Chapter 1: What's Revenue Management (RM)?Exam Questions With 100% Correct Answers

Definition of Revenue Management (RM) - ANSWER-Selling the right product (rooms, space, spa, restaurant...), to the right customer (group, transient, catering, local...), at the right time (days out, years, time of the day...), for the right price (rate, price, package...always aligned with current & future demand/supply MARKET condition). Average Daily Rate (ADR) or Average Room Rate - ANSWER-Figure derived by dividing actual daily revenue by the total number of rooms sold: Actual Daily Revenue / Total # of rooms sold. Revenue per Available Room (RevPAR) - ANSWER-The daily revenue of a hotel divided by the total number of available rooms at that hotel: Daily hotel revenue / Total # of available rooms in hotel. Revenue Management System (RMS) - ANSWER-The computer system a hotel uses as a tool to assist with the maximization of revenue. The system typically contains information on the hotel's availability, room types, stay patterns (future and historical), ALOS, etc. The systems can be automated or manual.