Revenue Management Exam 1/ 70 Terms with
Certified Solutions.
Room Night - Answer: The single night's use of a guest room
EX: 1 room sold for 3 consecutive nights yields three room nights
reference price - Answer: the price perceived by consumers to be the normal price for a product
of service
Hard constraint - Answer: a supply constraint that cannot be removed regardless of product
demand
EX: natural gas pipelines, number of hotel rooms
What does the law of supply and demand predict when demand or supply shift? - Answer: -
Demand Increase: price increases, quantity increases.
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, -Demand Decrease: price decreases, quantity decreases.
-Supply Increase: price decreases, quantity increases.
-Supply Decrease: price increases, quantity decreases.
What is price fairness? - Answer: A consumer's assessment and associated emotions of whether
the difference (or lack of difference) between a seller's price and the price of a comparative
other party is reasonable, acceptable, or justifiable
What are some factors that can help us predict whether or not a buyer will perceive a price as
fair or not fair? - Answer: Price expectation
reference price
familiarity
perceptions
Assume the ADR of the competitive set increased significantly (e.g., more than 7 percent)
last month. What would be your assessment of the Branchwater's revenue management
performance compared to its comp set? - Answer: They are winning the battle with other
lodging company's because they are selling more rooms
Assume the ADR of the competitive set decreased very significantly last month (e.g., more
than 10 percent). What would be your assessment of the Branchwater's revenue management
performance compared to its comp set? - Answer: That they are losing the battle with other
lodging company's because they are not selling a lot of rooms
What is an economic impact analysis? Be able to describe why they are done, and what they
show - Answer: -a net increase in the wealth of residents resulting from tourism, measured in
monetary terms, over and above the levels that would prevail in its absence
-shown through direct, indirect and induced effects
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Certified Solutions.
Room Night - Answer: The single night's use of a guest room
EX: 1 room sold for 3 consecutive nights yields three room nights
reference price - Answer: the price perceived by consumers to be the normal price for a product
of service
Hard constraint - Answer: a supply constraint that cannot be removed regardless of product
demand
EX: natural gas pipelines, number of hotel rooms
What does the law of supply and demand predict when demand or supply shift? - Answer: -
Demand Increase: price increases, quantity increases.
Page 1 of 12
, -Demand Decrease: price decreases, quantity decreases.
-Supply Increase: price decreases, quantity increases.
-Supply Decrease: price increases, quantity decreases.
What is price fairness? - Answer: A consumer's assessment and associated emotions of whether
the difference (or lack of difference) between a seller's price and the price of a comparative
other party is reasonable, acceptable, or justifiable
What are some factors that can help us predict whether or not a buyer will perceive a price as
fair or not fair? - Answer: Price expectation
reference price
familiarity
perceptions
Assume the ADR of the competitive set increased significantly (e.g., more than 7 percent)
last month. What would be your assessment of the Branchwater's revenue management
performance compared to its comp set? - Answer: They are winning the battle with other
lodging company's because they are selling more rooms
Assume the ADR of the competitive set decreased very significantly last month (e.g., more
than 10 percent). What would be your assessment of the Branchwater's revenue management
performance compared to its comp set? - Answer: That they are losing the battle with other
lodging company's because they are not selling a lot of rooms
What is an economic impact analysis? Be able to describe why they are done, and what they
show - Answer: -a net increase in the wealth of residents resulting from tourism, measured in
monetary terms, over and above the levels that would prevail in its absence
-shown through direct, indirect and induced effects
Page 2 of 12
