Revenue Management Final

Hair Salons
Hotel revenue managers face hard supply constraints. In which industry below are hard constraints also likely to be encountered?
Implemented a differential pricing strategy and allocate the limited supply to those market segments who value the rooms most highly.
Lisa is the revenue manager of a 500 room hotel property. Next week-end demand for her rooms will exceed the number of rooms she has available for sale. Which high demand pricing strategy will optimize revenue for her property?
Number of seats and number of hours open per week.
Which two factors establish a restaurant’s weekly customer capacity?
Anti-trust legislation
What is the name for the laws and regulations aimed at preventing abusive business behavior or anti-competitive practices?
What is the name used to describe a consortium of independent organizations formed to limit competition by controlling the production, distribution and pricing of product or service?
Sherman Antitrust Act
What is the name of the US legislation that outlawed all contracts and conspiracies that unreasonably restrain interstate trade?
Sherman Antitrust Act
What is the name of the US legislation that prohibits competing hospitality managers from meeting to agree upon the room prices that will be charged for upcoming events or charged to specific group of customers?
Reference price
What is the name for the price perceived by consumers to be the normal or standard price for a product or service?
Discounts are viewed more favorably then surcharges
What is true about the way buyers generally view variance in a seller’s prices?
What is the name of the hospitality management position responsible for the accounting functions in a hotel?
A corporate level executive
To whom would a revenue manager likely report if consistency across multiple properties was of most importance?
Their hotel’s general
According to the most recent Hospitality Sales & Marketing Association International (HAMAI) survey, to whom do the largest percentage of hotel revenue managers report?
Line-level employees
Which group of employees is most responsible for implementing the revenue optimization strategies and tactics developed by a revenue management team?
Regular strategy meetings
What vehicle do effective revenue managers use to best develop and evaluate their organizations’ pricing and revenue management strategies and tactics?
They will cause an increase in RevPAR
What is true about rooms that are sold at prices below a hotel’s a variable operating cost?
Scott is a revenue manager who calculates the following for his hotel:
Total (rooms + non-rooms) revenue/ Total Occupied Rooms =?
Complimentary breakfast costs
What is considered a room-related occupancy cost?
At Rachel’s hotel the CPOR is $40.00. Her Net ADR Yield averages 80% and her franchise fees average 5%. What is Rachel’s average minimum ADR sales point?
(GOP This Period -GOP Last Period)/(Total Revenue This Period-Total Revenues Last Period)
What is the formula used to calculate flow-through for an accounting period?
Last month Carl’s hotel had a ADR of $150.00. The ADR of his comp. set was $200.00. What was Carl’s ADR index last month?
His occupancy index is less then 100%
Last month Carl’s hotel had an ADR index of 125%. In the same month his RevPAR index was 100%. What can be said about Carl’s hotel?
Last month Carl’s hotel had 10,000 available room nights and sold 6,000 room nights. Last month his comp set had an average occupancy of 80%. What was Carl’s occupancy index last month?
Carefully increase rack rates to optimize GOPPAR
This Year-To-Date, Carl’s hotel is averaging an ADR of $125.00. The ADR of his comp. set for the same period is $125.00. Assume Carl’s comp. set is an appropriate one. What would you recommend Carl do if his occupancy index for the same period is 140%?
Last month Carl’s 500-room hotel had a comp. set that included five additional hotels offering a total of 2000 rooms. What was Carl’s supply share % last month?
Increased RevPAR and reduced flow-thru %
It is near the end of the month and Tamrika is a revenue manager considering the impact of selling 200 room nights, for use this month, but at a room rate far below her hotel’s average room rate. What would be the impact on her hotel’s operating statistics if she makes this sale?
Restaurant industry pricing methods are very different from hotel industry pricing methods
Which of the following statements about restaurant pricing methods is true?
Shaniqua’s restaurant utilizes a product cost percentage pricing system. What should be the selling price for a steak dinner she sells if her total plate cost for the dinner is $7.00 and her desired product cost is 25%?
Product Cost: Plus
Which menu pricing system would utilize an operation’s prime costs when calculating its selling prices?
