Hospitality Revenue Management final exam review
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1. What is the industry term used to describe the sum of prices paid by a
business's customers?: total revenues
2. Historically, what concept have hospitality managers chiefly used to calcu-
late their selling prices?: costs
3. What is an algebraic equivalent of the formula: Sales = Costs + Profit?: prof-
it=sales-costs
4. What is the name for the net value achieved by both parties in a business
transaction?: profit
5. What element is not present in a barter economy?: money
6. What is the formula used to calculate an owner's ROI?: Owner's Investment
Return / Owner's Original Investment = Owner's Return on Investment
7. Sandy has 100 hotel rooms to sell. This Saturday night has enough cus-
tomers to sell 125 rooms so she will be refusing 25 requests for rooms. What
is this an example of?: constrained supply
8. Which industry was the first to use Yield Management principles?: airline
9. What is the industry term used to describe the selling of rooms which are
not actually available for sale?: overbooking
10. What is the formula used to calculate Average Daily Rate?: Total Room's
Revenue / Total Rooms Sold = Average Daily Rate
11. 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?: 70%
12. 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?: $140
13. What is the industry term for the average revenue generated by each
occupied guestroom during a defined period of time?: RevPOR
14. What is the formula used to calculate GOPPAR?: (Total Revenue - Manage-
ment Controllable Expenses) / Rooms Available to Sell = GOPPAR
15. What is the industry term for a customer group which can be readily
identified by one or more common characteristics?: market segment
16. What is a rack rate?: The price of rooms when no discounts of any type are
offered
17. What is:
Total period revenue
(Number of available seats) x (hours of seat availability): RevPASH formula
18. What is the term used to identify a management philosophy that places
customer gain ahead of short-term revenue maximization in revenue manage-
ment decision making?: Customer-centric revenue management
19. What is the term used to describe the potential customers to whom a
business's marketing activities and messages are directed?: target market
, Hospitality Revenue Management final exam review
Study online at https://quizlet.com/_5q6hqu
20. What is the term used to describe efforts undertaken to encourage travel
and tourism to a specific geographic area or attraction?: destination marketing
21. What is the name for the value given up by a buyer and a seller in a business
transaction?: price
22. Charging guests for watching a "Pay-Per-View" movie in their hotel gue-
stroom is an example of what type of pricing?: two-tiered pricing
23. What is the fundamental assumption upon which the concept of consumer
rationality is based?: Buyers act in ways that are of personal benefit to them
24. What is the revenue management term used to describe the perceived
benefit gained, minus the price paid, in a business transaction?: value
25. 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?: value
proposition
26. Which of the following terms would be included in the Place portion of a
hotel's marketing mix?: distribution channels
27. What is the fundamental assumption upon which the Law of Supply is
based?: The higher the demand for a product the more of it will be produced by
sellers
28. According to Alfred Marshall's work, if the price of a product is lower than
the natural, or equilibrium price, what will happen?: The demand for the product
would exceed its supply
29. 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?: The new price (P2) would be higher than the previous price (P1) and
supply would increase
30. What concept is displayed by the intersecting point on a supply and
demand curve?: An estimate of the amount of a product that would be purchased
at a known price and point in time
31. What must be true if a product producer is to continue creating and selling
products?: Revenues must exceed costs
32. What is the specialized branch of accounting that focuses on recording
and analyzing the expenses incurred by an organization?: cost accounting
33. What is the industry term for the point at which an organization's revenues
exactly equal its costs?: break-even point
34. Which of the following foodservice costs is a variable cost?: food
35. Which of the following lodging costs is a fixed cost?: mortgage payments
36. 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
Study online at https://quizlet.com/_5q6hqu
1. What is the industry term used to describe the sum of prices paid by a
business's customers?: total revenues
2. Historically, what concept have hospitality managers chiefly used to calcu-
late their selling prices?: costs
3. What is an algebraic equivalent of the formula: Sales = Costs + Profit?: prof-
it=sales-costs
4. What is the name for the net value achieved by both parties in a business
transaction?: profit
5. What element is not present in a barter economy?: money
6. What is the formula used to calculate an owner's ROI?: Owner's Investment
Return / Owner's Original Investment = Owner's Return on Investment
7. Sandy has 100 hotel rooms to sell. This Saturday night has enough cus-
tomers to sell 125 rooms so she will be refusing 25 requests for rooms. What
is this an example of?: constrained supply
8. Which industry was the first to use Yield Management principles?: airline
9. What is the industry term used to describe the selling of rooms which are
not actually available for sale?: overbooking
10. What is the formula used to calculate Average Daily Rate?: Total Room's
Revenue / Total Rooms Sold = Average Daily Rate
11. 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?: 70%
12. 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?: $140
13. What is the industry term for the average revenue generated by each
occupied guestroom during a defined period of time?: RevPOR
14. What is the formula used to calculate GOPPAR?: (Total Revenue - Manage-
ment Controllable Expenses) / Rooms Available to Sell = GOPPAR
15. What is the industry term for a customer group which can be readily
identified by one or more common characteristics?: market segment
16. What is a rack rate?: The price of rooms when no discounts of any type are
offered
17. What is:
Total period revenue
(Number of available seats) x (hours of seat availability): RevPASH formula
18. What is the term used to identify a management philosophy that places
customer gain ahead of short-term revenue maximization in revenue manage-
ment decision making?: Customer-centric revenue management
19. What is the term used to describe the potential customers to whom a
business's marketing activities and messages are directed?: target market
, Hospitality Revenue Management final exam review
Study online at https://quizlet.com/_5q6hqu
20. What is the term used to describe efforts undertaken to encourage travel
and tourism to a specific geographic area or attraction?: destination marketing
21. What is the name for the value given up by a buyer and a seller in a business
transaction?: price
22. Charging guests for watching a "Pay-Per-View" movie in their hotel gue-
stroom is an example of what type of pricing?: two-tiered pricing
23. What is the fundamental assumption upon which the concept of consumer
rationality is based?: Buyers act in ways that are of personal benefit to them
24. What is the revenue management term used to describe the perceived
benefit gained, minus the price paid, in a business transaction?: value
25. 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?: value
proposition
26. Which of the following terms would be included in the Place portion of a
hotel's marketing mix?: distribution channels
27. What is the fundamental assumption upon which the Law of Supply is
based?: The higher the demand for a product the more of it will be produced by
sellers
28. According to Alfred Marshall's work, if the price of a product is lower than
the natural, or equilibrium price, what will happen?: The demand for the product
would exceed its supply
29. 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?: The new price (P2) would be higher than the previous price (P1) and
supply would increase
30. What concept is displayed by the intersecting point on a supply and
demand curve?: An estimate of the amount of a product that would be purchased
at a known price and point in time
31. What must be true if a product producer is to continue creating and selling
products?: Revenues must exceed costs
32. What is the specialized branch of accounting that focuses on recording
and analyzing the expenses incurred by an organization?: cost accounting
33. What is the industry term for the point at which an organization's revenues
exactly equal its costs?: break-even point
34. Which of the following foodservice costs is a variable cost?: food
35. Which of the following lodging costs is a fixed cost?: mortgage payments
36. 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
