hft4471 exam 1

Most hotels reevaluate changes in room rates:

daily

Your menu has nachos priced at $8.00 with a food cost of 30%. If your average dollar margin is $11.00, are the nachos more likely a "star" or a "dog"?

dog

You've identified a "dog" item on your menu. According to the reading, which of the following is the most logical action to take:

drop the item

True or False: Although hotels let third-party sites sell inventory for them, they do not need to pay those third-party sites a fee.

false

True or False: Demand has very little to do with room rates:

false

True or False: Menu engineering deals primarily with the aesthetics and artistry of the menu.

false

True or False: Menu engineering is ideal for initial menu planning because it does not rely on past sales data.

false

True or False: With good, scientific menu engineering, any restaurant can be made profitable.

false

Which area of a hotel is often referred to as the central nervous center?

front desk

When discussing supply and demand in the hotel industry, supply is:

hotel rooms

Which of the following is NOT an example of a third-party reservation site?

hyatt.com

Moving an item up on the menu tends to:

increase sales

You dropped your price on an item from $9 to $8. Your food cost for the item is $2. Your sales went from 34 units to 44 units. Did your total dollar margin increase or decrease?

increased

A percentage computed by dividing the number of occupied rooms by the number of available rooms times 100 is a formula used to determine:

occupancy rate

Today, most travelers book reservations:

online

When a hotel fills every room, it is sometimes called a:

perfect sell

You've identified a "question mark" item on your menu. According to the reading, which of the following is the most logical action to take:

promote the item through suggestive selling

In the reading, the 4 sections of a 2x2 grid are called:

quadrants

Menu engineering is best described as a _____________ process for improving performance.

quantitative

occupancy rate

rooms sold/rooms available x 100

Your general manager has asked you to determine which day in the upcoming four days will be the busiest for staffing purposes. You anticipate the following arrivals and departures. Arrivals: Thursday 120, Friday 175, Saturday 220, Sunday 110. Departures: Thursday 178, Friday 125, Saturday 85, Sunday 198. If arrivals take twice as much time as departures, which day will be your busiest?

saturday

You have four menu items: cheeseburger, steak, garden salad, quiche. Their unit sales are 45, 23, 56, 33, respectively. Their dollar margins are $7, $13, $5, $4. Which is the "question mark"?

steak

Setting the best rates for a hotel is the job of:

the revenue manager

According to the reading, room rates at a hotel can vary depending on:

time of year

You are reconciling the books for the day. You show cash receipts of $6,478 and credit card receipts of $62,450. The system shows $68,938. Are you too high, too low, or balanced?

too low

True or False: A price change intended to improve the performance of one menu item may affect the performance of another menu item.

true

True or False: The revenue manager is responsible for monitoring room rates continually and making adjustments so rooms can be filled.

true

Last week, you sold 1,000 rooms at an average rate of $200 per night. Your revenue manager estimates that cutting the price of rooms to $180 will let you sell 1,200 rooms. Should you do it?

yes

Your hotel has a policy of slightly overbooking. You have sold your last available room, and three guests have not checked in by 11:00 pm. Based on history, you know that the odds of each guest not showing, if they have not arrived by 11 p.m., is 50%. What are the odds that you will need to "walk" (send to another hotel) a guest tonight?

.875

A 28-story hotel building has 18,000 square feet of space for rooms per floor. The average room is 16 ft x 28 ft. How many rooms do you have available?

1,120

The occupancy was 1,260 in your 1,600 room hotel 7 years ago. Your occupancy rate has increased by 2% per year for the past 7 years. What is your current number of rooms occupied?

1,447

Your revenue manager tells you that nightly revenue can be approximated by the formula: revenue = 11,000 - (r - 105)2where r is the room rate. Assuming your revenue manager is correct, which of the following rates gives the highest nightly revenue?

100

It is 10:00 am and a guest calls with a plumbing problem. You know that maintenance has a list of 4 problems currently being addressed and history indicates that each takes 35 minutes. When is the earliest you could tell the guest that maintenance staff will arrive?

12:20 pm

Your revenue goal for January is $40,000, and you have booked $31,000 thru January 25. What average nightly revenue do you need for the remainder of January?

1500

A two-story hotel has 20,000 square feet of space on the first floor for rooms and 35,000 square feet of space on the second floor for rooms. An average room is 16 ft x 20 ft. How many rooms do you have available?

171

This coming weekend is a holiday weekend. You anticipate the arrival of 350 guests during the busiest hour. One front desk associate can serve a guest in 3 minutes. How many associates will you need so guests can be checked in without a long wait?

18

Your hotel sells four types of rooms: double queen beds for $120/night; king bed for $140/night; junior suite for $210 and luxury suite for $320. Your accountant advises a 3% increase on all rooms. What will the new average room rate be? Assume an equal number of rooms for each room type.

203

You are working at the front desk of a full service, 800 room hotel, with a pool. On average, 1/5 of the rooms request two extra towels per day. How many extra towels do you expect to need in a day?

320

On Tuesday, a hotel sells 240 rooms at an average rate of $150 per night. What is the revenue for the night?

36,000

A branch of mathematics called queuing theory gives a formula for the average length of a line given guest arrivals and front desk associate service time. The formula is p2 / (2 x (1 - p)) where p = average guest arrivals per minute / guests served per minute. If the average guest arrivals per minute is 10 and guests served per minute is 11. What is the average line length? (Compute p to 3 decimal places. Round the answer to the nearest whole number.)

5

You are budgeting for front desk staffing. Each front desk associate is paid $16/hr, and you need daily shifts consisting of 2 associates, 4 associates, and 1 associate to cover each day of the week. Assume each shift is 8 hours long. What is your weekly payroll?

