Revenue Management & Performance Metrics Flashcards

A 200-room hotel sells 150 rooms for total room revenue of $22,500. What is its RevPAR?

Answer: $112.50

RevPAR = room revenue / available rooms = $22,500 / 200 = $112.50.

What does GOPPAR measure?

Answer: Gross operating profit per available room

GOPPAR divides gross operating profit by available rooms, capturing profitability rather than revenue alone.

Which metric divides revenue from all departments (rooms, F&B, spa, etc.) by available rooms?

Answer: TRevPAR

Total RevPAR (TRevPAR) includes all operated-department revenue, not just rooms.

If ADR rises 10% while occupancy falls 10%, what happens to RevPAR?

Answer: It falls about 1%

RevPAR = ADR × occupancy, so 1.10 × 0.90 = 0.99, a 1% decline.

A hotel's RevPAR is $90 and its competitive set's RevPAR is $100. What is its RevPAR Index (RGI)?

Answer: 90

RGI = (hotel RevPAR / comp set RevPAR) × 100 = 90.

A hotel runs 80% occupancy while its comp set runs 75%. What is its Occupancy Index (MPI)?

Answer: 106.7

MPI = (80 / 75) × 100 ≈ 106.7.

A hotel's ADR is $150 and its comp set's ADR is $160. What is its ARI?

Answer: 93.75

ARI = (150 / 160) × 100 = 93.75.

Why would a revenue manager place a minimum length-of-stay (MinLOS) restriction around a peak night?

Answer: To keep one-night peak bookings from blocking longer, higher-value stays

MinLOS stops one-night bookings on the peak night from displacing multi-night stays that also fill the shoulder nights.

What does a Closed to Arrival (CTA) restriction do?

Answer: Blocks new arrivals on that date but allows stays that arrived earlier to continue through it

CTA blocks check-ins on a date while still accepting stays that arrived on earlier dates.

Which forecasting approach projects final occupancy by adding historical average bookings still to come to the rooms already on the books?

Answer: Additive pickup method

The additive pickup method adds the historical average pickup for the remaining days to current on-the-books rooms.

In a displacement analysis for a group request, what is compared?

Answer: The group's total value (rooms plus ancillary, minus costs) versus the transient revenue it would displace

Displacement analysis checks whether the group's net contribution beats the transient business it would push out.

What is unconstrained demand?

Answer: Total demand that would exist if there were no capacity or rate restrictions

Unconstrained demand estimates true market demand, including bookings turned away because of capacity or controls.

An optimal overbooking level is set by balancing which two costs?

Answer: Cost of walking a guest and cost of an unsold (spoiled) room

Overbooking weighs the cost of relocating guests against the lost revenue of empty rooms caused by no-shows and cancellations.

In hotel pricing, what does BAR stand for?

Answer: Best Available Rate

BAR is the lowest unrestricted rate available to the public for a given night.

What does Net RevPAR account for that standard RevPAR does not?

Answer: Distribution costs such as commissions and transaction fees

Net RevPAR subtracts acquisition and distribution costs from room revenue before dividing by available rooms.

An OTA charges an 18% commission on a $200 booking. What net rate does the hotel keep?

Answer: $164

$200 × (1 − 0.18) = $164.

What does Cost Per Occupied Room (CPOR) measure?

Answer: Operating cost to service each occupied room

CPOR divides the rooms department's operating costs by occupied rooms to show how efficiently each stay is serviced.

Revenue rises $100,000 year over year and GOP rises $60,000. What is the flow-through?

Answer: 60%

Flow-through = change in GOP / change in revenue = $60,000 / $100,000 = 60%.

In group sales, what is the 'wash'?

Answer: The share of a contracted room block that goes unused

Wash is the difference between rooms blocked and rooms actually picked up by the group.

What does 'booking window' (lead time) measure?

Answer: Number of days between when a reservation is made and arrival

Lead time is the number of days between booking and arrival, a key input for pace and pricing decisions.