Revenue Management & Pricing Strategy Flashcards
6 cards from real CHP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Revenue Management & Pricing Strategy flashcards as text
What does RevPAR stand for in hotel revenue management?
Answer: Revenue Per Available Room
RevPAR (Revenue Per Available Room) measures a hotel's ability to fill rooms at an average rate and is calculated as ADR × Occupancy %.
What is the primary goal of yield management in a hotel?
Answer: To maximize revenue by selling the right room to the right guest at the right time and price
Yield management optimizes revenue by dynamically adjusting pricing based on demand, booking window, and market conditions.
A hotel has 200 rooms, sells 150 rooms in a night, and achieves an ADR of $120. What is the RevPAR?
Answer: $90
RevPAR = ADR × Occupancy % = $120 × (150/200) = $120 × 0.75 = $90.
Which pricing strategy involves offering lower rates for reservations made far in advance?
Answer: Advance purchase / early bird pricing
Advance purchase rates reward early bookers with discounts while helping hotels secure revenue and improve forecasting accuracy.
What is the 'competitive set' (comp set) used for in hotel revenue management?
Answer: Benchmarking the hotel's performance against similar competing properties
The comp set is a group of comparable hotels used to benchmark metrics like RevPAR, ADR, and occupancy to understand market position.
What does a hotel's 'rack rate' represent?
Answer: The published, undiscounted standard room rate before any promotions
The rack rate is the hotel's maximum published price, from which discounts (corporate, AAA, OTA, etc.) are typically calculated.