Planning and Evaluating Operations

Question 1

Average Daily Rate

Answer 1

An occupancy ratio derived by dividing net rooms revenue by the number of rooms sold.

Question 2

Average Rate Per Guest

Answer 2

An occupancy ratio derived by dividing net rooms revenue by the number of guests.

Question 3

Competitive Set

Answer 3

The group of hotels in a market that provide the most important competition for a hotel

Question 4

Daily Operations Report

Answer 4

A report that summarizes the hotel’s financial activities during a 24-hour period and provides insight into revenues, receivable, operating statistics, and cash transactions related to the front office; also known as the manager’s report.

Question 5

What is Forecasting?

Answer 5

The process of predicting events and trends in business; typical forecasting for the rooms division includes room availability and occupancy.

Question 6

House Count

Answer 6

The forecasted or expected number of guests for a particular period, sometimes broken down into group and non-group business.

Question 7

Hubbart Formula

Answer 7

A bottom-up approach to pricing rooms; in determining the average price per room, this approach stars at net income then considers taxes, costs, and expected rooms sold to then determine ADR.

Question 8

Income Statement

Answer 8

A financial statement that provides important information about the results of hotel operations for a given period of time.

Question 9

Market Condition Approach (as it relates to pricing)

Answer 9

An approach to pricing that bases prices on what comparable hotels in the hotel’s competitive set are charging for a similar product.

Question 10

Multiple Occupancy Percentage

Answer 10

The number of rooms occupied by more than one guest divided by the number of rooms occupied by guests.

Question 11

Multiple Occupancy Ratio

Answer 11

A measurement used to forecast food and beverage revenue, indicate clean linen requirements, and analyze daily revenue rate; derived from the multiple occupancy percentage or by determining the average number of guests per rooms sold; also called the double occupancy percentage.

Question 12

Operating Ratios

Answer 12

A group of ratios that assist in the analysis of hospitality operations.

Question 13

Overstay

Answer 13

A guest who stays after his or her stated departure date.

Question 14

Rack Rate

Answer 14

The standard rate the property established for a particular category of rooms.

Question 15

Revenue Per Available Customer (RevPAC)

Answer 15

A revenue management measurement that focuses on revenue per actual guest.

Question 16

Revenue Per Available Room (RevPAR)

Answer 16

A revenue management measurement that focuses on revenue per available room.

Question 17

Room Rate Variance Report

Answer 17

A report listing rooms that have not been sold at rack rates.

Question 18

Rule-Of-Thumb Approach

Answer 18

A cost approach to pricing rooms in which the room rate is set at $1 for each $1,000 of construction and furnishings cost per room, assuming an occupancy of 70%.

Question 19

Stayover

Answer 19

A room status term indicating that the guest is not checking out today and will remain at least one more night; a guest who continues to occupy a room from the time of arrival to the stated date of departure.

Question 20

Understay

Answer 20

A guest who checks out before his or her stated departure date.

Question 21

Yield Statistic

Answer 21

The ratio of actual rooms revenue to potential rooms revenue.