Revenue Management Exam 2
Hippo Hollow Resort, which has 200 rooms available to sell each night, was very busy New Year's Eve, as it sold 180 rooms and generated a $50 RevPAR. What was the room revenue on New Year's Eve?
$10,000
The 300-room Redwood Resort had a slow night last night, as its occupancy rate was 40%and room revenues were only $9,600. What was its ADR last night?
$80
The exclusive Madonna Hotel, which boasts 450 guest rooms, sold 280 rooms and recorded $36,500 in room revenue last Friday. What was its RevPAR?
$81.11
The sales process includes three phases. Which of the following phases is accurately described?
(3) The post-sale (getting feedback from the client after their stay)
Which of the following formulas for determining annual revenue is correct?
(Annual occupancy percentage) x (number of rooms) x (days open) x (the daily rate)
Allocating a percentage of sales revenue is a popular alternative method for developing a marketing budget. The average allocation usually ranges between ____ % of the annual budget.
5 and 10
The Incredible Inn (with 120 rooms) is located in Hoboken, New Jersey. On September 1, 2017 the hotel sold 60 room collecting revenue of $5,400. What was the Incredible Inn's occupancy rate?
50%
A hotel sales director assesses each salesperson's performance according to whether or not they've met or exceeded their quota on a consistent basis. The sales quota can be determined in part by: The prior period's territory sales numbers The salesperson's salary multiplied by some factor The prior year's goal multiplied by an annual growth rate
All of the above
An example of collapsing the data, strategy and silos is: Offering a discount to a daily buffet breakfast Booking a spa service during slow business periods Giving drink discounts
All of the above
Digital transformation includes: Adopting the cloud Using Artificial Intelligence Machine Learning
All of the above
Hotels benefiting from revenue management systems include: Properties having many rooms Properties having many different types of room Properties having many different locations
All of the above
Revenue and profit margins are under attack due to: Changing consumer behavior Disruptive new businesses Internal inefficiencies
All of the above
Revenue management focuses on which of the following sources? Food and beverages Spa services Room revenue
All of the above
The Best Hotel understands that external research is critical to a successful marketing plan. Its external marketing research includes economic indicators. Which of the following is an economic indicator? Gasoline and airline prices Consumer price index Consumer confidence
All of the above
The sales and marketing director at the Hyatt Hotel was working on the marketing budget, and she needed to calculate hotel non-room-related revenues. Which of the following are non-room-related revenues? Food and beverage sales from restaurants and banquets Recreation fees for spas or golfing Business center charges
All of the above
The term "demand generator" is used frequently in the hospitality industry. What does it mean?
Anything that drives demand for hotel rooms, whether it's a beach, lake, sporting event, concert series, or hotel promotion
Dynamic pricing relies on demand-based pricing, when certain considerations and actions are implemented. Which of the following statements below is FALSE as it relates to demand-based pricing?
As demand increases, higher rates are quoted and more lower-rated rooms are made available
Which of the following revenue-management axioms is true?
As demand increases, lower-rate categories are closed and higher-rate categories (aka tiers) are quoted
The average selling price of all guest rooms in a hotel or city during a specific period of time is called the _____.
Average daily rate
The vice-president of sales and marketing for the Hollywood Hotel met with her team to discuss the types of accommodations hotel guests prefer and how much they are willing to pay for those accommodations. What guest-segmentation descriptors was she discussing?
Behavioral/lifestyle
External marketing efforts include comparing the strengths and weaknesses of the hotel to the competitive set (head-on competitors), which is called _____.
Benchmarking
What term describes a form of marketing segmentation based on the differences in specific benefits that different groups of consumers look for in a product or reward program?
Benefit segmentation
Which market segment is most likely to spend nights at The Downtowner Hotel (located in the heart of the city) Monday through Friday?
Business individuals and groups
The High-Top Hotel, located i suburban Pittsburgh, accepted more reservations than it had actual rooms available knowing there would be at least a few cancellations and no-shows. This hotel implemented which special restriction tactic?
Capacity management
Leisure/SMERF group guests are generally a bit more _____.
Casual and frequently on a tight budget
In hotel sales and marketing vocabulary, the term MICE refers to _____.
Commercial guests attending company conferences, corporate retreats, training sessions, and so on.
Once a meeting planner and hotel agree on rooms and rates, the planner provides a deposit, the tentative booking turns into a _____, and the hotel reserves a block of rooms to accommodate the group.
Commitment
A selection of competing hotels against which a property or chain measures its own performance, based on location service level, amenities, and the hotels' physical condition, is referred to as the
Competitive set
The group of properties a hotel directly competes with is referred to as its
Competitive set
A sales pace report by room type may reveal patterns that give the sales and marketing team insight market dynamics. All of the following patterns are applicable to the sales pace report except ______. Room mix Seasonal considerations Day of the week Competitors' room types
Competitors' room types
Which of the following terms refers to the number of guests interested in staying at a hotel and how much the guests are willing to pay for a room?
