Hospitality Revenue Management
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 rev...
Hospitality Revenue Management
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- Market segmentation, Duration control , BAR
(Best Available Rate)
Legoherel, Poutier, & Fyall point out that revenue optimization is not only about product
versioning, distribution channel selection, and pricing, but also - Answer- careful selection of
the most profitable customers
The net value achieved by a seller and a buyer in a business transaction - Answer- Profit
A Barter System is a - Answer- Trading system in which goods and services are exchanged
without the use of money.
The area of study concerned with the production, consumption, and transfer of wealth is called -
Answer- Economics
The purpose of successful hospitality businesses is to - Answer- Provide profits to its
customers and increase their wealth.
The individual or team responsible for ensuring that a company's prices match a customer's
willingness to pay. - Answer- Revenue Manager(s)
A revenue management philosophy that places customer gain ahead of short term revenue
maximization in revenue management decision making is called - Answer- Customer-Centric
Revenue Management
A source of business customers or vehicle used to communicate with a source of customers is
called a - Answer- Channel/Distribution Channel
Constrained Supply is the condition that exists when - Answer- Sellers cannot readily increase
the amount of products or services available for sale when consumer demand for them
increases
What is the difference between a Hard Constraint and a Soft Constraint? - Answer- Hard
Constraint: a supply constraint that cannot be removed, regardless of product demand. Ex: hotel
rooms, capacity of natural gas pipelines
Soft Constraint: a supply constraint that can, with sufficient lead time, and/or reasonable
expense, be removed or lessened. Ex:
A demand based revenue management strategy, first initiated by commercial airline companies.
It seeks to maximize income via manipulation of selling prices. - Answer- Yield Management
,Accepting reservations for more rooms than a hotel has available or in inventory is known as -
Answer- Overbooking/Overselling
A group of similar and directly competing lodging properties to which an individual hotel's
operating performance is compared is called - Answer- Competitive Set
A Market Segment is - Answer- A subset of a customer group that can be readily identified by
one or more common, but individual customer characteristics. Ex: Income, gender, or purpose
of travel.
A summary report describing the amount of future demand for a lodging property's rooms or
services and the rate at which that business is bung captured is called a - Answer- Pace
Report
Rack Room Rates are - Answer- The price of rooms when no discounts of any type are offered
to guests purchasing the rooms
The advertising and promotion of travel and tourism activities in a specifically designated
geographic area is called - Answer- Destination Marketing
A Target Market consists of - Answer- Potential customers to whom a business' marketing
activities and message are directed.
Price is a measure of - Answer- The value given up (exchanged) by a buyer and a seller in a
business transaction.
In the consumer's mind, value for the product is equivalent to - Answer- perceived benefit
minus the price
The minimal sales point is equivalent to - Answer- the dollar sales volume at the break even
point (revenue - cost = 0)
If the quality of the product increases and price decreases, value for the customer - Answer-
increases
If the service increases and price decreases, value for the customer - Answer- increases
Match the product sold with the pricing terminology
Guest rooms
Meeting rooms
Special guest services
Games of chance
Transportation
, Admission - Answer- Room rate
Room rental
Service charge
Minimum bet
Fare
Ticket price
The shoulder period refers to - Answer- the period of lowest demand
The term for the price that consumers perceive to be the "normal" price is: - Answer-
Reference price
If the service increases and price decreases, value for the customer - Answer- increases
Which of the following has a higher Net ADR Yield?
Standard ADR = 200; Distribution Cost = 20
Standard ADR = 210; Distribution Cost = 30 - Answer- Standard ADR of 200 and cost of 20
H&M Ch 4 p 114 Net ADR Yield = Net room rate / standard ADR where Net Room Rate =
Standard ADR - distribution costs
What is the net ADR yield (not the net room rate) given the following information:
Net room rate/standard ADR = Net ADR Yield where Net Room Rate = ADR less distribution
channel costs
In a 400 room hotel, which is the better pricing pricing strategy (using RevPAR only) given the
following information
180 unsold rooms Standard rate $179 (current ADR) $35 room cost (prep, sell and clean) -
Answer- Sell all remaining rooms to a group contract @ $109
In a 400 room hotel, which is the better pricing pricing strategy (using GOPPAR only) given the
following information
180 unsold rooms Standard rate $179 (current ADR) $35 room cost (prep, sell and clean) -
Answer- Sell all remaining rooms to a group contract @ $109
The term used for a product offering that consists of multiple products and/or services that are
grouped together and offered at a price that is lower than if the items were to be purchased
separately. - Answer- bundling
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