Revenue Management & Pricing Strategy Flashcards

What is the purpose of a hotel's 'demand calendar' or 'demand forecast' in revenue management?

Answer: To anticipate future occupancy levels and adjust pricing strategy proactively

A demand forecast uses historical data, booking pace, and market intelligence to predict future occupancy, enabling proactive rate and inventory decisions.

Which metric measures the percentage of total available room nights that were actually sold during a given period?

Answer: Occupancy Rate

Occupancy Rate = Rooms Sold ÷ Rooms Available × 100, and it directly measures how efficiently a hotel fills its inventory.

A hotel revenue manager notices booking pace is running 20% ahead of the same period last year. What is the BEST response?

Answer: Increase rates and tighten restrictions to maximize revenue on remaining inventory

Strong booking pace signals high demand; the optimal response is to raise rates and impose restrictions (MinLOS, closed to arrivals) to protect remaining high-value inventory.

What is 'ancillary revenue' in the hotel industry?

Answer: Revenue from non-room sources such as F&B, spa, parking, and resort fees

Ancillary revenue encompasses all income streams beyond room sales (spa, dining, parking, meeting space, upsells), which can significantly improve overall profitability.

Which pricing model charges guests a flat fee that includes room, meals, and selected amenities?

Answer: American Plan (AP) / All-Inclusive

The American Plan (full board) and All-Inclusive models bundle room and all (or most) meals and amenities into a single flat rate.

What is the 'booking window' in hotel revenue management?

Answer: The amount of time between when a reservation is made and the actual arrival date

The booking window (lead time) measures how far in advance guests book, which directly influences pricing strategy and inventory availability decisions.