Revenue Management Midterm Exam Questions with Complete Solutions

Pace of build refers to: a) How quickly new hotel rooms and new hotels are being added to a comp set's total supply b)The rate at which reservations are being made for a future date c)How quickly the demand for substitute products is reducing demand for hotel rooms d)The speed with which currency exchange rates are rising in a given market - ANSWER-b: The rate at which reservations are being made for a future date Denial reports from reservations show us how much more business we could captured if we had additional capacity or inventory. Since there was more demand than supply, we need to asses whether our rates were too low for that time period. A denial occurs when: a)Business that had considered an organization's products or services, but in the end decided to purchase from another organization b)Certain "rules" or "criteria" that are put in place to govern the conditions and availability of a rate are not available c) A facility is not able to accommodate a guest due to unavailability of product or service at that price d) A facility has the product of service available, but the customer chooses not to buy based upon the price or some other factor - ANSWER-c: A facility is not able to accommodate a guest due to unavailability of product or service at that price In a property forecasted high period of demand period, if the RM displacement analysis shows that by accepting a certain group the overall net revenue gain is positive (more revenues than the costs of displacement transient demand in the future), increasing profitability, than its Sales or Reservations departments should be inclined to: a) All of the above apply b) Decline the group reservation c) Regret the group reservation d) Accept the group reservation - ANSWER-d: Accept the group reservation Personal income minus income taxes equals which of the following? a) net income b) disposable income c) discretionary income d) leisure income - ANSWER-b: disposable income