Revenue Management Final exam practice
questions
What is bigger in the tourism industry, fixed costs or variable costs? - ANS- fixed costs
are bigger
-Think of an airplane: staffing, airport fees (fixed) - huge amount of the costs for
airplanes come from fixed costs; food, fuel (variable) - not as easy to determine the
variable costs
We can reduce prices (even below total cost per room), as long as the
reduced price covers, fixed cost per room or variable cost per room? - ANS- We can
reduce prices as long as the reduced price covers the variable cost per room
-because we are going to have the fixed costs not matter if we have the person in the
room or not
High Value Customers tend to book early or last? - ANS- last
Do we sell "time blocks" or "physical products"? - ANS- time blocks
What implication do time blocks have? - ANS- we cannot store it for tomorrow, it is gone
once it is not sold for that day
"I want my hotel to be the first to sell out in the market": Correct or incorrect? - ANS-
incorrect
RM can be organized with different levels regarding the people involved. How many?
Which ones? - ANS- Property Level - Corporate Level - 3rd Party Services
What does a booking curve represent? - ANS- the expected number of bookings for
each day until the arrival date
-forecasted bookings
What does a pace report track? - ANS- The OTB reservations against the forescasted
reservations
Who attends the weekly RM meetings? - ANS- -Revenue manager
-General manager
, Sales manager
-Rooms manager
***and sometimes
-Food and Beverage management
-Marketing
-HR management
How many internal performance indicators do we have? - ANS- 6: OR, ADR, RevPar,
and the percent changes of each of them
How many external performance indicators do we have? - ANS- 6: OR index, ADR
index, RevPar index, and the percent
changes of each of them
What is the minimum number of hotels in a comp set? - ANS- 4
What is the threshold in the OR, ADR and RevPar indexes that determines the point we
are outperforming the comp set? - ANS- 100
Price from a marketing standpoint includes both monetary and
________________costs - ANS- non‐monetary
price - ANS- The amount of money charged for a good or service.
BAR and BRG - ANS- The hotel makes a promise that the room prices found on their
website are the best rates compared to any other sites.
Example of BAR guarantee? - ANS- If you found a better rate then you will get that rate
plus some additional discount (within 24 hours of making the reservation) in PA
Who requires whom to sign a rate parity agreement? - ANS- OTA
In what type of rates are the "Last Room Available Agreements" signed? - ANS-
Corporate
Consumer reference prices: what is bigger, the increase in demand derived from
reducing a rate by $100 or the decrease in demand resulting from augmenting a rate by
$100? - ANS- the decrease in demand resulting from augmenting a rate by $100
-because it is more impactful
questions
What is bigger in the tourism industry, fixed costs or variable costs? - ANS- fixed costs
are bigger
-Think of an airplane: staffing, airport fees (fixed) - huge amount of the costs for
airplanes come from fixed costs; food, fuel (variable) - not as easy to determine the
variable costs
We can reduce prices (even below total cost per room), as long as the
reduced price covers, fixed cost per room or variable cost per room? - ANS- We can
reduce prices as long as the reduced price covers the variable cost per room
-because we are going to have the fixed costs not matter if we have the person in the
room or not
High Value Customers tend to book early or last? - ANS- last
Do we sell "time blocks" or "physical products"? - ANS- time blocks
What implication do time blocks have? - ANS- we cannot store it for tomorrow, it is gone
once it is not sold for that day
"I want my hotel to be the first to sell out in the market": Correct or incorrect? - ANS-
incorrect
RM can be organized with different levels regarding the people involved. How many?
Which ones? - ANS- Property Level - Corporate Level - 3rd Party Services
What does a booking curve represent? - ANS- the expected number of bookings for
each day until the arrival date
-forecasted bookings
What does a pace report track? - ANS- The OTB reservations against the forescasted
reservations
Who attends the weekly RM meetings? - ANS- -Revenue manager
-General manager
, Sales manager
-Rooms manager
***and sometimes
-Food and Beverage management
-Marketing
-HR management
How many internal performance indicators do we have? - ANS- 6: OR, ADR, RevPar,
and the percent changes of each of them
How many external performance indicators do we have? - ANS- 6: OR index, ADR
index, RevPar index, and the percent
changes of each of them
What is the minimum number of hotels in a comp set? - ANS- 4
What is the threshold in the OR, ADR and RevPar indexes that determines the point we
are outperforming the comp set? - ANS- 100
Price from a marketing standpoint includes both monetary and
________________costs - ANS- non‐monetary
price - ANS- The amount of money charged for a good or service.
BAR and BRG - ANS- The hotel makes a promise that the room prices found on their
website are the best rates compared to any other sites.
Example of BAR guarantee? - ANS- If you found a better rate then you will get that rate
plus some additional discount (within 24 hours of making the reservation) in PA
Who requires whom to sign a rate parity agreement? - ANS- OTA
In what type of rates are the "Last Room Available Agreements" signed? - ANS-
Corporate
Consumer reference prices: what is bigger, the increase in demand derived from
reducing a rate by $100 or the decrease in demand resulting from augmenting a rate by
$100? - ANS- the decrease in demand resulting from augmenting a rate by $100
-because it is more impactful
