Htm 4250 Midterm Flashcards

1
Q

7 characteristics of industries where RM is applicable

A
  1. Versioning Opportunity
  2. Variable Demand
  3. Fixed Capacity
  4. Perishable Service
  5. Low Variable Costs
  6. High Fixed Costs
  7. Advance
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2
Q

ADR is not a measure of

A

Profitability or variability

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3
Q

When RevPAR is increasing, price and capacity tools are

A

Being used well

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4
Q

When RevPAR is decreasing, price and capacity tools are

A

Not working so well

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5
Q

Total RevPAR

A

Average total room generated by each available, but not necessarily occupied room

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6
Q

RevPOR is based on

A

Based on occupied rooms, not rooms available

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7
Q

CPOR

A

Room related costs incurred directly as a result of selling a guest room, variable cost per room

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8
Q

GOP

A

Total revenue less management-controllable operating expenses

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9
Q

Flow Through

A

Measure of change in profit due to change in revenue

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10
Q

Occupancy strength and weakness

A

S: Easy to compute
W: Does not consider ADR

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11
Q

ADR strength and weakness

A

S: Easy to compute
W: Does not consider occupancy

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12
Q

RevPAR strength and weakness

A

S: Easy to compute
W: Does not consider nonroom revenue or profitability

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13
Q

RevPOR strength and weakness

A

S: Considers all hotel revenue generated
W: Does not consider the number of rooms sold or profitability

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14
Q

Total RevPAR strength and weakness

A

S: Considers all hotel revenue generated
W: Does not consider profitability

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15
Q

GOPPAR strength and weakness

A

S: Assess profitability of room sales effort
W: Results depended on non-RM efforts

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16
Q

Flow through strength and weakness

A

S: Assesses profitability of incremental revenues
W: Results dependent on non-RM efforts; data may bot be readily accessible

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17
Q

Accurate forecasts are important for:

A
  1. Scheduling workers
  2. Purchasing supplies
  3. Managing cash flow
  4. Modifying the price
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18
Q

Three types of data to forecast with:

A
  1. Historical
  2. Current
  3. Future
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19
Q

Fixed average

A

The average within a specific and unchanged time period

20
Q

Rolling average

A

The average amount of sales revenue, rooms sold, or other data over the changing time period

21
Q

Average ADR does not =

A

Classic average formula because rooms sold are different

22
Q

Trailing Period

A

A data collection method that discards the oldest piece of data when the newest data is added

23
Q

Rms pricing strategies

A
  1. Reduction in average rate
  2. Increase in average rate in response to high demand
  3. Increase in average rate in times of average or low demand
24
Q

Two-tiered price

A

A pricing strategy in which the buyer must pay a price for the ability to make additional purchases

25
Q

Value =

A

Perceived benefit - Price

26
Q

Cost-based pricing

A

A pricing philosophy that involves summing product (or service) costs incurred, with a desired profit, to arrive at an item’s selling price

27
Q

The four I’s of service

A
  1. Intangibility
  2. Inconsistency
  3. Inseparability
  4. Inventory
28
Q

Value-based pricing

A

The practice of establishing prices for a firm’s products and services based primarily on the buyer’s perceived value of those products and services

29
Q

Differential Pricing

A

The practice of seller charging different prices to different buyers for the same product or slightly different versions of the same product

30
Q

Inventory Management

A

The process of allocating and modifying the number of products available for sale at various prices and through various distribution channels

31
Q

Consumer Surplus

A

The difference between the amount a buyer would be willing to pay for a product or service and the amount they are charged

32
Q

Value-Based Pricing

A

The practice of establishing prices for a firm’s products and services based primarily on the buyer’s perceived value of those products and services

33
Q

Cannibalization

A

The practice of taking advantage of discounted rates where ‘high willingness buyers’ masquerade as ‘low willingness buyers’ to avoid paying higher prices

34
Q

Arbitrage

A

The nearly simultaneous purchase of a product at a low price and reselling at a higher price to make a profit

35
Q

Displacement Analysis Process

A
  1. Establish the net room revenue differential
  2. Establish the net food and beverage revenue differential
  3. Determine other net revenue
  4. Summarize the determine the net differential
36
Q

Market Segmentation (2)

A
  1. Price Sensitive
  2. Price Insensitive
37
Q

Forecasting (2)

A
  1. Demand
  2. No shows/cancellations
38
Q

Optimization (3)

A
  1. Selling price
  2. Inventory allocation
  3. Revenue
39
Q

Versioning opportunity

A

Clear differentiation between market segments, so multiple versions of the product can be offered

40
Q

Variable demand

A

Peaks in valleys in demand, and can be predicted, but not with a high degree of certainty

41
Q

Fixed capacity

A

Expensive or impractical to add or subtract supply in the short run, but some ability to temporarily shift it

42
Q

Perishable service

A

There is a time dimension to the provision of the service. Once that time has passed, the inventory loses all value

43
Q

Low variable cost

A

The cost of selling an additional unit of the existing capacity is low relative to the price of the service

44
Q

High fixed costs

A

There is a high amount of cost associated with each unit of sale that must be paid regardless of sales

45
Q
A