CHI Revenue & Yield Management 2 — Questions and Answers
Question 1: A hotel has 200 rooms and achieved an occupancy of 75% last night with an ADR of $120. What was the RevPAR?
- $90 (Correct answer)
- $120
- $160
- $75
Correct answer: $90
RevPAR = Occupancy% × ADR = 0.75 × $120 = $90.
Question 2: Which pricing strategy involves setting rates based on what competitors charge rather than on cost or demand?
- Competitor-based pricing (Correct answer)
- Cost-plus pricing
- Value-based pricing
- Penetration pricing
Correct answer: Competitor-based pricing
Competitor-based pricing sets rates by benchmarking against rival properties rather than internal costs or perceived value.
Question 3: A length-of-stay restriction that requires guests to stay a minimum number of nights is called a:
- Minimum length of stay (MLOS) (Correct answer)
- Close to arrival (CTA)
- Stop sell
- Rate fence
Correct answer: Minimum length of stay (MLOS)
MLOS (Minimum Length of Stay) is a restriction requiring guests to book at least a set number of nights.
Question 4: The term 'unconstrained demand' in revenue management refers to:
- The total demand that would exist if no capacity or rate restrictions were in place (Correct answer)
- Demand from guests with no loyalty program membership
- Demand after applying price fences
- Walk-in demand on the day of arrival
Correct answer: The total demand that would exist if no capacity or rate restrictions were in place
Unconstrained demand represents the true market demand if the hotel had unlimited rooms and no pricing barriers.
Question 5: Which distribution channel typically yields the lowest net rate for a hotel after fees?
- Online travel agencies (OTAs) (Correct answer)
- Direct brand website
- Global Distribution Systems (GDS)
- Walk-in reservations
Correct answer: Online travel agencies (OTAs)
OTAs charge commissions of 15–25%, which significantly reduce the net rate the hotel receives compared to direct bookings.
Question 6: A 'shoulder period' in hospitality revenue management refers to:
- Periods between peak and off-peak demand seasons (Correct answer)
- The time between check-in and check-out
- Days with exactly 50% occupancy
- A transition period when rates are renegotiated
Correct answer: Periods between peak and off-peak demand seasons
Shoulder periods are the transitional dates between high-demand peak periods and low-demand off-peak periods.
Question 7: Which metric measures the hotel's room revenue performance relative to a competitive set?
- Revenue Generation Index (RGI) (Correct answer)
- Average Daily Rate (ADR)
- Gross Operating Profit per Available Room (GOPPAR)
- Net RevPAR
Correct answer: Revenue Generation Index (RGI)
RGI (also called RevPAR Index) compares a hotel's RevPAR to the average RevPAR of its competitive set; a score above 100 means outperformance.
CHI Revenue & Yield Management 2
A hotel has 200 rooms and achieved an occupancy of 75% last night with an ADR of $120.
What was the RevPAR?