Download HOSPITALITY REVENUE MANAGEMENT QUIZ and more Exams Hospitality and Tourism in PDF only on Docsity!
HOSPITALITY REVENUE MANAGEMENT QUIZ QUESTIONS & ANSWERS 1
"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 - CORRECT ANSWER d"
"Personal income minus income taxes equals which of the following? a) net income b) disposable income c) discretionary income
d) leisure income - CORRECT ANSWER b"
"Wash factor is? a) Number of rooms set aside in the group block that do not sell to members of the group block until the agreed-upon-cut-off-date b) When demand rises above a hotel's ability to meet it (number of available rooms) c) Sale of a good or service in excess of actual supply
d) Group members who check out early rather than stay the entire length of the event -
CORRECT ANSWER d"
"A long-term forecast of demand is based on: a) gross domestic product b) a given hotel's past performance c) all of the above
d) the disposable income of feeder markets - CORRECT ANSWER c"
"When demand levels rise above the hotel's capacity to meet it fully, demand becomes what? a) unconstrained b) spill factor c) constrained
d) overbooked - CORRECT ANSWER c"
"Which of the following contains a breakdown of all revenue and expenses reasonably planned and expected for a particular period and is not likely to change unless unforeseen events force a revision?
a) revenue management tactic 2 b) budget c) forecast
d) market - CORRECT ANSWER b"
"Inflation affects how we measure growth. If a hotel raises its room rates by 5 percent during a period with a 2 percent inflation, its nominal growth is 5 percent, but its real growth is: a) 2% b) 3% c) 4%
d) 1% - CORRECT ANSWER b"
"What is not part of the results or goals of tactical discounting? a) It can attract brand-neutral, price-sensitive guests b) Increases your property revenues, RevPAR and profitability c) It can increase occupancy and grow market share
d) It can generate cash flow in the short run - CORRECT ANSWER b"
"Which are the rates which always apply to membership organizations? a) group rates b) government rates c) promotional rates d) event rates
e) rack rates - CORRECT ANSWER c"
"What type of traditional market segmentation is often identified by postal code? a) geographic b) psychographic c) behavioral
d) demographic - CORRECT ANSWER a"
"Which of the following is NOT another term for the rack rate? a) premium rate b) posted rate c) hurdle rate
d) walk-in rate - CORRECT ANSWER c"
"Gross operating profit per available room equals the gross operating profit for a period divided by the ___? a) available rooms in the market set during that period
(ADR x Occup.%)67.84 x 75%= - CORRECT ANSWER $50.88" 4
"Much of the data required to perform an RRM analysis can be obtained through: a) POS b) observation c) none of the above d) manual collection
e) all of the above - CORRECT ANSWER e"
"A process flow diagram: a) helps to identify potential gaps in a service system b) all of the above c) helps to identify potential redundancies in a service system d) is useful when movement is a large part of a system operations
e) traces how object move through a system - CORRECT ANSWER b"
"The overall seat occupancy and overall table occupancy for the restaurant are: a) 37.2% and 79.6% b) 62.8% and 69% c)56.1% and 61.9% d) 67.0% and 65.4%
e) 54.8% and 59.1% - CORRECT ANSWER e"
"If a restaurant had an overall average RevPASH of $14 and an overall seat occupancy of 66%, its average check would be: a) $9. b) $21. c) $19. d) $26.
e) $22.22 - CORRECT ANSWER b"
"Revenue Management can be defined as: a) a set of strategies and techniques used to sell the right product, to the right customer, and at the right time b) a set of strategies used to sell the right product, to the right customer, at the right time and the right prices c) a set of techniques used to sell the right product, to the right customer, at the right time and the right prices
d) a set of strategies and techniques used to sell the right product, to the right customer, at the 5
right time, and at the right prices. - CORRECT ANSWER b"
"Which of the following about hotel revenue management is FALSE? a) most tactical-level revenue management actions can be controlled with a simple spreadsheet designed by those who use it every day b) revenue management is new, as are all of the strategies that are employed to maximize profit. c) most hotels have multi-tiered rate structures that they adjust based on key revenue management variables d) the hotel industry recognizes revenue management as one of the core competencies vital to profitability.
Revenue management is new, as are all of the strategies that are employed to maximize profit. -
CORRECT ANSWER b"
"t/f Revenue Management is a computer system and is price discounting? - CORRECT
ANSWER false"
"The goal of revenue management is to MAXIMIZE REVENUE per Available time-based inventory unit. RevPATI formula applied to all industries translates into? a) Seats Utilized x Average Revenue per Seat Transaction b) Rooms Utilized x Average Revenue per Room Transaction c) Capacity Utilization x Average Revenue per service transaction
d) Seats utilized x average revenue per mile transaction - CORRECT ANSWER c"
"If a 300-room hotel achieves 70 percent occupancy for April at an ADR of $153 per room, what will room revenue equal?
