting space needed by the association for their annual conference. What would Amanda call this inquiry? - ANSWER>>RFP

What is the name for the rooms-related report that would identify the number of group rooms currently on the books as well as the rate or speed at which group rooms are currently being sold? - ANSWER>>Pace report

What is the formula revenue managers use to calculate the percentage change in sales which has occurred from the last accounting period to the present period? - ANSWER>>(Total sales this period- total sales last period)/ Total sales last period x 100

What is the primary reason for forecasting future room demand? - ANSWER>>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? - ANSWER>>

In the lodging industry, when is a guest considered to be an over-stay? - ANSWER>>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? - ANSWER>>When a significant financial incentive exists for exceeding the forecast

In the lodging industry what factors would be overinflated to produce an unrealistically high RevPAR forecast? - ANSWER>>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? - ANSWER>>Eliminate discounts

What is the most likely result of a revenue manager's decision to reduce rack room rates during periods of reduced demand? - ANSWER>>Occupancy 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? - ANSWER>>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? - ANSWER>>the number of potential buyers will decline

What is one consistent characteristic of desirable rooms revenue? - ANSWER>>it leads to higher GOPPAR levels

What is the industry term used to describe all of a hotel's unique or distinct forms of guestroom products available for sale? - ANSWER>>rooms inventory

What is a room code? - ANSWER>>A property-specific description used to identify a particular room product

Which of the following is not typically used by revenue mangers to designate specific room products sold in their hotels? - ANSWER>>Price

What is the lodging industry term used to describe two independent data management systems that have been electronically connected? - ANSWER>>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 guest? - ANSWER>>ADR and RevPAR would increase and occupancy % would be unchanged

What are two synonymous lodging industry terms used to identify the difference between the purchases a group pledges to make and the purchases it actually makes? - ANSWER>>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 airlines accepts Tanika's quote for both price and availability, what type of room rate will the hotel and airline have agreed upon? - ANSWER>>Contract rate

Expedia.com wants Jessie, the revenue manger 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? - ANSWER>>Last room available

Angelina is the revenue manager at the 1000 room Bay hotel. Tonight she forecasts 600 stay- overs and 400 arrivals. Assume Angelina is accurate in forecasting a 5% no-show rate. How

many additional reservations could Angelina accept before she would be required to walk an arriving guest? - ANSWER>>

What is true about a revenue manager's rooms demand forecast? - ANSWER>>It is based on customer demand at an established price

In the airline industry, airline companies establish ticket prices. In the lodging industry, who is responsible for establishing room selling prices? - ANSWER>>Hotel owners or their designees

In the lodging industry, what is a rack rate? - ANSWER>>A room's selling price when no discounts of any type are offered

What is true about discounts offered on the selling price of hotel rooms? - ANSWER>>they should be easily explainable and defensible

In which situation would a customer-centric revenue manager likely implement a special event rate? - ANSWER>>During a local festival that would fill all of the area hotels

Hanna is the revenue manger at the Waterford hotel. For the first week in July next year she has determined her hotel will accept reservations for guests seeking to arrive on July 1st July 2nd or July 3rd; but not on July 4th. Which of the following revenue management control (restriction) strategies is she using? - ANSWER>>CTA

Which of the following is not a strategy typically used by revenue managers to optimize revenue during periods of high demand? - ANSWER>>Implement rack rate discounts to maximize occupancy

To optimize revenues while enhancing property operations, which strategy pair should revenue managers seek to implement? - ANSWER>>Maximization of room codes, minimization of rate codes

What strategy should be put into action when revenue managers implement special event rates? - ANSWER>>Enhance guest value by providing product and/or service enhancements

which of the following is not a hotel intermediary? - ANSWER>>Front desk agents

What was the original purpose of THISCO? - ANSWER>>To develop a single GDS connection for major hotel companies

Lani is the revenue manager at the Aloha Inn. In which situation would Lani optimize the Inn's gross rooms revenues? - ANSWER>>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? - ANSWER>>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? - ANSWER>>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? - ANSWER>>The reservation nights booked per check out for last week was.

