Hospitality Revenue Management final exam review 2023/2024 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 1 / 3
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 2 / 3
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 In a hospitality industry break-even analysis graph the Total Revenues line starts at 0.Why does the Total Costs line always start farther up the y axis? - Correct Answer Because fixed costs are incurred even if no guests are served or rooms are sold Which of the following statements about unit costs in the hospitality industry is true? - Correct Answer Unit costs will vary based upon how high or low an item is priced Which of the following statements about the relationship between costs and pricing is true? - Correct Answer An appropriate selling price for a product or service must dictate its allowable costs If a Revenue Manager implements an organization's strategic pricing plan what personal characteristic of that Revenue Manager will be most important for ensuring the plan's success? - Correct Answer an understanding of an organization's customers Which formula represents a buyer's view of a sales transaction? - Correct Answer Perceived Value - Selling Price = Personal Profit What type of benefit is lacking in material qualities and is not able to be touched or seen but nonetheless can still be perceived? - Correct Answer intangible What will be the typical case in an auction when the initial price bid for the item being sold is very low? - Correct Answer the number of potential bidders will be high
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