(300 x 153 x .7)(30)= - CORRECT ANSWER $963,900"
"What do you think the primary objective or revenue management is: - CORRECT ANSWER
maximize revenue by balancing capacity and demand" "Which of the following is NOT a criterion needed for an industry to unlock the full potential of revenue management? a) Varied but predictable demand b) Fixed-capacity environment c) Low fixed costs and high variable costs
d) A perishable primary product - CORRECT ANSWER c"
"Revenue Management is NOT necessarily about: a) achieving 100% occupancy and a perfect science b) identifying relevant sources and always measuring results
amount of demand that will utilize the hotel. RM use modeling tools, intuition to effectively 7 predict demand" "According to the most recent Hospitality Sales & Marketing Association International (HSMAI)
survey, to whom do the largest percentage of hotel revenue managers report? - CORRECT
ANSWER Their hotel's general manager"
"Which group of employees is most responsible for implementing the revenue optimization
strategies and tactics developed by a revenue management team? - CORRECT ANSWER Line-
level employees" "In the revenue manager position, what is the true statement of step 5 in the revenue
management process? - CORRECT ANSWER Evaluate the effectiveness of the previous steps
using tools like the STAR report -assess the success of their strategies and make adjustment."
"Who should lead the revenue management efforts of a lodging or foodservice organization? -
CORRECT ANSWER A qualified revenue manager"
“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 - CORRECT
ANSWER b"
"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 - CORRECT ANSWER c"
"Which of these statements is fully correct? a) Businesses that serve international customers must monitor currency exchange rates b) Businesses that serve international customers must monitor hotels failure rate c) Businesses that serve international customers must monitor similar products
d) Businesses that serve international customers must monitor employment rates - CORRECT 8
ANSWER a"
"Which forecasts are less detailed and accurate? a) strategic forecast b) all of the above c) tactical forecast
d) operational forecast - CORRECT ANSWER a"
"Nonphysical Price Fences, strategic controls or also commonly called Rates with "Fenced" Discounts e.g. Minimum Length of Stay (MLS) are: a) Tactical system controls to be deployed to control rate and room type b) Devices used to slow down customer turnover c) "Rules" or "criteria" or "conditions" that are put in place to govern the conditions and availability of a rate
d) "Rules" or "regulations" that are used to target different market segments - CORRECT
ANSWER c"
"After customers have met their basic financial requirements, any remaining money is considered what? a) nominal income b) constrained income c) disposable income
d)discretionary income - CORRECT ANSWER d"
"Which of the following is not a type of constraint? a) minimum length of stay b) capacity allocation c) closed to arrival (CTA) d) business group
e) rate threshold - CORRECT ANSWER d"
"A _______ contains a breakdown of all revenue and expenses reasonably planned and expected for a particular period and is not likely to change unless unforeseen events force a revision. a) budget b) market c) forecast
d) revenue management tactic - CORRECT ANSWER a"
"Melissa called the High Demand Hotel on Wednesday to make a weekend reservation. The reservation agent checked the computer and then politely told Melissa that the hotel was sold out and they wouldn't be able to provide her with a room. What type of guest would Melissa be classified as?a) denial
a) Tour operations or travel agents 10 b) Meeting planners c) Convention and visitor bureaus
d) Catering managers - CORRECT ANSWER d"
"What information do you need in order to calculate a Rate Achievement Factor (RAF)? a) RevPAR and rack rate b) ADR and rack rate c) occupancy and hurdle rate
d) occupancy and ADR - CORRECT ANSWER b"
"What is the lodging industry term for the situation that occurs when a hotel is unable to accommodate a guest's reservation preference due to the unavailability of the room or service at the price, or on the date, originally requested by the guest? a) block (reservation) b) denied (reservation) c) fenced (reservation)
d) tacked (reservation) - CORRECT ANSWER b"
"How do we call the concept of changing room rates daily or even several times within a day based on up-to date changing market information (e.g. hotels overcharging people who needed a place to stay after an Hurricane devastated their homes)? a) tactical discounting b) GOPac c) demand-based dynamic pricing
d) unfair practice - CORRECT ANSWER c"
"In a 1050-room competitive set, Hotel A has 300 rooms. Hotel B has 350-rooms, and Hotel C has 400 rooms. During a recent 30-day period in which the entire competitive set sold 25,400 rooms. Hotel A sold 8,000 rooms. Which of the following statements is indisputably TRUE? a) both hotel B and Hotel C achieved their fair shares b) hotel a failed to achieve its fair share c) neither hotel b nor hotel c achieved its fair share
d) hotel a exceeded its fair share - CORRECT ANSWER d"
"Many market intelligence services and reports are available to study hotels comp sets. Which
one is NOT often used to monitor the progress of the marketplace? - CORRECT ANSWER
open table" "Room Occupancy percentage or ROP is: a) total rooms occupied divided by total available rooms b) room revenue divided by number of rooms sold c) room cost divided by room sales
d) total rooms available divided by number of rooms sold - CORRECT ANSWER a"
