CHP Revenue Management & Pricing Strategy 2 — Questions and Answers
Question 1: Which distribution channel typically charges hotels the HIGHEST commission fees?
- Direct hotel website
- Global Distribution Systems (GDS)
- Online Travel Agencies (OTAs) like Expedia or Booking.com (Correct answer)
- Corporate negotiated accounts
Correct answer: Online Travel Agencies (OTAs) like Expedia or Booking.com
OTAs typically charge commissions of 15–30%, making them the most expensive distribution channel compared to direct bookings.
Question 2: What is 'rate parity' in the context of hotel distribution?
- Offering the same rate to all demographic groups
- Maintaining consistent room rates across all distribution channels (Correct answer)
- Setting rates equal to those of the competitive set
- Pricing all room types the same
Correct answer: Maintaining consistent room rates across all distribution channels
Rate parity requires hotels to offer the same price across all channels (OTAs, direct, GDS) to avoid undercutting any single platform.
Question 3: A hotel's occupancy is low mid-week. Which revenue management tactic is MOST appropriate?
- Raise rates to increase RevPAR
- Implement a minimum length-of-stay restriction
- Offer promotional rates or packages to stimulate demand (Correct answer)
- Close the hotel to non-VIP guests
Correct answer: Offer promotional rates or packages to stimulate demand
When occupancy is below target, promotional rates, packages, or targeted campaigns can stimulate incremental bookings and fill unsold inventory.
Question 4: What does GOPPAR measure in hotel performance analysis?
- Gross Operating Profit Per Available Room (Correct answer)
- Guest Operations Percentage Per Annual Review
- General Operations Pricing Per Available Rate
- Gross Output Per Paying And Returning guest
Correct answer: Gross Operating Profit Per Available Room
GOPPAR (Gross Operating Profit Per Available Room) measures total profitability by accounting for all revenue and operating expenses, not just room revenue.
Question 5: Which factor would MOST likely cause a revenue manager to implement a 'minimum length of stay' (MinLOS) restriction?
- Low occupancy during a holiday weekend
- High demand around a local event, with risk of stranded low-value nights adjacent to it (Correct answer)
- Oversupply in the competitive market
- A new OTA contract negotiation
Correct answer: High demand around a local event, with risk of stranded low-value nights adjacent to it
MinLOS restrictions during high-demand periods (e.g., around a concert or convention) prevent short stays that would block higher-value multi-night reservations.
Question 6: What is 'displacement analysis' used for in hotel revenue management?
- Analyzing which guests leave negative reviews
- Evaluating whether accepting a group booking at a discounted rate is worth the lost transient revenue (Correct answer)
- Calculating how many rooms are out of order
- Determining the best layout for a hotel lobby
Correct answer: Evaluating whether accepting a group booking at a discounted rate is worth the lost transient revenue
Displacement analysis compares the net revenue of a group booking against the potential transient revenue that would be displaced to decide if the group is worth accepting.
CHP Revenue Management & Pricing Strategy 2
Which distribution channel typically charges hotels the HIGHEST commission fees?