CHA Revenue Management & Pricing 2 — Questions and Answers
Question 1: Which metric measures the revenue generated per available seat hour in a restaurant?
- RevPASH (Correct answer)
- RevPAR
- ADR
- GOPPAR
Correct answer: RevPASH
RevPASH (Revenue Per Available Seat Hour) is the food-and-beverage equivalent of RevPAR, measuring dining revenue efficiency.
Question 2: A hotel's ADR is $150 and its occupancy is 70%. What is the RevPAR?
- $105 (Correct answer)
- $150
- $214
- $95
Correct answer: $105
RevPAR = ADR × Occupancy Rate = $150 × 0.70 = $105.
Question 3: What is the primary purpose of a hotel's rate fence?
- To segment customers and prevent rate arbitrage between segments (Correct answer)
- To set the maximum rate a hotel can charge
- To limit third-party distribution channels
- To protect rack rates from discounting
Correct 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.
Question 4: Which distribution channel typically yields the highest net revenue for a hotel?
- Direct hotel website (Correct answer)
- Online Travel Agencies (OTAs)
- Global Distribution Systems (GDS)
- Wholesale partners
Correct answer: Direct hotel website
Direct bookings through the hotel's own website carry no commission costs, yielding the highest net revenue per reservation.
Question 5: A hotel experiences a 'compression night' when:
- Demand significantly exceeds supply in the market, allowing aggressive rate increases (Correct answer)
- The property reaches exactly 100% occupancy
- Group blocks compress available transient inventory
- Revenue management software compresses pricing tiers
Correct 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.
Question 6: In revenue management, 'unconstrained demand' refers to:
- The total demand for a hotel if it had unlimited capacity (Correct answer)
- Demand that has no rate restrictions
- Walk-in demand from customers without reservations
- Demand that bypasses rate fences
Correct 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.
Question 7: Which pricing strategy involves setting one inclusive rate for a room regardless of the number of guests?
- Flat rate pricing (Correct answer)
- Per-person pricing
- Tiered occupancy pricing
- Rack rate pricing
Correct 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.
CHA Revenue Management & Pricing 2
Which metric measures the revenue generated per available seat hour in a restaurant?