6,272

You need to determine your weekly budget for staffing the front desk. Each shift is 6 hours long and each staffer is paid $18 per hour, except for the night manager who works the 4th shift. She is paid $20 per hour. Staffers for the first 3 shifts are: 2, 4, 2 with the 1 night manager on the 4th shift. What is your weekly budget for payroll?

6,888

You are checking in a guest that booked a room for $285 a night for three nights. You discover that as a government employee he should receive a 20% discount. What is the new cost for his stay?

684

What is a luxury 1,200 room hotel's nightly sales revenues with a room price of $850 and 925 rooms rented?

786,250

Your normal room rate is $120 per night. You offer a 25% discount. What is the discounted room rate?

90

How to calculate average check

AC = total annual sales revenue / (seats X seat turnover X operating days) Ex: restaurant is open 6 days per week for 52 weeks, operations will be conducted for 312 days ( 6 x 52). Assume average seat turnover is two times per day. 870,238/(100 X 2 X 312) = 13.95

You need to be sure that the prices chosen for each room type are:

Appealing to guests shopping for good value Competitive with neighborhood hotels High enough to cover costs and create profit

Critical judgments on customer service matters

Be friendly :) Don't yell even when customers are yelling at you

The main responsibilities and tasks of front desk associates

Central nervous system of the property Addressing guest issues Checking in/out guests

The night auditor is responsible for:

Daily accounting records Late check ins Front desk operations

Rule of thumb: The $1 per $1,000 method

Direct relationship between the cost of the building and the room rate 1,000 in building cost per room, $1 of room rate should be charged in order for the investment to be profitable EX: 100 room hotel, building cost 4,000,000 Average cost of construction = 4,000,000/100 = 40,000

rule-of-thumb method

EX: menu items in a restaurant are priced at 2.5x food cost to achieve a 40% cost of sales Should not be relied on in today's environment because they do not pay attention to competition, value for money, etc

high price method

Emphasizes factors such as quality High price and high quality are not synonymous

According to the reading, if you have an ingredient that is used in only one menu item, you might reasonably:

Find other menu items you can make with that ingredient Drop the menu item

Rate curves are useful for:

Forecasting future demand

Which of the following are normally recorded on a registration card?

Guests name Guests address Length of stay

A "star" menu item has:

High dollar margin, high unit sales

A "question mark" menu item has:

High dollar margin, low unit sales

Handling of "walking" a guest

Hotel is overbooked = walking a guest Find accommodations elsewhere and pay for transportation and first nights stay

A reason you might leave a "dog" on the menu is:

It satisfies a dietary need that a customer may require

You've identified a "star" item on your menu. According to the reading, which of the following is the most logical action to take:

Keep the item at its current price

Differences between pricing hotel rooms (fixed quantity, perishable each night) and ordinary retail goods (variable supply, can be sold at later date)

Look at competition Look at past occupancy info Vary prices according to demand by day of week or demand due to special events If all competitive hotels happen to be full for a certain weekend next month, the RM will likely raise rates, since her hotel has the only rooms available.

A "plow horse" menu item has:

Low dollar margin, high unit sales

A "dog" menu item has:

Low dollar margin, low unit sales

mark up method

Markup: difference between cost of an item and its selling price Used when a restaurants traditional food cost percentage is applied to determine the price of any new menu items offered EX: restaurant has been operating at a 40% food cost, any new menu ite,s offered would be prices so that they also result in a 40% food cost. MAJOR PROBLEM: it assumes that "40%" is the correct food cost to achieve desired profit

Objectives of long-run (strategic) pricing

Maximize sale revenue Maximize return on owners' investment Maximize profitability Maximize business growth in a new operation Maintain or increase market share for an established operation

intuitive method

No real knowledge of the business needed Operator assumes prices established are the right ones because customers are willing to pay them Disadvantages: prices charged are unrelated to profits

potential average room rate

Potential Average Rate provides the amount of revenue that would have been generated if all the rooms were sold at their published or rack rate.

trial and error method

Prices are changed up and down to see what effect they have on sales and profit Ignores a lot of variables- general economic conditions, seasonality of demand, competition

price cutting method

Prices are reduced below those of competition. Risky method if it ignore costs, bc variable costs are higher than prices, profits will be eroded Selling additional products must more than compensate for the reduction in prices. Price war may start.

How supply and demand influences the price of hotel rooms

Supply is defined as the number of rooms available to sell each night; hotels call this their inventory of rooms. Demand is the total number of rooms guests would like to purchase for a given evening. when the demand is low, rates may need to be lowered to attract guests, who might not otherwise think about staying at a hotel. (It's better to sell rooms at discounted rates than to have empty rooms producing no revenue at all.)

Understand short-run (tactical) pricing

Take advantage of situations that happen day to day Reacting to short run changes in price made by competitors Knowing how large a discount to offer group business while still making a profit Knowing how much to increase prices to compensate for an increase in costs Knowing how much to increase price to cover renovation costs Adjusting prices to reach a new market segment Knowing how to adjust prices in the off season to attract business Offering special promotional prices

The rack rate at a hotel is:

The highest rate the hotel charges

You've identified a "plow horse" item on your menu. According to the reading, which of the following is the most logical action to take:

Try raising the price

You have a major college football game coming to town this weekend. A good revenue manager would likely:

Use minimum stay restrictions to fill several nights Increase prices

Which of the following is NOT a consideration in setting room prices?

Website look and feel

The dates a guest checks into and out of a hotel are the:

arrival and depature