CRME Certified Revenue Management Executive Study guides, Class notes & Summaries

What is bigger in the tourism industry, fixed costs or variable costs? - ANSWER-fixed costs are bigger -Think of an airplane: staffing, airport fees (fixed) - huge amount of the costs for airplanes come from fixed costs; food, fuel (variable) - not as easy to determine the variable costs We can reduce prices (even below total cost per room), as long as the reduced price covers, fixed cost per room or variable cost per room? - ANSWER-We can reduce prices as long as the reduced price covers t...

Revenue - ANSWER-The total amount of sales achieved in a specified time period Revenue is calculate as: - ANSWER-Number of Units Sold x Unit Price Effective managers of an organization's revenues MUST do three things - ANSWER-1. Understand the importance of revenue management 2. Understand the many complex factors that influence revenue management strategy and tactics 3. Become better at making revenue management decisions than their competitors Proft Formula - ANSWER-Revenue - Exp...

Room night - ANSWER-The single night's use of a guest room. For example, one room sold for three consecutive nights yields three room nights. RMs are forced to implement one of three income-management alternatives when demand for their products is high - ANSWER-1.Establish one fixed price, then sell to customers on a first-come-first-served basis until they have exhausted their supply of products. 2.Allocate the limited supply to selected customers who meet established criteria (i.e., they...

Pace of build refers to: a) How quickly new hotel rooms and new hotels are being added to a comp set's total supply b)The rate at which reservations are being made for a future date c)How quickly the demand for substitute products is reducing demand for hotel rooms d)The speed with which currency exchange rates are rising in a given market - ANSWER-b: The rate at which reservations are being made for a future date Denial reports from reservations show us how much more business we could...

4 P's that ensure you have an accurate competitive set - ANSWER-1) Product (number of rooms, open date, hotel type, meeting space, amenities) 2) Proximity (distance, market and tract, location) 3) Pricing (scale, class) 4) Participation (monthly, daily, segmentation, additional revenue) You are the hotel manager of a 624 room full-service hotel in Minneapolis. In order to determine future price position it is imperative that you understand the break-even point and profitability of e...

Chapter 6 - ANSWER- Donna is a hotel revenue manager preparing next year's rooms forecast. Donna knows that in November of next year a new hotel is opening near her own. As a result, she is considering reducing her rooms forecast for that month. If she does so, what data type will she be primarily using to make her decision? - ANSWER-Future data Donna is a hotel revenue manager. Donna knows that for tonight she has sold 175 of her 200 available rooms. As a result, is eliminating room disc...

ADR - ANSWER-Actual room revenue / total rooms sold ADR index - ANSWER-A measure of one hotel's performance based on a comp set. Amortization - ANSWER-An accounting term that refers to the process of allocating the cost of an asset Ancillary revenue - ANSWER-A client's commitment to pay for a certain number of rooms for a group booking. Ex: Wedding is booked for 100 rms and the family agrees to 80% attrition effectively paying for 80 rms if the wedding falls through. Cancellation C...

What is the term to describe the average revenue generated by each available guest room during a specific period of time? - ANSWER-RevPAR What is the industry term used to describe the sum of prices paid by a business's customers? - ANSWER-Total revenues Historically, what concept have hospitality managers chiefly used to calculate their selling prices? - ANSWER-Costs What is the name for the net value achieved by both parties in a business transaction? - ANSWER-Profit What is the f...

Revenue Management Final Exam and Answers. What is the industry term used to describe the sum of prices paid by a business's customers? - Answer Total Revenues Historically, what concept have hospitality managers chiefly used to calculate their selling prices? - Answer Costs What is an algebraic equivalent of the formula: Sales = Costs + Profit? - Answer Profit = Sales - Costs What is the name for the net value achieved by both parties in a business transaction? - Answer Profit What e...

What is the industry term used to describe the sum of prices paid by a business's customers? - ANSWER - Total Revenues Historically, what concept have hospitality managers chiefly used to calculate their selling prices? - ANSWER - Costs What is an algebraic equivalent of the formula: Sales = Costs + Profit? - ANSWER - Profit = Sales - Costs What is the name for the net value achieved by both parties in a business transaction? - ANSWER - Profit What element is not present in a ba...