Hotel Revenue Management Chapters 1-6 Question With Answers

HOTEL REVENUE MANAGEMENT CHAPTERS 1-6
QUESTION WITH ANSWERS

Revenue management, sometimes called yield management, is a set of revenue maximi
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zation strategies and tactics that: - anscan be used to increase profitability
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When the American Airlines CEO developed yield management, what type of information
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was crucial to its success? - ansForecasting
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Which of the following statements about hotel revenue management is FALSE? -
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ansRevenue mgt. is new, as are all the strategies that are employed to maximize profit
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Which of the following is NOT a criterion needed for an industry to unlock the full potential
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of revenue management? - ansLow fixed cost and high variable cost
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Total revenue management refers to: -
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ansManaging several revenue streams at the same time
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T/
F: Revenue management in the hotel industry has no relationship to the airline industry's
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yield management initiatives of the mid-1980s. - ansFalse
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T/
F: Product perishability, seasonality of demand, and cost structure are characteristics of t
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he business model for other industries that were the first to embrace revenue manageme
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nt. - ansTrue nm nm




In the hotel industry, the term revenue management was initially the preferred term for thi
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s process in __________? - ansNorth America
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__________ is the term that refers to the capability of various hotel managers to quickly a
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nalyze ever larger amounts of complex information through the use of ever more sophisti
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cated technology. - ansBig data nm nm nm nm




In the last 45 years in North America, a new class of owners and investors, who had no lo
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dging operational experience, have chosen a(n) __________ to watch over the manager
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s of the hotels that they owned to insure that both revenue and profit potentials were maxi
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mized. - ansAsset manager nm nm nm




Businesses that benefit the most from revenue management: - ansAll of the above
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, In the short-
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term, hotels have a finite number of hotel rooms to sell and can't sell more than their total
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capacity even when the demand is there. This is know as a(n) ____________________
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Environment. - ansFixed-capacity nm nm




The sale of a hotel room is a time-
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sensitive product. Unsold rooms can't be sold once the day is past. Therefore, a hotel roo
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m night is known as a _________ product. - ansPerishable
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__________ refers to a variation of demand based on the season of the year. - nm nm nm nm nm nm nm nm nm nm nm nm nm nm




ansSeasonality
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If a cost is not directly related to sales volume, it can be classified as a __________ cost.
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- ansFixed
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Most of the maintenance costs in a hotel are considered _________ costs, as they do not
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directly depend on sales and occupancy performance. - ansFixed
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It takes a significant initial investment to secure a piece of land, build a hotel on it, and fur
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nish it with all the necessary furniture, fixtures , and equipment (FF&E). This cost structur
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e reflects the fact that the hotel industry is __________. - ansCapital-investment
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Hotel properties are not just capital assets, but are also ______________________ busi
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nesses. - ansIncome-generating nm nm




The variable cost of a room night is the dollar amount it would cost on average to make u
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p one room and get it ready for new occupancy. The basics that are provided to each new
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arriving guest can cost the hotel __________ per day. - ans$10-$40
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END CHP: 1 nm nm nm




The only way to achieve the sustainable financial success of a hotel property is to ______
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______________. - ansMaximize top-line revenue nm nm nm nm




To interpret measures of a hotel's performance, managers often compare those measure
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s with: - ansAll of the above
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ll If a 300-
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room hotel achieves a 70 percent occupancy rate for April at an ADR of $153 per room, w
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hat will the total room revenue equal for the month of April? - ans.70 x 300 room = 210
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April has 30 days -> 210 x 30 days = 6,300
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ADR = $153 x 6300 = $963, 900
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In January, the 200-
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room Snow Bound Inn ran a special for skiers that resulted in them selling 5,735 rooms d
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