Demand
Which of the following terms refers to an organization or event that drives customers into a marketplace or an activity or entity that produces great consumer interest to purchase?
Demand generator
Which of the following terms refers to information (such as age, education, and income) gathered about large groups of guests in an effort to identify common trends and improve selling to those groups?
Demographics
Which of these five guest-segmentation descriptors includes potential guests' income level, age, gender, and education?
Demographics
The popular Le Meridien Hotel in Seattle has a philosophy of selling as many high-priced rooms as possible to satisfy the projected demand for rooms and then renting unsold rooms for as little as half the regular price if necessary because it would rather get half price rather than nothing. This tactic is known as _______.
Discount allocation
The practice of offering discounted rates for specific room types during specific periods is called _____.
Discount allocation
During busy seasons, a hotel can reject a reservation request for a one-night stay, even if rooms are available, in favor of a multi-night reservation. This restriction is referred to as ____.
Duration control
The use of computer algorithms to set room prices over time for various market segments (business, leisure, individual, group, etc.) is called ____ pricing.
Dynamic
A revenue management strategy based only on price optimization is the best method
False
Optimizing revenue across all channels means setting holistic goals
False
Revenue Management does not involve corporate-negotiated prices
False
Revenue managers should not need to set clear rules for each market segment
False
T or F: RevPAR = rooms available x ADR / sold rooms
False
Today's revenue managers are only responsible for optimizing occupancy and ADR
False
The presale phase involves hosting a multitude of meeting planners, tour operators, travel agents, and travel media in an effort to create awareness of the destination and to increase product knowledge and/or destination knowledge. These tours are called _____ tours.
Fam
The revenue manager typically reports to the _____.
General manager
Which of the following statements describes the relative profitability of hotel products and services, from highest to lowest?
Guest rooms; meeting room space; banquet beverages (alcohol)
Revenue management approaches use a popular principle called demand-based pricing; as demand increases, _____ - rate categories are opened up
Higher
Which of the following managers are NOT part of the revenue management team? Front office manager General manager Human-resources manager Sales manager
Human-resources manager
Many sales departments maintain a color-coded demand calendar for the year that reflects historical data and forecasts events. This calendar serves as a guideline for the sales manager, and it details what type of information?
It details how much room capacity can be sold at what rates during a particular week of the month or year
Which of the following refers to high-yield consumer segments who are provided special privileges, perks, and attention?
Loyal guests
Many hotels use incentives to keep guests returning to the hotel, whereby each time a guest stays, he or she points. These programs are referred to as ____ programs.
Loyalty
Which department's goal is to generate interest in a hotel's product and create leads or prospects for cultivation by the sales team?
Marketing
Hotels utilize a highly complex and ever-changing strategy referred to as revenue management, which blends which following elements to maximize revenues?
Marketing information, operations results, competitors' rates
The director of sales and marketing at the Indigo Inn made the following comments. Which comment is NOT true?
Marketing is the strategy of meeting needs in an opportunistic, individual method, driven by human interaction
Which of the following statements is true about marketing?
Marketing is the systematic planning, implementation, and control of business activities to promote, distribute, and price products or services
Different hotels use different approaches to may out their ideal budget. One method uses the objectives in the marketing plan to determine the marketing budget. The budget is developed by estimating the expenditures needed to achieve the desired marketing objectives. This method, which is often considered the most effective, is referred to as the
Marketing plan objectives method
Which of the following sales and marketing statements is true?
Marketing responsibilities include market analysis, building brands, and developing distribution channels
The 350-rooms St. Julien Hotel, in Boulder, Colorado, hosts the annual Ski Fest during the second week of January. The three-day-weekend event attracts an abundance of guests who will stay all weekend. If it booked Saturday-only rooms. It will lose revenue when those go unused on Friday or Sunday. Facing such a situation, the St. Julien requires guest to make reservations for a three-night minimum. Such a restriction is referred to as a(n) _____.
Minimum length os stay
Most business travelers rent rooms during which nights of the week?
Monday to Friday
Which of the following statements is NOT true about marketing plans?
Most marketing plans do not contain a budget or financial projections
Effective hotel marketing begins with the development of a marketing plan, which is simply a list of activities designed to meet the sales goals of the hotel. Which of the following is NOT included in the marketing plan?
Names of the top ten business accounts and the top ten leisure accounts
The ratio of guest rooms sold to the number of guest rooms available for sale in a given period, expressed as a percentage, is called _____.
Occupancy rate
The ratio of guest rooms sold to the number of guest rooms available for sale in a given time period, expressed as a percentage, is called the ____.
