REVENUE MANAGEMENT SECTION 1 EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026 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

REVENUE MANAGEMENT SECTION 1 EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026 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 - Answers d. BAR Rate (best available rate or retail rate) Because of the cyclical demand characteristic of most hotels and the perishability of the hotel product (rooms), the emphasis of revenue management focuses on __________. a. inventory management b. human resource management c. cost management d. information systems management e. demand management - Answers e. demand management Consumer willingness to pay pricing is based on trying to understand consumer __________ and their ___________. a. rate portfolio and cross product elasticity b. rate parity and rate cannibalization c. reference prices and price sensitivity d. market segmentation and rate perishability e. cost structures and income levels - Answers c. reference prices and price sensitivity When looking at the ADR and RevPar data from Smith Travel Research as reported in the Star Reports, it is critical to remember that those data reflect only _________? a. midscale and above hotels b. branded hotels (e.g., those that have a major hotel brand such as Marriott, Hyatt, or Hilton) c. room revenue d. hotel revenues not costs e. CONUS travel revenues - Answers c. room revenue Conference groups are highly valued by many hotels, even though they are commonly booking their rooms at discounted rates. Why? a. low cross product elasticity b. high cross product elasticity c. low ADR index values d. high ADR index values e. high RevPar index values - Answers b. high cross product elasticity Because of the taste and buying heterogeneity of hotel guests, market segmentation is a key component of revenue management, resulting in the following key revenue management objective. a. minimizing cross product elasticity b. minimum length of stay restrictions c. maximum length of stay restrictions d. protecting inventory for high value customers who tend to book last e. minimizing the number of rates available in the rate portfolio - Answers d. protecting inventory for high value customers who tend to book last Which of the following is a key component of competition based pricing? a. forecasting market cost structures b. forecasting competition reactions to the hotel's prices c. forecasting consumer cross product elasticity d. forecasting rate cannibalization e. forecasting comp set membership changes - Answers b. forecasting competition reactions to the hotel's prices According to Duetto, what is one of the pricing mistakes made by hotel revenue managers. a. Not reacting to competitors pricing changes b. Changing your rates c. Not selling your rooms on a first-come, first serve basis d. Selling out too soon - Answers d. selling out too soon What does a consumption fence refer to? • A. Length of stay/date of stay • B. Membership characteristics • C. Level of service • D. Time of booking/location of booking - Answers a. length of stay/date of stay • What Report shows us future information • A. STAR report • B. Travel Click rate 360 • C. Travel info 360 • D. Balance sheet - Answers b. Travel Click rate 360 • What is the primary purpose of a minimum length of stay fence in hotel room pricing? • a) minimize cross product elasticity • b) grow cross product elasticity • c) grow group demand • d) extend the shoulders on a demand peak - Answers d. extend the shoulders on a demand peak • Within the context of hotel revenue management, hotels allocate a specific number of rooms to different rates with the purpose of... • a) minimizing market conflict • b) minimizing the mix of customers • c) minimizing rate fencing • d) optimizing the mix of customers - Answers d. optimizing the mix of customers Psychography segmentation classify a population according to: • A. geographical units such as nations, regions, states, counties, or cities. • B. purpose • C. age, gender, occupation, income, etc.. • D. attitudes, values, or fears - Answers d. attitudes, values, or fears What is the definition of Revenue Management? • A. Selling the right location to the right customer at the right price at the right time through the right channel • B. Selling the right room to the right customer at the right price at the right time through the right channel • C. Selling the right room to the right customer at the right price at the right season through the right channel • D. Selling the right room to the right family at the right price at the right time - Answers b. selling the right room to the right customer at the right price at the right time through the right channel What is an inelastic demand? a. When price changes, demand changes a lot. b. When price changes, demand changes a little. c. When price goes up, demand does not change. d. When price is stable, demand changes a lot. - Answers b. when price changes, demand changes a little We go thru the necessary conditions for Revenue Management. Please select which element below is not the necessary condition. • A. Perishable inventory • B. Cyclical demand • C. High variable cost, low fixed cost • D. Fixed capacity - Answers c. high variable cost, low fixed cost Rebecca is the director of revenue management for a hotel in Blacksburg with 160 rooms. Last Tuesday she was successful renting 120 of her rooms. Her total room revenue was $20,000. What was her occupancy rate? • a. 55 • b. 65 • c. 75 • d. 85 • e. none of the above - Answers c. 75 Occ rate = rms sold/rms avail occ rate = 120/160 occ rate = 75% • Rebecca is the director of revenue management for a hotel in Blacksburg with 160 rooms. Last Tuesday she was successful renting 120 of her rooms. Her total room revenue was $20,000. What was her ADR? • A. 170 • B. 165.665 • C. 160 • D. 166.67 - Answers d. 166.67 ADR = rm rev/rms sold ADR = $20,000/120 ADR = 166.67 • Rebecca is the director of revenue management for a hotel in Blacksburg with 160 rooms. Last Tuesday she was successful renting 120 of her rooms. Her total room revenue was $20,000. What was her RevPAR? • A. 120 • B. 166.667 • C. 165 • D. 125 - Answers d. 125 REVPar = rms rev/rms avail REVPar = $20,000/160 • A hotel has 500 rooms. 50% of those 500 rooms are occupied by transient customers and 40% of those 500 rooms are occupied by group customers. 20% of transient customers consumed 20$ on food and half of that of drinks. All group customers consumed 15$ on food. Transient ADR is 100$. How much is the total revenue form transient customers? • A. 25000 • B. 26000 • C. 27000 • D. 26500 - Answers d. $26,500 transient customers = 50% of 500 = 250 rms 20% of 250 = 50 rms 50 rooms spent 20$ on food and 10$ on beverages 50*20 = $1,000 50*10 = $500 250 rm @ $100 = $25,000 total transient rev = $26,500 A hotel has 500 rooms. 50% of those 500 rooms are occupied by transient customers and 40% of those 500 rooms are occupied by group customers. 20% of transient customers consumed 20$ on food and half of that of drinks. All group customers consumed 15$ on food. Group rate is 80$. How much is the total revenue form group customers? • A. 19000 • B. 20000 • C. 19100 • D. 19200 - Answers a. $19,000 group customers = 40% of 500 = 200 rms all rooms spent $15 on food 200*15 = $3,000 200 rm @ $80 = $16,000 total group rev = $19,000 • Your Hotel's RevPAR is 150$ and your Compset RevPAR is 140$. How much is your RevPAR index. • A. 106 • B. 107.1 • C. 106.1 • D. 105 - Answers b. 107.1 REVPar Index = our prop/compset*100 REVPar Index = 150/140*100 = 107.1 Your hotel's ADR is 120$. Your ADR index is 110. how much is your Compset ADR? • A. 108 • B. 109.09 • C. 100 • D. 105.09 - Answers b. 109.09 X=compset ADR 110 = (120/X)*100 110/100=120/X 1.1=120/X 120/1.1=X X = 109.09