An appropriate menu price should dictate an item’s cos
For revenue managers seeking to optimize revenues in their foodservice operations, which statement about menu prices is true?
Shaniqua’s restaurant utilizes a product cost percentage pricing system. She would like to sell an item for $19.95. Her targeted product cost is 40%. With a 40% product cost, what is the amount her kitchen staff can spend on product cost when making this item?
The quality of a 20 year old Scotch is higher than a one year old Scotch
Why can foodservice operators sell a 20 year Scotch at a price higher than a one year old Scotch?
295/130 = Table turns
Poco Miller’s restaurant has 130 seats. Last night Poco served 295 guests. What was is the formula Poco would use to calculate her table turns?
Product Versioning
Offering the same menu item in a variety of portion sizes is an example of what type of differential pricing strategy?
Last night Lara’s restaurant served 225 guests and achieved total revenue of $4,500. What was Lara’s check average last night?
Menu items sold
Which factor has historically provided the basis for a foodservice manager’s assessment of revenue generation efficiency?
For analysis purposes Jenny considers her restaurant to have three day parts. These three are breakfast, lunch and dinner. Last month Jenny’s breakfast sales were $44,000. Total sales were $176,000. What percent of sales were contributed by breakfast?
April’s sales at Raja’s restaurant this year were $80,000. That was a decrease of 20% compared to the revenue achieved in April of last year. What was the amount of revenue achieved in Raja’s restaurant during April of last year?
Alice’s restaurant is located in a shopping mall. Her store occupies 950 square feet. Last month Alice’s revenues were $28,500. What was the revenue per square foot achieved by Alice’s restaurant last month?
Last month revenue in Sofia’s take out pizza shop was $50,000. Sofia used 1250 labor hours to generate the revenue and she pays her employees an average of $10.00 per hour. 5000 guests were served in the month. What was Sofia’s Labor Cost % for the month?
The Busy Bee restaurant has 100 seats. Between 5:00 p.m. and 6 p.m. yesterday the Busy Bee served 75 guests. Revenues during that time period were $3,700. What was The RevPASH achieved by the Busy Bee yesterday between 5:00 p.m. and 6 p.m.?
RevPASH would decrease if check average did not change
What would be the typical impact on RevPASH of an increase in guest duration?
Seat Utilization % (X) Check Average= RevPASH
What formula can revenue managers use to calculate RevPASH?
28-day accounting period
What is the name for the accounting device used by foodservice operators to divide their operating year into 13 equal time periods?
What business segment best describes a company that is engaged primarily in the sale of intangible goods?
Low variable costs and high fixed costs
Revenue optimization strategies can make the most impact on inventory management in industries with which kind of cost structures?
Variable Demand
Nearly every ski resort in the Upper Northeastern part of the US generates the majority of its annual income during the winter months. What is the cause of this?
Product Versioning
Selling season tickets to sporting events such as professional baseball or basketball games at a price per game that is lower than the cost of individual tickets to all of the games is an example of what revenue optimization activity?
Probabilistic Modeling
What is the business term used to describe the application of statistical formulas to past events for the purpose of predicting future events?
Revenue manager training and motivating
Which tasks would be of most importance to revenue managers with multi-unit revenue generating responsibilities?
Brand Consolidation
What is the hospitality industry term used to describe a shrinking number of alternative franchisors offering increasing numbers of franchise alternatives?
Sandstone’s Company Controller
Larissa is the corporate revenue manager for Sandstone hotels. She oversees 10 of her company’s franchised properties. Which of the following is an example of Larissa’s internal customers?
An operation’s Total Revenue
In the hospitality industry what is the financial basis used for calculating the franchise fees or royalties that are paid to franchisors?
Brand Equity
What is the hospitality term used to describe the accumulated value of a brand’s image or identity as perceived by consumers?
A special tax on the sale of hotel rooms
In the US what is the dominate vehicle used by governmental authorities to fund local area destination marketing efforts?
Product Pricing
Which of the following revenue management activities would not be included in the typical job description of a revenue manager employed by a CVB?

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