HOSPITALITY REVENUE MANAGEMENT FINAL
EXAM REVIEW QUESTIONS AND ANSWERS
2025
What is the industry term used to describe the sum of prices paid by a business's
customers? - CORRECT ANSWER -total revenues
Historically, what concept have hospitality managers chiefly used to calculate their
selling prices? - CORRECT ANSWER -costs
What is an algebraic equivalent of the formula: Sales = Costs + Profit? - CORRECT
ANSWER -profit=sales-costs
What is the name for the net value achieved by both parties in a business transaction? -
CORRECT ANSWER -profit
What element is not present in a barter economy? - CORRECT ANSWER -money
What is the formula used to calculate an owner's ROI? - CORRECT ANSWER -Owner's
Investment Return / Owner's Original Investment = Owner's Return on Investment
Sandy has 100 hotel rooms to sell. This Saturday night has enough customers to sell
125 rooms so she will be refusing 25 requests for rooms. What is this an example of? -
CORRECT ANSWER -constrained supply
Which industry was the first to use Yield Management principles? - CORRECT
ANSWER -airline
What is the industry term used to describe the selling of rooms which are not actually
available for sale? - CORRECT ANSWER -overbooking
What is the formula used to calculate Average Daily Rate? - CORRECT ANSWER -
Total Room's Revenue / Total Rooms Sold = Average Daily Rate
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's occupancy % last night? - CORRECT ANSWER -70%
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's RevPAR last night? - CORRECT ANSWER -$140
,What is the industry term for the average revenue generated by each occupied
guestroom during a defined period of time? - CORRECT ANSWER -RevPOR
What is the formula used to calculate GOPPAR? - CORRECT ANSWER -(Total
Revenue - Management Controllable Expenses) / Rooms Available to Sell = GOPPAR
What is the industry term for a customer group which can be readily identified by one or
more common characteristics? - CORRECT ANSWER -market segment
What is a rack rate? - CORRECT ANSWER -The price of rooms when no discounts of
any type are offered
What is:
Total period revenue
(Number of available seats) x (hours of seat availability) - CORRECT ANSWER -
RevPASH formula
What is the term used to identify a management philosophy that places customer gain
ahead of short-term revenue maximization in revenue management decision making? -
CORRECT ANSWER -Customer-centric revenue management
What is the term used to describe the potential customers to whom a business's
marketing activities and messages are directed? - CORRECT ANSWER -target market
What is the term used to describe efforts undertaken to encourage travel and tourism to
a specific geographic area or attraction? - CORRECT ANSWER -destination marketing
What is the name for the value given up by a buyer and a seller in a business
transaction? - CORRECT ANSWER -price
Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an
example of what type of pricing? - CORRECT ANSWER -two-tiered pricing
What is the fundamental assumption upon which the concept of consumer rationality is
based? - CORRECT ANSWER -Buyers act in ways that are of personal benefit to them
What is the revenue management term used to describe the perceived benefit gained,
minus the price paid, in a business transaction? - CORRECT ANSWER -value
, What is created 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? - CORRECT ANSWER -value
proposition
Which of the following terms would be included in the Place portion of a hotel's
marketing mix? - CORRECT ANSWER -distribution channels
What is the fundamental assumption upon which the Law of Supply is based? -
CORRECT ANSWER -The higher the demand for a product the more of it will be
produced by sellers
According to Alfred Marshall's work, if the price of a product is lower than the natural, or
equilibrium price, what will happen? - CORRECT ANSWER -The demand for the
product would exceed its supply
Assume an equilibrium price (P1) is in place for a product. What would the law of supply
and demand predict as an outcome if demand for that product increased? - CORRECT
ANSWER -The new price (P2) would be higher than the previous price (P1) and supply
would increase
What concept is displayed by the intersecting point on a supply and demand curve? -
CORRECT ANSWER -An estimate of the amount of a product that would be purchased
at a known price and point in time
What must be true if a product producer is to continue creating and selling products? -
CORRECT ANSWER -Revenues must exceed costs
What is the specialized branch of accounting that focuses on recording and analyzing
the expenses incurred by an organization? - CORRECT ANSWER -cost accounting
What is the industry term for the point at which an organization's revenues exactly equal
its costs? - CORRECT ANSWER -break-even point
Which of the following foodservice costs is a variable cost? - CORRECT ANSWER -
food
Which of the following lodging costs is a fixed cost? - CORRECT ANSWER -mortgage
payments
