Profitability/Efficiency Metrics: Hotel Room Occupancy Optimization

Question 1

floor rate

Answer 1

• The minimal price of a room, based on accounting breakeven -
  its share of fixed costs plus variable cost.

Question 2

occupancy rates

Answer 2

• The percentage of rooms in a hotel that are booked

by paying customers on a given night

Question 3

Online Travel Agencies (OTAs)

Answer 3

• Companies that acts as intermediaries and sell airline tickets or hotel rooms from multiple suppliers.

Question 4

opaque inventory market

Answer 4

• A market, such as the market for hotel rooms,

where opaque pricing is offered.

Question 5

opaque pricing -

Answer 5

The practice of offering hotel rooms for (non-refundable)

sale in a given city without disclosing until after the sale what hotel is meant.

Question 6

promotional rate

Answer 6

• A rate between the rack rate and floor rate, typically

o”ered to repeat customers on a limited-time basis.

Question 7

rack price -

Answer 7

The official, list price of a hotel room.

Question 8

sunk cost -

Answer 8

Money already spent - such as the cost of an empty hotel room
even absent the variable costs of occupancy

Question 9

variable pricing

Answer 9

• The practice of charging more or less for the same good

or service depending upon current supply and demand.