Exam 1 Flashcards
revenue management
helps us sell the right product at the right moment at the right price
Basic Elements of RM
Historical data, forecasts, price management tools, pricing policies, overall strategy
factors in setting price
production costs, market, competition, demand, product positioning
factors that affect availability
reservation terms, rates, guarantee rules, pre-payments, categories, groups, overbooking, waiting lists, peaks and valleys in planning
factors impacting elasticity
luxury/necessity, substitutes/compliments, time, price
inelastic
<1, not sensitive to price
case of high demand
close/restrict discounts, reduce late check out, increase rates
perfectly inelastic
quantity demanded/supplied remains same
case of low demand
lower prices, offer packages, incentivize upgrades
market pentration
attract customers with low prices then raise them
price skimming
high initial prices then lowers due to competition
economy
certain product get lower prices
competitive
copys competitors prices for similar products
bundle
bundles items for lower price if they were sold separately
experimental consumption dimensions
cognitive involvement, social involvement, peripheral perception, emotional involvement
cognitive involvement
doing things that make me think I’m part of the story
social involvement
shows and rides that enable me to understand different cultures
peripheral perception
enjoying variety of smells and sights around the park
emotional involvement
feeling like a kid again; emotions you dont feel everyday
perishable inventory
strive to minimize unsold tickets
cost structure
high fixed costs low variable costs
variable but predictable demand
seasonal operations
segmentable market
customers willing to pay different prices at different times
capability limit
charge premium prices to time sensitive market
minimum efficient scale
balance between demand, production volume, and costs
variable costs
labor and noncapital costs, electricity, supplies
fixed costs
rides, facilities, buildings, equipment
cost-based
product - cost-price-value-customers
value based
customers -value-price-cost-product
restaurant trends during covid
those with high off-premise sales are doing better
off-premise
liquor consumed off site (liquor stores, grocery stores)
on premise
liquor to be consumed on site (bars, hotels, casinos)
product formula
cost/% = selling price
product cost plus
product cost plus # of additional related factors
contribution margin
selling price-product cost
factors affecting value perceptions
competition, service levels, guest type, image, product quality
revenue centers
business section that contributes to operations total income
day parts
any definable time period that is of interest to a revenue manager i.e. meal period
day part contribution %
day part sales/total rev
rev center contribution
sales/total rev
service styles
drive through, carry out, curbside pickup
rev per available seat hour (RevPASH)
total rev/available seat hours
seat utilization % * check average
seat utilization %
guests served/actual seats
check average
total rev/guests served
restaurant RM strategies
establish baseline, understand drivers, develop RM strat, implement strat, monitor outcome
gambling
playing for money
gambling guest
white collar, entertainment experience, younger, willing to spend more
motives for gambling
learning, pleasure, adventure, relaxation, socialization, prestige, benefits
4 casinos with AAA
bellagio, skylofts at MGM, venetian, Wynn
china gambling market
49 casinos in Macau, baccarat, only 5 % is slots
first development phase
casino serving local market
second phase
increased comp from other locations
third phase
entertainment convergence
2 objectives
extend stay for onsite guests; broaden appeal to increase potential market
casino ops
proper staffing, casino cage
