Revenue Management Exam 2 Solved 100%

Predictive analytics is used to optimize the best distribution channel and inventory strategy - ANSWER True Revenue and profit margins are under attack due to: Changing consumer behavior Disruptive new businesses ...

Predictive analytics is used to optimize the best distribution channel and inventory strategy - ANSWER True Revenue and profit margins are under attack due to: Changing consumer behavior Disruptive new businesses Internal inefficiencies - ANSWER 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 - ANSWER All of the above Most U.S. travelers feel that brands should tailor their information based on past preferences - ANSWER True Parameters used to forecast revenue three months away vs. one month away should look significantly different - ANSWER True Flexible pricing options include loyalty programs - ANSWER True Revenue Management can mean deploying multiple models to maximize accuracy - ANSWER True Digital transformation includes: Adopting the cloud Using Artificial Intelligence Machine Learning - ANSWER All of the above Optimizing revenue across all channels means setting holistic goals - ANSWER False Predictive analytics is used for forecasting optimum pricing - ANSWER True A study documented that over 75% of millennials prefer to book their hotels via other travel agencies - ANSWER True Revenue managers should not need to set clear rules for each market segment - ANSWER False Optimizing profits is becoming more challenging due to consumer demand for more choice - ANSWER True Revenue Management does not involve corporate-negotiated prices - ANSWER False The future of hotel success depends upon a system which is specific, yet broad - ANSWER True Today's revenue managers are only responsible for optimizing occupancy and ADR - ANSWER False A revenue management strategy based only on price optimization is the best method - ANSWER False Setting the proper revenue strategy includes understanding the socio-political climate - ANSWER True Today, Revenue Management is a business imperative - ANSWER True Hotels benefiting from revenue management systems include: Properties having many rooms Properties having many different types of room Properties having many different locations - ANSWER All of the above Revenue management approaches use a popular principle called demand-based pricing; as demand increases, _____ - rate categories are opened up - ANSWER Higher 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 - ANSWER Competitive set T or F: RevPAR = rooms available x ADR / sold rooms - ANSWER False 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? - ANSWER Demographics Hotels utilize a highly complex and ever-changing strategy referred to as revenue management, which blends which following elements to maximize revenues? - ANSWER Marketing information, operations results, competitors' rates 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? - ANSWER $81.11 T or F: Rooms sold multiplied by ADR divided by available rooms equals RevPAR - ANSWER True T or F: Room revenue management concepts can also apply to noncom revenue sources such as restaurants, spas, recreation and entertainment - ANSWER True The revenue manager typically reports to the _____. - ANSWER General manager 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? - ANSWER $10,000 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. - ANSWER Loyalty The use of computer algorithms to set room prices over time for various market segments (business, leisure, individual, group, etc.) is called ____ pricing. - ANSWER Dynamic 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? - ANSWER The Algonquin Hotel has the same RevPAR as the Beacon Street Hotel Hotels can change their room rates how often? - ANSWER Weekly, daily, hourly Which metric is determined by dividing total room revenue by the number of rooms available to sell? - ANSWER Revenue per available room (RevPAR) 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 _____. - ANSWER Occupancy rate 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? - ANSWER Demand 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? - ANSWER $80 Which of the following revenue-management axioms is true? - ANSWER As demand increases, lower-rate categories are closed and higher-rate categories (aka tiers) are quoted 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? - ANSWER 50% The group of properties a hotel directly competes with is referred to as its - ANSWER Competitive set 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? - ANSWER Behavioral/lifestyle Which of the following refers to high-yield consumer segments who are provided special privileges, perks, and attention? - ANSWER Loyal guests Which of the following managers are NOT part of the revenue management team? Front office manager General manager Human-resources manager Sales manager - ANSWER Human-resources manager 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 - ANSWER All of the above 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 - ANSWER Marketing plan objectives method 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 _____. - ANSWER Selective overbooking Which market segment is most likely to spend nights at The Downtowner Hotel (located in the heart of the city) Monday through Friday? - ANSWER Business individuals and groups 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 ____. - ANSWER Yield The processes and procedures used to optimize RevPAR are called _____. - ANSWER Revenue management