Revenue Management Exam Bundle Questions 100% Correct Answers

What is the industry term used to describe the sum of prices paid by a business's customers? - ANSWER-Total Revenues Historically, what concept have hospitality managers chiefly used to calculate their selling prices? - ANSWER-Costs What is an algebraic equivalent of the formula: Sales = Cost...

Revenue Management - ANSWER-Also Known as Yield Management An essential instrument for matching supply and demand by dividing customers into different segments based on their purchase intentions and allocating capacity to different segments in a way that maximizes a particular's facility's reve...

Revenue - ANSWER-The amount of sales achieved in a specific time period. Calculated as Numbers of Units sold X unit price Profit - ANSWER-The net value achieved by a seller and a buyer in a business transaction Barter System - ANSWER-A trading system in which goods and services are exchanged w...

Successful revenue management requires execution at - ANSWER-The strategic, tactical, and booking control levels Revenue management deals with - ANSWER-The strategy and tactics to manage the allocation of capacity to different fare classes over time to maximize revenue At the strategic level, ...

Revenue Management - ANSWER-selling to the right guests at the right time at the right price to make the most profit Two characteristics of hospitality product - ANSWER-perishability & intangibility How are revenue managers incentivized financially? How might this influence their decisions? - ...

revenue manager - ANSWER-individual at a hotel property responsible for optimizing rooms RevPAR inventory - ANSWER-all guest rooms available to be sold negotiated rates - ANSWER-special room rate offered for a fixed period of time to a specific hotel client blackout dates - ANSWER-any day a...

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...

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? - ANSWER-customer-centric revenue management What is the term used to describe the potential customers to whom a business's marketin...

The hurdle rate is - ANSWER-the lowest rate for a given day Revenue Management can be defined as - ANSWER-A set of strategies and techniques used to sell the right product, to the right customer, at the right time and at the right prices What is the main reason that travelers today have more c...

What are the two components of revenue management? - ANSWER-Supply: the amount of a good or service that a seller is willing and able to sell for an given price at any time. Demand: the amount of a good or service that a purchase is willing and able to buy for any given price at any given time ...

Define Revenue Management according to phillips (2005). - ANSWER-Revenue management refers to the strategy and tactics used by a number of industries to manage the allocation of their capacity to different fare classes over time in order to maximize revenue. Define Revenue management according to...

Revenue management is the act of directing sources of income within the confines of - ANSWER-capacity, supply and demand GOPPAR takes into account which of the following variables that is not considered in RevPAR? - ANSWER-Controllable expenses Name revenue optimization strategies - ANSWER-Mar...

What is the industry term used to describe the sum of prices paid by a business's customers? - ANSWER-Total Revenue Historically, what concept have hospitality managers chiefly used to calculate their selling prices? - ANSWER-Costs What is an algebraic equivalent of the formula: sales= Costs+...

What is revenue management? - ANSWER-The application of information systems and pricing strategies to allocate the right capacity to the right customer at the right place at the right time What are the important components of revenue management? - ANSWER-Relatively fixed capacity, predictable dem...

revenue management strategies and tactics - ANSWER--increase revenues and profitability -increase market share -serve more guests hurdle rate - ANSWER-lowest rate for a given day smoothing demand - ANSWER-benefit of variable pricing within rev management revenue management - ANSWER-a set ...

revenue - ANSWER-may be defined as "an item or source of income" management - ANSWER-may be defined as "skillful managing; careful, tactful treatment capacity - ANSWER-which is defined as "the amount of space that can be filled." Also, in relation to capacity, you must start thinking abou...

What is the main reason that travelers today have more clout than ever before? - ANSWER-They have information on virtually everything at their fingertips. Revenue Management is NOT necessarily about... - ANSWER-Achieving 100 % occupancy and a perfect science The Hurdle Rate is...? - ANSWER-The...

All sellers face capacity or supply constraints. Hard constraints are - ANSWER-Constraints that cannot be violated at any price in the short term Soft constraints are - ANSWER-Constraints that can be violated at some price When supply is constrained, the seller can - ANSWER-Do nothing, raise t...

revenue management is applicable under the following conditions (3) - ANSWER-1. seller is selling a fixed stock of perishable capacity 2. customers book capacity prior to departure 3. seller manages a set of fare classes (room nights), each of with has a fixed price (in short run) 3 levels of r...

Bench Rate - ANSWER-the base room rate that a hotel wants to achieve and sell to the public Booking Pace - ANSWER-the current rate at which reservations are being received for a specific DOA. The booking pace is compared to historical averages to determine if demand is stronger or weaker than his...

revenue management principle - ANSWER-selling the right product at the right moment for the right price to the right client 3 major forecasts the Loews Chicago utilizes - ANSWER-budge, rolling forecast, 14 day forecast Index - ANSWER-the measurement of a hotel's performance relative to an agg...

Revenue - ANSWER-total amount of sales achieved in a specified time period Revenue Formula - ANSWER-? = Number of units sold x Unit price Hospitality Business - ANSWER-an organization providing food, beverages, lodging, travel, or entertainment services to people away from their homes Accou...