What is true about the calculations required to calculate the following Net ADR Yield formula? - ANSWER>>Standard ADR (−) Distribution Channel Costs (=) Net Room Rate

for which distribution channel type do hotels typically employ a shopper's service - ANSWER>>Sales made via the telephone

Which is most often true about room sales made by a hotel's group sales department? - ANSWER>>ADRs are lower than average and Net ADR Yield is higher than average

How are most CVBS in the United States funded? - ANSWER>>By a combination of hotel occupancy taxes and membership dues

Which statement does not accurately describe a non-electric distribution channel? - ANSWER>>CRS is a non-electric distribution channel

Which of the following rooms marketing strategies would contribute to the commoditization of hotel rooms? - ANSWER>>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? - ANSWER>>CRS

Which components of the hotel industry's current reservation system currently offers its users the ability to simultaneously see comparative hotel rate information? - ANSWER>>GDS and IDS

Where on a hotel's statement of income and expense (income statement) does the 10th Edition of the Uniform System of Accounts for Lodging Industry (USALI) recommend travel agency commissions be recorded? - ANSWER>>The rooms expense portion

Which common IDS room sales model is most dependent on selling price for its revenue generation? - ANSWER>>Opaque model

What is true about proprietary web sites administered by a hotel's franchisor? - ANSWER>>Content changes must be implemented by the brand's managers

Lara's rack rate is $299.99. She has been asked to bid on 200 rooms nights needed by a travel agent seeking housing for a group of seniors touring the area by bus. The travel agency has requested Lara provide her a net (non-commissionable) rate. Lara's hotel typically pays a 10% travel agency fee. What would be Lara's per room night net non-commissionable bid for these rooms if she does not lower her rack rate? - ANSWER>>269.

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? - ANSWER>>increased Net ADR Yield, increased GOPPOR

Hanna is the revenue manger at the Waterford hotel. For a Saturday in the future she has determined her hotel will accept reservation only for those guests seeking to stay for two or more days. Which of the following revenue management control (restriction) strategies is she using? - ANSWER>>MLOS

Which statement about revenue management in the hospitality industry is true? - ANSWER>>Its effective implementation requires intuition AND data analysis.

What is value-based pricing? - ANSWER>>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? - ANSWER>>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? - ANSWER>>Fixed pricing

What is true for franchised hotel operations in the United States? - ANSWER>>Their prices are established by their hotel owners

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? - ANSWER>>Consumer surplus

What is the relationship between differential pricing and consumer surplus? - ANSWER>>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? - ANSWER>>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? - ANSWER>>Arbitrage

What is the purpose of a price fence or barrier? - ANSWER>>To identify who is and who is not eligible for a special pricing offer.

Which differential pricing strategy would in most cases be illegal or unethical if implemented? - ANSWER>>Pricing based on the ethnicity of the buyer.

The use of a formal customer rewards program is an example of what type of differential pricing strategy? - ANSWER>>Pricing based on customer characteristic

The requirement that a buyer present a coupon at the time of purchase is an example of what type differential pricing strategy? - ANSWER>>Pricing based on customer characteristic

The premium prices charged for dinner served at the restaurant Le Jules Vernes on the second level of the Eiffel Tower in Paris, France can be attributed, in part, to which type of differential pricing strategy? - ANSWER>>Pricing based on location

A business hotel's promotion targeting local area residence and designed to offer them significantly reduced room rates on Sunday nights is an example of which type of differential pricing strategy? - ANSWER>>Pricing based on time

Which statement about high volume buyers in the hospitality industry is true? - ANSWER>>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? - ANSWER>>Pricing based on distribution channel

Net adr yield formula - ANSWER>>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? - ANSWER>>Pricing based on bundling

Which statement about revenue management and revenue optimization is true? - ANSWER>>Revenue management seeks to maximize income while revenue optimization seeks to maximize long-term profits.

