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REVENUE MANAGEMENT FINAL EXAM
PRACTICE QUESTIONS AND ANSWERS
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"What is the minimum number of hotels in a comp set? - CORRECT ANSWER=> 4"
"What is the threshold in the OR, ADR and RevPar indexes that determines the point we are
outperforming the comp set? - CORRECT ANSWER=> 100"
"Price from a marketing standpoint includes both monetary and
________________costs - CORRECT ANSWER=> non monetary"‐
"price - CORRECT ANSWER=> The amount of money charged for a good or service."
"BAR and BRG - CORRECT ANSWER=> The hotel makes a promise that the room prices found on their
website are the best rates compared to any other sites."
"Example of BAR guarantee? - CORRECT ANSWER=> If you found a better rate then you will get that
rate plus some additional discount (within 24 hours of making the reservation) in PA"
"Who requires whom to sign a rate parity agreement? - CORRECT ANSWER=> OTA"
"In what type of rates are the "Last Room Available Agreements" signed? - CORRECT ANSWER=>
Corporate" "Consumer reference prices: what is bigger, the increase in demand derived from reducing a rate by
$100 or the decrease in demand resulting from augmenting a rate by $100? - CORRECT ANSWER=> the
decrease in demand resulting from augmenting a rate by $ -because it is more impactful" "What is more appealing to hotel guests: a discount of $10 in three supplementary products (total savings are $30), or a discount of $30 in just one supplementary product so that it becomes free? -
CORRECT ANSWER=> a discount of $30 in just one supplementary product so that it becomes free
-Discount in just one supplementary product so that it becomes free is more appealing to a guest"
"Rate portfolio - CORRECT ANSWER=> The matrix of available rates by forecasted occupancy"
"What airline ticket is less expensive (in general terms): the Thursday‐
Saturday or the Friday Sunday? -‐ CORRECT ANSWER=> Friday Sunday‐
-80% of the customers for airlines are businesspeople and they want to get that one-day home for weekend" "What type of strategy allows you to: i) create more effective pricing strategies; ii) create demand
forecasts with more accuracy; and iii) optimize the hotel's market mix? - CORRECT ANSWER=> Market
segmentation"
""Values and lifestyles" is a criterion used to segment the market according to - CORRECT ANSWER=>
psychography" "The big three market segments proposed by the AHLA and its Uniform System of Accounts for the
Lodging Industry are: - CORRECT ANSWER=> transient, group and contract"
"Do we use constrained demand to forecast unconstrained demand, or do we use unconstrained
demand to forecast constrained demand? - CORRECT ANSWER=> We use constrained demand (which
is what we have from last year) to forecast the unconstrained demand" "Insights, past, current and future data are the four components of forecasting. In which one do human
beings outperform machines? - CORRECT ANSWER=> insights"
"Stationary vs nonstationary: in which type of series there is an upward or downward trend over time -
CORRECT ANSWER=> nonstationary
-Stationary tends to go to an average value, central point that all the data points are around, can make a line out of it"
"The greater the variance, the more complex the forecast or the simpler the forecast? - CORRECT
ANSWER=> more complex the forecast"
"In a "random walk" (naïve forecasting), the forecasted value for the next period t+1 equals to...? -
CORRECT ANSWER=> the value of the current value t"
"For stationary data, what method is employed? - CORRECT ANSWER=> Moving Average Methods"
"Larger n is used when there is a lot or little variance in past
data? - CORRECT ANSWER=> used when there a lot of variance in past data"
"If there is a pattern / event, then we use larger or smaller n? - CORRECT ANSWER=> smaller n"
"For nonstationary data, what method is employed? - CORRECT ANSWER=> Weighted Moving
Average"
Today is Oct 16th and the corresponding value in the booking curve is 0.60The hotel has 30 OTB reservations
How many reservations should the hotel expect to receive on the arrival day Oct 31st? - CORRECT
ANSWER=> We should expect to receive 30 OTB reservations / 0.60 = 50 reservations by Oct 31"
