Revenue Management & Pricing Flashcards

Which metric measures the revenue generated per available seat hour in a restaurant?

Answer: RevPASH

RevPASH (Revenue Per Available Seat Hour) is the food-and-beverage equivalent of RevPAR, measuring dining revenue efficiency.

A hotel's ADR is $150 and its occupancy is 70%. What is the RevPAR?

Answer: $105

RevPAR = ADR × Occupancy Rate = $150 × 0.70 = $105.

What is the primary purpose of a hotel's rate fence?

Answer: To segment customers and prevent rate arbitrage between segments

Rate fences are conditions (advance purchase, non-refundable, Saturday-night stay) that prevent customers from qualifying for rates intended for other segments.

Which distribution channel typically yields the highest net revenue for a hotel?

Answer: Direct hotel website

Direct bookings through the hotel's own website carry no commission costs, yielding the highest net revenue per reservation.

A hotel experiences a 'compression night' when:

Answer: Demand significantly exceeds supply in the market, allowing aggressive rate increases

Compression nights occur when market-wide demand greatly exceeds available supply, giving hotels pricing power to push rates higher.

In revenue management, 'unconstrained demand' refers to:

Answer: The total demand for a hotel if it had unlimited capacity

Unconstrained demand is a forecast of how many rooms would sell if the hotel had infinite inventory, used to evaluate true demand levels.

Which pricing strategy involves setting one inclusive rate for a room regardless of the number of guests?

Answer: Flat rate pricing

Flat rate pricing charges a single room rate regardless of occupancy count, simplifying billing and often preferred in North American markets.