CTC CTC Financial Management & Pricing Strategies 2

Question 1

What is 'yield management' as applied in the travel industry?

Accepted Answer

Adjusting prices dynamically based on demand to maximize revenue

Answer

Yield management (revenue management) uses dynamic pricing strategies to sell the right product to the right customer at the right time and price, maximizing total revenue.

Question 2

A travel consultant marks up a hotel package from a $1,200 net rate by 25%. What is the selling price?

Accepted Answer

$1,500

Answer

$1,200 × 1.25 = $1,500, which is the final selling price after applying a 25% markup.

Question 3

Which term describes the minimum price at which a travel product must be sold, as set by a supplier?

Accepted Answer

Minimum advertised price (MAP)

Answer

Minimum advertised price (MAP) is the lowest price a supplier permits retailers or agents to publicly advertise for their product.

Question 4

What financial metric calculates the total revenue generated per booking relative to costs?

Accepted Answer

Profit margin

Answer

Profit margin measures the percentage of revenue remaining after all costs are deducted, indicating how efficiently the business converts sales into profit.

Question 5

What is the 'rack rate' in the hotel industry?

Accepted Answer

The standard published retail price before any discounts

Answer

The rack rate is a hotel's standard undiscounted room rate, from which discounts for travel agents, corporate clients, and loyalty members are typically applied.

(CTC) Certified Travel Consultant Practice Test

(CTC) Certified Travel Consultant Practice Test

CTC CTC Financial Management & Pricing Strategies 2