What is true about rooms that are sold at prices below a hotel's variable operating costs? - ANSWER>>Decrease in Revpar

Scott is a revenue manager who calculates the following for his hotel: total (rooms +non rooms) revenue/ total occupied rooms - ANSWER>>Revpor

Which is considered a room-related occupancy cost? - ANSWER>>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? - ANSWER>>

A formula to calculate flow-throw for an accounting period is - ANSWER>>GOP This period - gop last period / total rev this period - total rev 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? - ANSWER>>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? - ANSWER>>75%

Last year Carl's hotel had an occupancy index of 120%. From that information, what can be said about Carl's hotel? - ANSWER>>It achieved a higher average occupancy % than its comp. set

Last month Carl's hotel had an ADR index of 125%. In the same month his RevPAR index was 100%. What can be said about Carl's hotel? - ANSWER>>His occupancy index is less than 100%

Last month Carl's hotel had 10,000 available room nights and sold 6,000 room nights. Last month his comp set had an average occupancy of 80%. What was Carl's occupancy index last month? - ANSWER>>75%

Last month Carl's hotel had an ADR index of 105%. What is true about his hotel's ADR last month? - ANSWER>>It was somewhat higher than the ADR of his competitive set

Last month Carl's hotel had an ADR of $200.00. The ADR for his comp. set for the same month was $225.00. Prior to last month, Carl's Year-To-Date ADR index was 110%. What will always be true about his Year-To-Date ADR index when last month's operating results are included in the Year-To-Date data? - ANSWER>>It will be less than 100 percent

This Year-To-Date, Carl's hotel is averaging an ADR of $125.00. The ADR of his comp. set for the same period is $125.00. Assume Carl's comp. set is an appropriate one. What would you recommend Carl do if his occupancy index for the same period is 140%? - ANSWER>>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? - ANSWER>>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? - ANSWER>>96%

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? - ANSWER>>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? - ANSWER>>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? - ANSWER>>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? - ANSWER>>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? - ANSWER>>Increased RevPAR and reduced flow-thru %

Which of the following statements about restaurant pricing methods is true? - ANSWER>>Restaurant industry pricing methods are very different from hotel industry pricing methods

Shaniqua's restaurant utilizes a product cost percentage pricing system. What should be the selling price for a steak dinner she sells if her total plate cost for the dinner is $7.00 and her desired product cost is 25%? - ANSWER>>$28.

Shaniqua's restaurant utilizes a product cost percentage pricing system. She would like to apply pricing factors to make pricing her menus easier. What would be the pricing factor she would use when her desired product cost percentage for an item is 40%? - ANSWER>>2.

Which menu pricing system would utilize an operation's prime costs when calculating its selling prices? - ANSWER>>Product Cost: Plus

In which menu pricing approach would Menu Engineering as proposed by Kasavana and Smith be utilized? - ANSWER>>Contribution Margin Pricing

What is the common feature in the Product Cost: Plus Pricing, the Contribution Margin Pricing and the Product Cost Percentage Pricing systems? - ANSWER>>The amount paid for products

For revenue managers seeking to optimize revenues in their foodservice operations, which statement about menu prices is true? - ANSWER>>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? - ANSWER>>$7.

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? - ANSWER>>$6.

Why can foodservice operators sell a 20 year Scotch at a price higher than a one year old Scotch? - ANSWER>>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? - ANSWER>>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? - ANSWER>>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? - ANSWER>>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? - ANSWER>>Capacity

hy should revenue managers monitor their competitors' prices? - ANSWER>>To keep their own prices on the higher end of their competitors' price ranges.

Which value-related factor does a revenue manager seek to impact if prices for carry-out menu items in a restaurant are 10% less than the price of the same items when they are consumed in that restaurant's dining room? - ANSWER>>Service level

Offering the same menu item in a variety of portion sizes is an example of what type of differential pricing strategy? - ANSWER>>Product versioning

Last night Lara's restaurant served 225 guests and achieved total revenue of $4,500. What was Lara's check average last night? - ANSWER>>$

What foodservice value-related factor is most affected when a revenue manager successfully implements a price blending strategy? - ANSWER>>Menu mix

At Lauren's restaurant the check average is always higher on Saturday night than on any other night. What is the most likely cause of the check average variance she experiences? - ANSWER>>The sales mix