CGM Financial Management & Budgeting 2

Question 1

A 200-room hotel sold 150 rooms last night for total room revenue of $22,500. What was its RevPAR?

Accepted Answer

$112.50

Answer

RevPAR equals room revenue divided by rooms available: $22,500 / 200 = $112.50.

Question 2

What is the primary purpose of the Uniform System of Accounts for the Lodging Industry (USALI)?

Accepted Answer

To standardize financial statement formats so properties can be compared

Answer

USALI provides a standardized chart of accounts and statement layout that allows benchmarking across hotels.

Question 3

Total revenue rose $100,000 over last year while gross operating profit rose $45,000. What is the flow-through?

Accepted Answer

45%

Answer

Flow-through is the change in GOP divided by the change in revenue: $45,000 / $100,000 = 45%.

Question 4

Hotel management agreements and lenders commonly require an FF&E reserve funded at roughly what percentage of total revenue?

Accepted Answer

4%

Answer

An FF&E reserve of about 4% of total revenue is the industry norm in management and loan agreements.

Question 5

Which of the following is a fixed cost for a hotel regardless of occupancy?

Accepted Answer

Property insurance premiums

Answer

Insurance premiums stay the same no matter how many rooms are sold, so they are fixed.

CGM - Certified General Manager Practice Test