Occupancy rate
Which of the following refers to a situation in which a hotel sells more guest reservations than it has rooms available, assuming that some guests will cancel or fall to show up?
Overbooking
A _____ report monitors whether a hotel is selling rooms at a rate that will allow it to achieve its goals. The report is designed to give the reader a quick snapshot of how the current rooms revenue numbers compare to the previous years' revenue numbers. What is the name of the report?
Pace report
According to the assigned reading, how are most group sales managers compensated?
Partially with a salary and partially in commission pay based on hitting their room night quota
The sales and marketing department at the Holey Moley Motel studies its consumers' attitudes, values, interests, opinions, and the link to create detailed customer profiles of various markets. This research is called ____.
Psychographics
Which of the following terms is defined as a sales goal to be met, such as "sell 3,000 rooms at $100/night between June 1 and August 30."
Quota
Hotels refer to their highest rate as the _____ rate.
Rack
Jadah Barra, GM of the StaCation Hotel, made it clear to the sales and marketing department: "It is critical for the team to continually evaluate all promotions, advertising, and public-relations investments to ensure that each is returning a profit." This approach is referred to as what?
Return on investment
Which of the following terms refers to the average revenue generated by each guest room available during a specific time period?
RevPAR
The processes and procedures used to optimize RevPAR are called _____.
Revenue management
Which metric is determined by dividing total room revenue by the number of rooms available to sell?
Revenue per available room (RevPAR)
"Group guests"can be divided into which two broad categories?
SMERFs and MICE
Which of the following phases is the most challenging and exciting of the three sales processes because it involves the give and take of finalizing a complicated deal?
Sale phase
Which of the following terms is defined as a prospective consumer of a hotel product or service?
Sales lead
The revenue manager at the 133-room Big Bluff Bunkhouse Hotel noticed that, based on information from the past several years, there was a trend in the first week of September: It was quite common on Monday, Tuesday, and Wednesday nights for four or five guests to cancel at the last minute or just not show up. Therefore, this year the revenue manager made a decision to accept 138 reservations to ensure filling every guest room. This business approach is referred to as _____.
Selective overbooking
Which term describes a visit in an official capacity to examine a hotel site to determine its suitability for a future group meeting?
Site visit
The Algonquin Hotel reported that last night's occupancy rate was 78% and the ADR was $50. The main competitor, Beacon Street Hotel, reported a 65% occupancy rate with an ADR of $60. What can we conclude from this information?
The Algonquin Hotel has the same RevPAR as the Beacon Street Hotel
The sales and marketing director at the El Bulli Resort was asked about his preferences for marketing budget approaches. He replied, "I prefer a sales percentage budget method because it has a big advantage." What is the big advantage?
The budget automatically increases or decreases along with sales revenue-the budget will never spin out of control and deplete sales revenue
Recent research from the International Association of Conference Centers, the industry's authority on group meetings, determined the most and least important criteria planners use when selecting meeting spaces. According to the study, the top things planners now look for each of the following except ____. Ease of connectivity via Wi-Fi The presence of 24/7 housekeeping attendant and maintenance staff members The presence of an onsite conference-planning manager Conference room design
The presence of 24/7 housekeeping attendant and maintenance staff members
The symbiotic pace report indicates that as of June 15 this year, a hotel has 5,000 rooms booked for the rest of the year. Last year on June 15, the hotel had booked 7,500 rooms. What does this information indicate?
The sales department is behind last year's pace, indicating that demand this year is considerably worse than last year and maybe the prices could be slightly decreased
Individuals, families on vacation, and business travelers (who are not attending a group event) are referred to as _____.
Transient guests
Most hotels focus on hosting two major hotel market classifications. What are they?
Transient individual guests and groups
A study documented that over 75% of millennials prefer to book their hotels via other travel agencies
True
Flexible pricing options include loyalty programs
True
Most U.S. travelers feel that brands should tailor their information based on past preferences
True
Optimizing profits is becoming more challenging due to consumer demand for more choice
True
Parameters used to forecast revenue three months away vs. one month away should look significantly different
True
Predictive analytics is used for forecasting optimum pricing
True
Predictive analytics is used to optimize the best distribution channel and inventory strategy
True
Revenue Management can mean deploying multiple models to maximize accuracy
True
Setting the proper revenue strategy includes understanding the socio-political climate
True
T or F: Room revenue management concepts can also apply to noncom revenue sources such as restaurants, spas, recreation and entertainment
True
T or F: Rooms sold multiplied by ADR divided by available rooms equals RevPAR
True
The future of hotel success depends upon a system which is specific, yet broad
True
Today, Revenue Management is a business imperative
True
Hotels can change their room rates how often?
Weekly, daily, hourly
Revenue managers use potential revenue - the maximum revenue that can be attained under perfect conditions - as the standard against which actual revenues are compared. The term that is synonymous with potential revenue is ____.
Yield