Over the last several years, the industry has recognized that revenue management can no longer be a tactical approach to room and pricing management only. - ANSWER-True A variable cost is the cost associated with an occupied room regardless of the total number of rooms occupied. - ANSWER-False ...

What are the three main approaches to pricing? - ANSWER-cost-based pricing, value-based pricing, competition-based pricing Sets prices relative to financial costs, pricing implications of cost analysis, may result in reducing value generated for customers. - ANSWER-Cost-based pricing Relative ...

Which is a health information exchange network for securely sharing clinical information over the Internet nationwide, and it spans all 50 states and is the largest health information exchange infrastructure in the United States? - ANSWER-eHealth Exchange When must all diagnoses, procedures, and ...

Give an example of how Revue Management would work in a Hotel - ANSWER-In hotels, Revenue Management is used to examine: 1. Occupancy - How many room nights are sold 2. Discounting - At what rate (are they discounted or not) 3. Sales mix - What else is sold (Parking, seats in the restaurant, sp...

Revenue management, sometimes called yield management, is a set of revenue maximization strategies and tactics that: - ANSWER-can be used to increase profitability When the American Airlines CEO developed yield management, what type of information was crucial to its success? - ANSWER-Forecasting ...

The 350-room St. Julien Hotel, in Boulder, Colorado, hosts the annual Ski Fest during the second week of January. The three-day-weekend event attracts an abundance of guests who will stay all weekend. If it booked Saturday-only rooms, it will lose revenue when those rooms go unused on Friday or Sund...

Main rm industry characteristics - ANSWER-Fixed capacity; High fixed cost and low marginal sales; High demand fluctuations; Sell products in advance; Perishable inventory; Multiple and clear market segments; Main RM problems - ANSWER-Multiple-night stay; Multiplier effect; Booking lead tim...

Reality - ANSWER-Premises of the concept of price has an objective and a subjective sense. Time - ANSWER-price has an initial sense and a final sense. Time - ANSWER-The final price to be paid can be identical to the price initially offered (e.g., a fixed offer), but an initial price offer can ...

Revenue - ANSWER-The total number of sales achieved in a specific time period. Calculated as: # of units x unit price= Revenue Accountants Profit Formula - ANSWER-Sales= Cost + Profit (Profit= Revenue- Expenses) Profit - ANSWER-The net value achieved by a seller and a buyer in a business tr...

What is the industry term used to describe the sum of prices paid by a business's customers - ANSWER-Total Revenues Historically, what concept have hospitality managers chiefly used to calculate their selling prices? - ANSWER-Costs What is an algebraic equivalent of the formula: Sales = Costs...

Revenue Management is a set of revenue maximization strategies and tactics that: - ANSWER-Can be used to improve the profitability of certain businesses. When the American Airlines CEO developed yield management, what type of information was crucial to its success? - ANSWER-Forecasting Which o...

3 reasons why forecasting demand is important - ANSWER-- scheduling workers -purchasing supplies -managing cash flow What type of data describes events that have already occurred? - ANSWER-Historical Data What type of data describes events that are occurring now or in the very near future? -...

Price - ANSWER-The value placed by a firm on its products or services and the value exchanged by a buyer and a seller in a transaction The amount of money charged for it

Why Service Pricing Strategy is Different and More Difficult - ANSWER--harder to calculate financial costs of creating service process or performance than manufactured good -variability in inputs and outputs (hard to define "unit") -importance of time factor -customers find service prici...

The number of potential buyers with the interest and ability to purchase the products sold by a business at the specific price offered. - ANSWER-Demand (Customers) Accurate forecasts are important for: - ANSWER-scheduling workers purchasing supplies managing cash flow Events that have alread...

Affiliates - ANSWER-revenues generated by sources other than group rooms and banquets such as exhibitors and associated vendors Bench Rate - ANSWER-the base room rate that a hotel wants to achieve or sell Best Available Rate - ANSWER-a floating transient room rate based on demand and current m...

Revenue management at the strategic level - ANSWER-focuses on long-term goals such as identifying desired target markets and identifying or creating factors that differentiate one hotel from its competitors Tactical revenue management - ANSWER-focuses on operations -have relatively short time h...

What is the industry term used to describe the sum of prices paid by a business's customers? - ANSWER-Total revenues Historically, what concept have hospitality managers chiefly used to calculate their selling prices? - ANSWER-Costs What is an algebraic equivalent of the formula: Sales = Cost...

ADR - ANSWER-total room revenue/total rooms sold Occupancy % - ANSWER-total rooms sold/total rooms available for sale RevPAR - ANSWER-ADR x Occupancy % or total revenue/total rooms available for sale RevPOR - ANSWER-total revenue/total occupied rooms GOPPAR - ANSWER-(total rev - mgmt c...

