Revenue Management Exam 1
What are the supply and demand structures necessary for revenue management to be
a viable strategy? - Question and answersCyclical Demand
Fixed Supply/Capacity
Perishability/Inability to Inventory
High Fixed Costs as a Percentage of Total Costs
What is the definition of revenue management? - Question and answersData Driven
Strategies to:
Sell the right room
to the right customer
at the right price
at the right moment
on the right distribution channel
What are the right market structures necessary for revenue management to be a viable
strategy? - Question and answersDifference in taste and buying behaviors
Variance in the value of the customer
High value customers tend to book last
What are the major key performance indicators for hotels (comp set metrics)? -
Question and answersOccupancy Index Percent Change Ranking
ADR Index Percent Change Ranking
RevPar Index Percent Change Ranking
What are the categories in a hotel Rate Portfolio for revenue management? - Question
and answersForecasted Demand
BAR
Contract
Transient
Group
Government
ALL HAVE DIFFERENT RATES
Janet is the director of revenue management for a hotel in Blacksburg with 160 rooms,
last Tuesday she was successful renting 120 of her rooms. Her total room revenue was
$20,000. What was her occupancy rate?
a. 55
b. 65
c. 75
d. 85
e. None of the Above - Question and answers75 because occupancy rate is number of
rooms sold / number of rooms available multiplied by 100
, For a hotel, the ____________ is the room price available to the general public with no
restrictions or limitations.
a. CONUS
b. Negotiated Rate
c. Flat Rate
d. BAR
e. Premium Rate - Question and answersd. BAR
______________ occurs when a hotel sells a room at a discounted price when that
room could have been sold for a higher price.
a. Rate Cannibaliization
b. Rate Parity
c. Rate Transparancy
d. Rate Dilution
e. Cross Product Elacticity - Question and answersa. Rate Cannibalization
What is rate parity? - Question and answersSame rate regardless of channel (OTA,
Hotel Website)
What is rate transparancy? - Question and answersWhen someone questions why a
rate is a certain price when someone else is paying something different. You have to be
able to explain why they are paying what they are paying
What is cross product elasticity? - Question and answersThe probablility of gaining
supplementary purchases, given the initial lodging purchase. (example the correlation
between someone staying in the hotel and using the hotel restaurant)
Because of the cyclical demand characteristic of most hotels and the perishability of the
hotel product (rooms), the emphasis of revenue management focuses on __________.
a. inventory management
b. human resources management
c. cost management
d. information systems management
e. demand management - Question and answerse. Demand Management
Janet is the director of revenue management for a hotel in Blacksburg with 160 rooms.
Last week her RevPar index was 117.3, indicating?
a. her hotel's RevPar was significantly better than her comp set
b. her hotel's RevPar was essentially the same as her comp set
c. her hotel's RevPar was significantly lower than her comp set
d. her hotel's ADR was much better than her comp set
What are the supply and demand structures necessary for revenue management to be
a viable strategy? - Question and answersCyclical Demand
Fixed Supply/Capacity
Perishability/Inability to Inventory
High Fixed Costs as a Percentage of Total Costs
What is the definition of revenue management? - Question and answersData Driven
Strategies to:
Sell the right room
to the right customer
at the right price
at the right moment
on the right distribution channel
What are the right market structures necessary for revenue management to be a viable
strategy? - Question and answersDifference in taste and buying behaviors
Variance in the value of the customer
High value customers tend to book last
What are the major key performance indicators for hotels (comp set metrics)? -
Question and answersOccupancy Index Percent Change Ranking
ADR Index Percent Change Ranking
RevPar Index Percent Change Ranking
What are the categories in a hotel Rate Portfolio for revenue management? - Question
and answersForecasted Demand
BAR
Contract
Transient
Group
Government
ALL HAVE DIFFERENT RATES
Janet is the director of revenue management for a hotel in Blacksburg with 160 rooms,
last Tuesday she was successful renting 120 of her rooms. Her total room revenue was
$20,000. What was her occupancy rate?
a. 55
b. 65
c. 75
d. 85
e. None of the Above - Question and answers75 because occupancy rate is number of
rooms sold / number of rooms available multiplied by 100
, For a hotel, the ____________ is the room price available to the general public with no
restrictions or limitations.
a. CONUS
b. Negotiated Rate
c. Flat Rate
d. BAR
e. Premium Rate - Question and answersd. BAR
______________ occurs when a hotel sells a room at a discounted price when that
room could have been sold for a higher price.
a. Rate Cannibaliization
b. Rate Parity
c. Rate Transparancy
d. Rate Dilution
e. Cross Product Elacticity - Question and answersa. Rate Cannibalization
What is rate parity? - Question and answersSame rate regardless of channel (OTA,
Hotel Website)
What is rate transparancy? - Question and answersWhen someone questions why a
rate is a certain price when someone else is paying something different. You have to be
able to explain why they are paying what they are paying
What is cross product elasticity? - Question and answersThe probablility of gaining
supplementary purchases, given the initial lodging purchase. (example the correlation
between someone staying in the hotel and using the hotel restaurant)
Because of the cyclical demand characteristic of most hotels and the perishability of the
hotel product (rooms), the emphasis of revenue management focuses on __________.
a. inventory management
b. human resources management
c. cost management
d. information systems management
e. demand management - Question and answerse. Demand Management
Janet is the director of revenue management for a hotel in Blacksburg with 160 rooms.
Last week her RevPar index was 117.3, indicating?
a. her hotel's RevPar was significantly better than her comp set
b. her hotel's RevPar was essentially the same as her comp set
c. her hotel's RevPar was significantly lower than her comp set
d. her hotel's ADR was much better than her comp set
