Revenue management final/ 121 Quizzes with
Definitive Solutions.
ADR formula - Answer: Total Rooms Revenue / Total Rooms Sold
Value proposition - Answer: 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
Owners’ ROI formula - Answer: Owners Investment Return/ Owner's Original Investment
Which formula represents a buyer's view of a sales transaction? - Answer: perceived value -
selling price = personal profit
What is value based pricing? - Answer: A pricing system based upon a buyer's view of product
or service value
Page 1 of 14
, What is true for franchised hotel operations in the United States? - Answer: Their prices are
established by the hotel owners
4 I's of service - Answer: intangibility, inconsistency, inseparability, inventory
What is the relationship between differential pricing and consumer surplus? - Answer:
Differential pricing is a strategy used to minimize consumer surplus
What is the most common guest complaints about hotel guest rooms? - Answer: Service
deficiencies
What is the most likely result of a revenue manager's decision to reduce rack room rates during
periods of reduced demand? - Answer: Competitors rates will also be reduced
In a limited service hotel, what is the incremental expense incurred in selling one guest room? -
Answer: CPOR
Which group of employees is most responsible for implementing the revenue optimization
strategies and tactics developed by a revenue management team? - Answer: Line-level
employees
T/F: Discounts are viewed less favorably than surcharges - Answer: false
When is a guest considered an over-stay? - Answer: When the guest checks out of the hotel
after his or her original check out date
What is the result of raising room rates during high demand? - Answer: RevPAR will increase
Rooms manager - Answer: responsible for the housekeeping and front office areas
Page 2 of 14
Definitive Solutions.
ADR formula - Answer: Total Rooms Revenue / Total Rooms Sold
Value proposition - Answer: 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
Owners’ ROI formula - Answer: Owners Investment Return/ Owner's Original Investment
Which formula represents a buyer's view of a sales transaction? - Answer: perceived value -
selling price = personal profit
What is value based pricing? - Answer: A pricing system based upon a buyer's view of product
or service value
Page 1 of 14
, What is true for franchised hotel operations in the United States? - Answer: Their prices are
established by the hotel owners
4 I's of service - Answer: intangibility, inconsistency, inseparability, inventory
What is the relationship between differential pricing and consumer surplus? - Answer:
Differential pricing is a strategy used to minimize consumer surplus
What is the most common guest complaints about hotel guest rooms? - Answer: Service
deficiencies
What is the most likely result of a revenue manager's decision to reduce rack room rates during
periods of reduced demand? - Answer: Competitors rates will also be reduced
In a limited service hotel, what is the incremental expense incurred in selling one guest room? -
Answer: CPOR
Which group of employees is most responsible for implementing the revenue optimization
strategies and tactics developed by a revenue management team? - Answer: Line-level
employees
T/F: Discounts are viewed less favorably than surcharges - Answer: false
When is a guest considered an over-stay? - Answer: When the guest checks out of the hotel
after his or her original check out date
What is the result of raising room rates during high demand? - Answer: RevPAR will increase
Rooms manager - Answer: responsible for the housekeeping and front office areas
Page 2 of 14
