Revenue Management Concepts/Basics – Train the Trainer Final Exam

Congratulations on completing the training course!

This final exam will measure your understanding and application of the concepts taught in the course.

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Fill in the blanks with the meaning of the acronym.

YOY

ADR

CPOR

TRevPAR

OTB

ALOS

OTA

PMS

CTA

ARG

GOPPAR

GDS

DOW

CRS

LOS

MinLOS or MLOS

RevPAR

BE

BAR

BFR

Fill in the blanks with an alternate term.

Best Available Rate

Market Share

Off-Peak

Definitions

Choose the term which matches the definition from the list below.

Actualized Revenue	Cost of Acquisition	Inventory/Capacity	PMS
ADR	CPOR	Length of Stay	Qualified Rate
Allotment	Cutoff date	Margin	Rate Parity
Ancillary Revenue	Demand	Metasearch	Relatively Fixed Capacity
ARG	Digital Marketing	Minimum length of stay	Revenue Management
Average Length of Stay	Displacement Analysis	Occupancy	Strategy Meeting
BAR/BFR	DOW	Off Peak Demand	RevPAR
Booking Engine	External Compression	On the Books	Room Night
Booking window	External Demand	Opaque	Target Market
Channel	Fenced Rate	OTA	Time Variable Demand
Channel Management	GDS	Pace	Transient
Commission	GOPPAR	Peak demand	Unconstrained demand
Consortia	Internal Compression	Perishable	Upsell

A percentage that a hotel pays to a third party in exchange for bookings.

A style of marketing which uses primarily online resources to market the hotel and its various offerings.

A travel agency association which allows independent travel agencies to benefit from the ability to purchase in greater volume and take advantage of marketing opportunities.

Any guest who is traveling unassociated to a group or company.

A type of inventory that is time-sensitive and cannot be sold more than once.

An equalizing metric that balances Occupancy with ADR to determine how effectively a hotel balanced these goals to result in the highest revenue.

The rooms already reserved on current or future dates.

A restriction which requires potential guests to stay multiple nights.

A strategy to ensure rates are displayed at the same price on all channels.

A regular meeting with all members of management who are involved in some way with revenue performance of the hotel.

The rate at which guest stays are being booked in the future, especially as compared to the same booking and stay periods from the prior year.

The term for a type of commission that is deducted from a booking’s revenue before the reservation is delivered to the hotel.

The date on which a hotel and group meeting planner mutually agree that any remaining inventory in a Group Block will be released and made available in general inventory.

The management of systems and channels used by hotels. This includes updating hotel information, room inventory and rates in each distribution channel.

When something market-related is causing higher demand, which can affect the ability to increase revenues in a positive manner.

Systems widely used by travel agents to view real-time availability.

A term used to define how long a guest is staying, typically used for room reservations.

An internet company that creates agreements with various hotels or brands to distribute inventory to guests online.

A membership or affiliation giving special consideration for a rate offer or type of business. Evidence of the affiliation is typically requested at check-in and most often consists of a special ID.

A term used to refer to a group of rooms made available to a channel or third party for sale, with a limitation.

The area of a website in which a specialized technology, provided by either the PMS or CRS provider, allows potential guests to see real-time availability for the hotel and confirm a future stay.

Marketing costs, margins, commissions, or other distribution costs directly related to capturing guests’ reservations.

Time periods during which a hotel experiences much lower than usual demand, resulting in low occupancies and less ability to increase rates.

Limited visibility by the traveler as to which hotel they will stay at when reserving a room. Only after the booking is confirmed as non-refundable will the guest be informed of the actual hotel reserved.

The period of time prior to a particular stay date during which the majority of guests create reservations.

A measure of the average duration of stay across all customers and segments, calculated by dividing total reservations by total nights.

The primary base rate on which there are typically no restrictions and from which most other rates or offers are derived.

A measure of the average revenue spent in all areas of the hotel per registered guest, calculated by dividing total revenue by total guests.

A calculation to find the total of the variable expenses related to occupying a room, such as utilities, cleaning service, complimentary breakfast, other amenities, etc.

A hospitality industry metric that measures the relationship between revenue and expenses, providing a better picture of a hotel’s financial health.

A common shorthand definition to refer to day of the week.

A rate that is restricted by the application of a prepayment requirement, stricter than usual cancellation terms, a minimum length of stay, or others.

When something non-market related affects availability.

An online search engine that “scrapes” or quickly views a multitude of booking websites to return multiple pricing options to potential guests.

Technology or computer program used to create reservations, manage inventory and manage the hotel’s daily operations.

Occupying a room across multiple dates. For example, a guest may use one room for three nights, resulting in three room nights, despite only involving one room.

When a staff member offers a higher-priced room type or rate offer to a customer who initially booked one room type or rate offer.

Demand which varies by season, DOW, time of day, or other measurements of time.

The right product and the right price at the right time.

A measurement of how many potential buyers want to purchase a good or service at any given price.

Various methods by which a customer might reserve a room. Examples: on the hotel’s website, calling the hotel, through an OTA or other third party such as Expedia, Booking.com, and many more.

Additional revenue spent over and above room revenue in any other department, such as a restaurant, gift shop, spa or activities.

The percentage of rooms or room nights within a hotel’s overall inventory that were booked or reserved across a particular time period.

Time periods during which a hotel experiences much higher than usual demand, resulting in compression and/or displacement.

A segment or demographic of ideal customers of a hotel, restaurant or spa, around which marketing is typically designed for maximum effectiveness.

The entire amount of demand for a hotel in a given time frame, unlimited by the amount of demand the hotel can physically accommodate.

A measure of the average rate paid for rooms sold, calculated by dividing room revenue by rooms or room nights sold.

The set number of rooms in a hotel.

Calculations

Complete the calculations by selecting from the dropdowns.

Average Revenue per Guest

Item

Operation

Item

RevPAR

Item

Operation

Item

RevPAR (alternate option)

Item

Operation

Item

ADR

Item

Operation

Item

TRevPAR

Item

Operation

Item

GOPPAR

Item

Operation

Item

BONUS QUESTIONS

Write out the formula for Total Customer Value.

Write out the formula for Net Rate.

Essay Questions

Answer the following essay questions.

1. Describe how economics impacts revenue management.

2. Describe how to create a comp set. Include at least 3 criteria for selecting competitors.

3. List at least 4 items that could act as “fences” for a promotional or discounted rate.

4. Explain metasearch and list 2 metasearch sites.

5. List at least 3 examples of market segments and describe them.

6. When a 1% change to your BAR pricing in a standard market results in as much as a 4% shift in occupancy demand, what kind of demand is this in economist terms?

7. Explain 3 steps in determining your Optimal Channel Mix.

8. What are at least 4 examples of upselling/cross-selling? Describe the timing of each example (when it would be offered)

9. Describe in detail at least 3 ways of motivating the team in Upselling.

10. Answer the following: What is overselling? Why oversell? What is the goal of overbooking?

11. Answer the following: Why is packaging a valid strategy? How can packaging be used as an SEO strategy? Explain how packaging works, including one rule of packaging.

12. Explain unconstrained demand: what it is, what it accomplishes, and an example on how to calculate it.

13. What are two examples of Base Business? What is a potential positive outcome of having Base Business?

14. List 3 benefits to forecasting.

Congratulations on completing the training course!

Fill in the blanks

Definitions

Calculations

Essay Questions

Multiple Choice