For a hotel, the ____________ is the room price available to the general public with no restrictions or limitations. a. CONUS rate b. Negotiated rate c. Floor rate d. BAR rate e. Premium rate - ANSWER-d. BAR Rate (best available rate or retail rate) Because of the cyclical demand characteristic ...

Profit - ANSWER-the net value achieved by a seller and a buyer in a business transaction barter system - ANSWER-a trading system in which goods and services are exchanged without the use of money money - ANSWER-an acceptable medium of exchange used as the measure of the value of goods and serv...

True or False: Rooms are extremely profitable. - ANSWER-True Any serious exploration of hotel room rates and their management must include what basic information? - ANSWER-Room rate economics: supply and demand True or False: Room rate economics recognizes when supply is held constant, a decre...

Statistic - ANSWER-A number or term used to summarize or to describe a larger collection of information. Examples include sums, averages, and ratios. Income statement - ANSWER-A detailed listing of an operation's revenue and expenses for a specific time period. Also know as the statement of inco...

A benefit of variable pricing within revenue management is the smoothing of demand. A) True B) False - ANSWER-A) True Revenue management is a set of revenue maximization strategies and tactics that: A) Increase profitability by carefully controlling expenses. B) Focus exclusively on rat...

Revenue - ANSWER-The total amount of sales achieved in a specified time period. Revenue is calculated as: - ANSWER-Number of units sold x Unit Price What do effective managers of an organizations revenues must do these three things... - ANSWER--Understand the importance of revenue management ...

Profit - ANSWER-total sales - total expenses Profit margin - ANSWER-profit/sales Costs of Goods Sold - ANSWER-costs/sales ADR - ANSWER-average daily rate ADR Formula - ANSWER-room revenue/rooms sold Occupancy rate - ANSWER-rooms sold/rooms available breakeven - ANSWER-fixed costs/ ...

Revenue - ANSWER-The total amount of sales achieved in a specific time period Revenue is calculated as - ANSWER-# of units sold * unit price = revenue Effective managers of an organization's revenues must do three things - ANSWER-1.) Understand the importance of revenue management 2.) Unders...

Warren Buffet - ANSWER-Risk comes from not knowing what you are doing Robert G. Cross - ANSWER-the Chairman and CEO of Revenue Analytics (guru) The value of Revenue Management - ANSWER-is that it can add approximately 2 - 8% in gross revenue to a hospitality enterprise Revenue Management ca...

hotel revenue management - ANSWER-Selling the right product. Correct brand, room type, and/or meeting space. To the right customer. Transient or Group/Business or Pleasure. At the right time. The booking window of how far out guests book. For the right price. Properly position rates for eac...

According to the Article, Revenue Management: An Overview of the Past, Present, & Future, - ANSWER-Senior leadership within hospitality operations and organization will have held a revenue management related role at some point in their careers. According to the Article, Revenue Management: An Ove...

Room night - ANSWER-The single night's use of a guest room. For example, one room sold for three consecutive nights yields three room nights. RMs are forced to implement one of three income-management alternatives when demand for their products is high - ANSWER-1.Establish one fixed price, then...

Revenue Manager - ANSWER-the title used to identify the individual at a hotel property who is responsible for optimizing rooms, revenue through effective guest room pricing and inventory management Inventory - ANSWER-all of the guest rooms available to be sold by a hotel Revenue Management - A...

ADR - ANSWER-rooms revenue divided by rooms sold chain scales - ANSWER-hotels are categorized based on their ADRs luxury upper upscale upscale upper midscale midscale economy independents company types - ANSWER-management, franchise, asset, membership, referral architect, developer, Rea...

Profit - ANSWER-Total Sales - Total Expenses Profit Margin - ANSWER-Profit / Sales Cost of Goods Sold - ANSWER-COGS / Sales Covers per Hour - ANSWER-Total Covers / Number of Operating Hours Covers per Day - ANSWER-Total Covers / Number of Days in Operation Covers per Server - ANSWER-T...

pricing and revenue optimization is - ANSWER-concerned with determining the prices that will be in place tomorrow strategic pricing is - ANSWER-used to establish a general position within a market the problem of pricing did not exist until the - ANSWER-17th and 18th century the greatest ins...

achievement factor or rate potential percentage - ANSWER-The percentage of the rack rate that a hotel actually receives; in hotels not using revenue management software, this factor is generally approximated by dividing the actual average room rate by the potential average rate. Booking lead time...

4.1. Price differentiation refers to a. The ways in which customers differentiate between the prices of different products b. The ways that additional profit can be extracted from a market place by charging different prices for different products c. The ways that additional profit can be extracte...

Goal of P&RM - ANSWER-Find the processes and capabilities needed to ensure that business have the right prices in place: for all their products, to all their customers, through all their channels, all the time. and update prices over time in response to changing market conditions Strategi...

Offsite catered event: - ANSWER-An occasion in which a foodservice operation provides food and beverage products, as well as any labor required to serve the products, at a location separate from its primary place of business. Banquet room: - ANSWER-A uniquely designated space available for privat...