Revenue Management Exam 1 – 70 Q’s and
A’s
Room Night - -The single night's use of a guest room
EX: 1 room sold for 3 consecutive nights yields three room nights
-reference price - -the price perceived by consumers to be the normal price
for a product of service
-Hard constraint - -a supply constraint that cannot be removed regardless of
product demand
EX: natural gas pipelines, number of hotel rooms
-soft constraint - -a supply constraint that can, with sufficient lead time,
and/ or a reasonable expense, be removed or lessened
EX: food, hotel decorations
-price fence - -the specific requirements that describes who is and is not
eligible for a special pricing offer
-consumer surplus - -the difference between the amount a buyer would be
willing to pay for a product or service and the amount they are charged
-fixed pricing - -the practice of a seller charging the same price to all buyers
-differential pricing - -the practice of a seller charging different prices to
different buyers for the same product or slightly different versions of the
same product
-Different pricing strategies - --time
-quantity
-location
-payment terms
-customer characteristics
-bundling
-inventory management - -the process of allocating and modifying the
number of products available for sale at various prices and through various
distribution channels
-revenue - -total amount of sales acieved in a specified time period
= number of units sold x unit price
-supply - -the higher the demand for product, the more of it will be
produced by sellers
, -demand - -the higher the price of a product, the less of it will be wanted by
buyers
-ADR= - -total room revenue/total rooms sold
-Occupancy= - -total rooms sold/total rooms available for sale
-REVPAR= - -total revenue/total rooms available for sale
OR
occupancy x ADR
-REVPASH - -total period revenue/(number of available seats x hours of seat
availability)
-GOPPAR= - -(total revenue - M.C.E.)/ total available rooms
-Percent changes= - -(this year - last year)/Last year x 100
-indexes= - -performance of subject (your) hotel/performance of
competitive set hotels x 100
-How markets are created - -markets are created based upon the number of
hotels in an area and the participation (100+ hotels)
-How submarkets are created - -submarkets is a geographic subset of a
market (30+ participating hotels)
-Important characteristics of a market - --no market will ever cross country
boundaries
-markets are commonly thought of as cities, although they are used to
represent more rural areas outside of major cities
-What is bench marking - -1. Provides a point of reference to analyze your
performance
2. Takes place at property level for individual hotel
3. Corporate level for hotel company
4. Geographic level for tourism organizations
-Competitive sets - -a group of hotels used primarily for comparison against
a subject property, sharing similar qualitative and quantitative features,
aiding sales and marketing and often used in management contracts
-How are Comp sets created - -comp set decision is a joint effort of multiple
stakeholders
A’s
Room Night - -The single night's use of a guest room
EX: 1 room sold for 3 consecutive nights yields three room nights
-reference price - -the price perceived by consumers to be the normal price
for a product of service
-Hard constraint - -a supply constraint that cannot be removed regardless of
product demand
EX: natural gas pipelines, number of hotel rooms
-soft constraint - -a supply constraint that can, with sufficient lead time,
and/ or a reasonable expense, be removed or lessened
EX: food, hotel decorations
-price fence - -the specific requirements that describes who is and is not
eligible for a special pricing offer
-consumer surplus - -the difference between the amount a buyer would be
willing to pay for a product or service and the amount they are charged
-fixed pricing - -the practice of a seller charging the same price to all buyers
-differential pricing - -the practice of a seller charging different prices to
different buyers for the same product or slightly different versions of the
same product
-Different pricing strategies - --time
-quantity
-location
-payment terms
-customer characteristics
-bundling
-inventory management - -the process of allocating and modifying the
number of products available for sale at various prices and through various
distribution channels
-revenue - -total amount of sales acieved in a specified time period
= number of units sold x unit price
-supply - -the higher the demand for product, the more of it will be
produced by sellers
, -demand - -the higher the price of a product, the less of it will be wanted by
buyers
-ADR= - -total room revenue/total rooms sold
-Occupancy= - -total rooms sold/total rooms available for sale
-REVPAR= - -total revenue/total rooms available for sale
OR
occupancy x ADR
-REVPASH - -total period revenue/(number of available seats x hours of seat
availability)
-GOPPAR= - -(total revenue - M.C.E.)/ total available rooms
-Percent changes= - -(this year - last year)/Last year x 100
-indexes= - -performance of subject (your) hotel/performance of
competitive set hotels x 100
-How markets are created - -markets are created based upon the number of
hotels in an area and the participation (100+ hotels)
-How submarkets are created - -submarkets is a geographic subset of a
market (30+ participating hotels)
-Important characteristics of a market - --no market will ever cross country
boundaries
-markets are commonly thought of as cities, although they are used to
represent more rural areas outside of major cities
-What is bench marking - -1. Provides a point of reference to analyze your
performance
2. Takes place at property level for individual hotel
3. Corporate level for hotel company
4. Geographic level for tourism organizations
-Competitive sets - -a group of hotels used primarily for comparison against
a subject property, sharing similar qualitative and quantitative features,
aiding sales and marketing and often used in management contracts
-How are Comp sets created - -comp set decision is a joint effort of multiple
stakeholders
