Revenue Management & Pricing Flashcards

What is 'channel contribution margin' used to evaluate?

Answer: The net profit generated by each distribution channel after subtracting acquisition costs

Channel contribution margin subtracts distribution costs from channel revenue to reveal which channels actually deliver the most profitable bookings.

A hotel's 'rack rate' is best described as:

Answer: The published, undiscounted standard room rate before any promotions or negotiations

The rack rate is the hotel's official list price for a room type, from which all discounts, packages, and negotiated rates are derived.

Which revenue management KPI specifically measures meeting and event space efficiency?

Answer: Revenue per available square foot (RevPAS)

RevPAS (Revenue Per Available Square Foot) measures how efficiently a hotel monetizes its meeting and function space inventory.

A hotel implementing 'dynamic pricing' adjusts rates based on:

Answer: Real-time changes in demand, competitive rates, and booking pace

Dynamic pricing continuously adjusts rates in response to current market conditions, demand signals, and competitive positioning.

The 'booking window' in hotel revenue management refers to:

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

The booking window (or lead time) is the number of days in advance that a reservation is made prior to the stay date, used to analyze booking pace.

What does a 'pickup report' in revenue management track?

Answer: New reservations made during a specific period for a future date, compared to prior periods

A pickup report shows how many new bookings were added for a future date during a given window, helping forecast final occupancy.

Which strategy involves a hotel matching a competitor's rate exactly to maintain market position?

Answer: Competitive rate parity

Competitive rate parity means pricing rooms at the same level as key competitors to avoid losing bookings to price-sensitive travelers.