11 "Which of the following statements about market intelligence is FALSE? a) market intelligence is available for both macro and micro market information b) an effective revenue manager usually purchases all available relevant market intelligence c) revenue managers must analyze and interpret market intelligence
d) each market intelligence provider generally has a competitive strength - CORRECT
ANSWER b"
"Which of the following statements is FALSE? a) Competitive sets can change with new ownership or changes in the environment b) It is usually easier and cheaper to down-market a property than to conduct a major overhaul c) Most Internet searches are organic with results based solely on relevant search criteria
d) Brand affiliation can help a hotel property connect with its customers - CORRECT
ANSWER c"
"A given hotel's comp set should contain all other hotels: a) that have similar pricing structures b) that fall within a relevant geographic area c) that compete for the same guests or market segments
d) that have widely recognized brand affiliations - CORRECT ANSWER c"
"Doing business evaluations and choosing between different sales requests it's a complex process because of many reasons. Which of the following statements about competitive sets is FALSE? a) different products and different market segments mix b) perishable products (typ 1 day shelf life) c) competitive sets incur into very different costs per room sold
d) competitive sets have different margins and sales within a limited inventor - CORRECT
ANSWER c"
"Measuring the effectiveness of a revenue management system is: a)a common feature of automated revenue management systems b) mathematically simple when historical data is available for comparison c) difficult because the causes of measurable changes may not be clear
d) unimportant as long as ADR and occupancy increase. - CORRECT ANSWER c"
"If a Hotel has a capacity share of 12.7% and a rooms night share of 11.8% that means that the hotel a)All above statements are incorrect b) did not get their fair share of the room nights c) got less than their fair share
d) room nights is more than their capacity market share. - CORRECT ANSWER b"
d) couponing 13
e) suggestive selling - CORRECT ANSWER b"
"The steps of an RRM program include: a) implementing and monitoring solutions b) collecting data c) all of the above d) analyzing information and developing appropriate solutions
e) establishing the baseline - CORRECT ANSWER c"
"The throughout rates for the three major processes that make up a service delivery system are provided below. Which of these activities is the bottleneck and why? a) assembling the order, because it takes the longest b) delivering the order, because its throughput rate is highest c) taking the order, because its throughput time is lowest d) assembling the order because its throughput rate is highest
e) taking the order, because its throughput rate is lowest - CORRECT ANSWER e"
"Which is NOT a condition necessary for the successful application of RM to a service business: a) perishable inventory b) relatively fixed capacity c) segmentable markets d) time-variable demand
e) low fixed and high variable costs - CORRECT ANSWER e"
"If a 210-seat restaurant is open 360 days a year for 8 hours a day and has total annual revenue of $6,000,000. Its RevPASH is: a) $9. b) $12.
c) $59.52 - CORRECT ANSWER a"
"The Hurdle Rate is...? a) the average rate for a given day b) the lowest rate for a given day c) the maximum rate for a given day
d) the highest rate for a given day - CORRECT ANSWER b"
"Revenue Management includes a multidisciplinary management techniques applied to several sub-sectors of the hospitality. Which of the following is NOT one discipline within Revenue Management? a) logistics Management b) financial Management
c) operations Management 14
d) sales Management - CORRECT ANSWER a"
"t/f A benefit of variable pricing within revenue management is the smoothing of demand. -
CORRECT ANSWER true"
"In January, the 200-room SnowBound Inn ran a skiers special that resulted in them selling 5, rooms during the month. What was the occupancy percentage for the month? (5,735/6200)= .925 x 100= 92. 200 rooms x 31 days in a month Occupancy Percentage = room nights sold in a period/ room nights available in that same period
x 100 - CORRECT ANSWER 92.5%"
"When the American Airlines CEO developed yield management, what type of information was crucial to its success? a) Employee wages b) Fuel prices c) Forecasting
d) Destination times - CORRECT ANSWER c"
"Identify which of these IS NOT a positive of using revenue management strategies and tactics: a) Motivate employees b) Increase revenues and profitability c) Serve more guests
d) Increase market share - CORRECT ANSWER a"
"What is the main reason that travelers today have more clout than ever? a) People are traveling less, which has caused a shift in the power relationship between travelers and hotel providers b) Hospitality employees have become more specialized, putting them at an imbalance with travelers who have more general knowledge c) They have information on virtually everything at their fingertips d) Revenue management techniques offer them greater flexibility in rates when comparison
shopping. - CORRECT ANSWER c"
"To interpret measures of a hotel's performance, managers often compare measures with: a) all of the above b) industry or sector averages c) the budget for the period
d) historical figures from comparable earlier periods at the hotel - CORRECT ANSWER a"
"Hotel revenue managers face hard supply constraints. In which industry below are hard
constraints also likely to be encountered? - CORRECT ANSWER Hair Salons"
