CTC CTC Financial Management & Pricing Strategies

Question 1

What does the term 'net rate' mean in travel industry pricing?

Accepted Answer

The wholesale cost a supplier charges the travel agent before markup

Answer

The price after taxes are removed

Answer

The final price displayed to the customer

Answer

The price after applying a group discount

Question 2

Which pricing strategy involves setting a high initial price and gradually lowering it over time?

Accepted Answer

Price skimming

Answer

Penetration pricing

Answer

Value-based pricing

Answer

Bundle pricing

Question 3

A travel consultant earns a 10% commission on a $3,500 cruise booking. What is the commission amount?

Accepted Answer

$350

Answer

$35

Answer

$3,150

Answer

$385

Question 4

What is a 'override commission' in the travel industry?

Accepted Answer

Bonus commission paid by a supplier when an agent reaches a sales volume threshold

Answer

A penalty fee charged when booking is modified

Answer

Commission paid directly by the traveler

Answer

A fixed flat fee replacing percentage-based commissions

Question 5

Which financial document summarizes a travel agency's revenues and expenses over a specific period?

Accepted Answer

Income statement (Profit & Loss)

Answer

Balance sheet

Answer

Cash flow statement

Answer

Accounts receivable ledger

Question 6

What is the primary purpose of a travel agency's 'client trust account'?

Accepted Answer

To safeguard client funds paid in advance until services are delivered

Answer

To hold operating expenses

Answer

To earn interest for the agency

Answer

To pay supplier invoices automatically