EXAM REVIEW QUESTIONS AND ANSWERS
2025
What is the industry term used to describe the sum of prices paid by a business's
customers? - CORRECT ANSWER -total revenues
Historically, what concept have hospitality managers chiefly used to calculate their
selling prices? - CORRECT ANSWER -costs
What is an algebraic equivalent of the formula: Sales = Costs + Profit? - CORRECT
ANSWER -profit=sales-costs
What is the name for the net value achieved by both parties in a business transaction? -
CORRECT ANSWER -profit
What element is not present in a barter economy? - CORRECT ANSWER -money
What is the formula used to calculate an owner's ROI? - CORRECT ANSWER -Owner's
Investment Return / Owner's Original Investment = Owner's Return on Investment
Sandy has 100 hotel rooms to sell. This Saturday night has enough customers to sell
125 rooms so she will be refusing 25 requests for rooms. What is this an example of? -
CORRECT ANSWER -constrained supply
Which industry was the first to use Yield Management principles? - CORRECT
ANSWER -airline
What is the industry term used to describe the selling of rooms which are not actually
available for sale? - CORRECT ANSWER -overbooking
What is the formula used to calculate Average Daily Rate? - CORRECT ANSWER -
Total Room's Revenue / Total Rooms Sold = Average Daily Rate
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's occupancy % last night? - CORRECT ANSWER -70%
Tashia's hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250
rooms. What was Tashia's RevPAR last night? - CORRECT ANSWER -$140
,What is the industry term for the average revenue generated by each occupied
guestroom during a defined period of time? - CORRECT ANSWER -RevPOR
What is the formula used to calculate GOPPAR? - CORRECT ANSWER -(Total
Revenue - Management Controllable Expenses) / Rooms Available to Sell = GOPPAR
What is the industry term for a customer group which can be readily identified by one or
more common characteristics? - CORRECT ANSWER -market segment
What is a rack rate? - CORRECT ANSWER -The price of rooms when no discounts of
any type are offered
What is:
Total period revenue
(Number of available seats) x (hours of seat availability) - CORRECT ANSWER -
RevPASH formula
What is the term used to identify a management philosophy that places customer gain
ahead of short-term revenue maximization in revenue management decision making? -
CORRECT ANSWER -Customer-centric revenue management
What is the term used to describe the potential customers to whom a business's
marketing activities and messages are directed? - CORRECT ANSWER -target market
What is the term used to describe efforts undertaken to encourage travel and tourism to
a specific geographic area or attraction? - CORRECT ANSWER -destination marketing
What is the name for the value given up by a buyer and a seller in a business
transaction? - CORRECT ANSWER -price
Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an
example of what type of pricing? - CORRECT ANSWER -two-tiered pricing
What is the fundamental assumption upon which the concept of consumer rationality is
based? - CORRECT ANSWER -Buyers act in ways that are of personal benefit to them
What is the revenue management term used to describe the perceived benefit gained,
minus the price paid, in a business transaction? - CORRECT ANSWER -value
, What is created 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? - CORRECT ANSWER -value
proposition
Which of the following terms would be included in the Place portion of a hotel's
marketing mix? - CORRECT ANSWER -distribution channels
What is the fundamental assumption upon which the Law of Supply is based? -
CORRECT ANSWER -The higher the demand for a product the more of it will be
produced by sellers
According to Alfred Marshall's work, if the price of a product is lower than the natural, or
equilibrium price, what will happen? - CORRECT ANSWER -The demand for the
product would exceed its supply
Assume an equilibrium price (P1) is in place for a product. What would the law of supply
and demand predict as an outcome if demand for that product increased? - CORRECT
ANSWER -The new price (P2) would be higher than the previous price (P1) and supply
would increase
What concept is displayed by the intersecting point on a supply and demand curve? -
CORRECT ANSWER -An estimate of the amount of a product that would be purchased
at a known price and point in time
What must be true if a product producer is to continue creating and selling products? -
CORRECT ANSWER -Revenues must exceed costs
What is the specialized branch of accounting that focuses on recording and analyzing
the expenses incurred by an organization? - CORRECT ANSWER -cost accounting
What is the industry term for the point at which an organization's revenues exactly equal
its costs? - CORRECT ANSWER -break-even point
Which of the following foodservice costs is a variable cost? - CORRECT ANSWER -
food
Which of the following lodging costs is a fixed cost? - CORRECT ANSWER -mortgage
payments
