Practice Test GeeksHospitality and Tourism Practice Test
← All HOSPITALITY Flashcard Decks

Revenue Management Flashcards

6 cards from real HOSPITALITY practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Revenue Management flashcards as text

  1. What is RevPAR in hotel revenue management?

    Answer: Revenue Per Available Room

    RevPAR (Revenue Per Available Room) is calculated by multiplying the average daily rate (ADR) by the occupancy rate, or by dividing total room revenue by the number of available rooms. It is the primary KPI used to measure hotel performance.

  2. Which pricing strategy involves adjusting room rates based on demand, time of booking, and market conditions?

    Answer: Dynamic pricing

    Dynamic pricing (also called yield management) adjusts rates in real time based on demand levels, booking lead time, competitor rates, and local events. It helps hotels maximize revenue during high-demand periods and stimulate bookings during slow periods.

  3. What does ADR stand for in hotel operations?

    Answer: Average Daily Rate

    ADR (Average Daily Rate) is calculated by dividing total room revenue by the number of rooms sold (occupied rooms). Unlike RevPAR, ADR excludes unsold rooms, making it a measure of pure pricing performance.

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

    Answer: The period between reservation and arrival date

    The booking window (or lead time) is the number of days between when a reservation is made and the actual arrival date. Revenue managers analyze booking windows to understand demand patterns and adjust pricing strategies accordingly.

  5. Which distribution channel typically charges hotels the highest commission fee?

    Answer: Online Travel Agencies (OTAs)

    Online Travel Agencies (OTAs) such as Booking.com and Expedia typically charge hotels commission fees of 15-30% per booking. Hotels prefer direct bookings because they carry no commission, improving net revenue per reservation.

  6. What is overbooking in the context of hotel revenue management?

    Answer: Accepting more reservations than available rooms to offset expected cancellations

    Overbooking is the deliberate practice of accepting more reservations than the hotel has rooms available, based on historical cancellation and no-show rates. When managed correctly, it maximizes occupancy and revenue; when misjudged, it results in 'walking' guests to other hotels.