"new overall reservation forecast = - CORRECT ANSWER=> OTB reservations / value in the booking
curve future = divide" "In condo hotels, is the disparity in quality of rooms higher or lower than in non-condo hotels? -
CORRECT ANSWER=> higher
-because of the owner of the room is an individual"
"upselling - CORRECT ANSWER=> higher quality product at additional price
-Additional products at additional price (room quality and supplementary products)"
"upgrading - CORRECT ANSWER=> higher quality product at the same price, allocated on a space
available basis -The value of the "feeling valued" / "pleasant surprise""
"cross selling - CORRECT ANSWER=> selling additional products or services to an existing customer
-when you add in breakfast, dinner, etc" "In what stage can upselling actions be implemented? At booking? A few days before arrival? At arrival? -
CORRECT ANSWER=> Traditionally at arrival, but now can do more in advance"
"In what sense have the groups been regarded as a "filler" market? - CORRECT ANSWER=> Groups as a
filler market during hotels down time to use it as a filler which is a traditionally view. Now, hotels implemented the group displacement analysis because they realize that groups may not spend as much so they want to see if they should accept them or not -Reason why we do the group displacement analysis"
"Who books first, groups or transient? - CORRECT ANSWER=> Groups book first, can be up to two
years in advance"
"In a group displacement analysis, what do you compare? - CORRECT ANSWER=> The total value of the
transient business that would be displaced if the group business were accepted."
"Extensions of Revenue Management - CORRECT ANSWER=> Catering
Restaurants Entertainment Attractions"
"What does RPASH stand for? - CORRECT ANSWER=> Revenue per Available Seat Hour"
"What is a "dessert room"? - CORRECT ANSWER=> implicates that you will spend more money on
dessert and alcohol, and creates higher turnover because you are making a new table available by moving them to a different room"
"An example of a conflict between market segments? - CORRECT ANSWER=> skiing forbid
snowboarding -because they didn't want the snowboarders to mess up the snow for the skiers they just want to ski and that snowboarders tend to be more aggressive"
"Which two models can we find within the indirect distribution channels? - CORRECT ANSWER=>
Agent model vs Merchant model"
"what is the difference between Agent model vs Merchant model? - CORRECT ANSWER=> Commission
vs margin -Agent model there is the price of the room and there is a 10% commission -Merchant model is the one that buys the room and then sells it for an added margin" "According to the Phocuswright Report (2018), more than half (52%) of all U.S.
travel was booked online or offline? - CORRECT ANSWER=> offline"
"In what types of tourism products is the offline system predominant? - CORRECT ANSWER=> Packages
and Cruises"
"What's the proportion of offline business in these two types of tourism products? - CORRECT
ANSWER=> Two thirds"
"On average, what is the comission OTAs charge to branded and independent
hotels? - CORRECT ANSWER=> From 10% (branded hotels) to 30% (independent hotels)"
"Marriott strongly depends on OTAs: 88% of its bookings come through OTAs.
True or False? - CORRECT ANSWER=> False: it is the other way around."
"Which industry is more fragmented and atomized: the airline or the hotel industry? - CORRECT
ANSWER=> Hotel industry - have 10% of the market share, meaning that the OTAs call the shot because
90% goes to them -whereas airlines have a lot of companies and there is not a dominant one (80% of the market share)"
"Why the tourism distribution system is sometimes called a duopoly? - CORRECT ANSWER=> Expedia
and Priceline"
"What's the new name of Priceline? - CORRECT ANSWER=> Bookings Holding"
Sales manager -Rooms manager ***and sometimes -Food and Beverage management -Marketing -HR management"
"How many internal performance indicators do we have? - CORRECT ANSWER=> 6: OR, ADR, RevPar,
and the percent changes of each of them"
"How many external performance indicators do we have? - CORRECT ANSWER=> 6: OR index, ADR
index, RevPar index, and the percent changes of each of them"
