CTP CTP Financial Management & Pricing 2

Question 1

What is 'yield management' in the context of tour pricing?

Accepted Answer

Adjusting prices and availability to maximize revenue based on demand patterns and booking timing

Answer

Yield management uses pricing strategies to maximize revenue by charging more during high demand periods and less during slower periods.

Question 2

What is the purpose of a 'deposit policy' for tour bookings?

Accepted Answer

To secure the booking and cover initial costs while reducing financial risk from last-minute cancellations

Answer

Deposit policies secure a commitment from the traveler and help tour operators cover upfront costs like accommodation reservations and guide fees before the full payment is due.

Question 3

What does 'accounts receivable' represent for a tour company?

Accepted Answer

Money owed TO the company by clients or travel agents who have booked but not yet paid in full

Answer

Accounts receivable is money that customers or agents owe to the tour company for services already delivered or reserved but not yet fully paid.

Question 4

A tour operator has total monthly fixed costs of $5,000 and earns $100 profit per passenger. How many passengers are needed to break even each month?

Accepted Answer

50 passengers

Answer

Break-even passengers = Fixed costs ÷ Profit per passenger = $5,000 ÷ $100 = 50 passengers per month.

Question 5

What is 'net profit margin' for a tour business?

Accepted Answer

The percentage of total revenue remaining as profit after all costs are deducted

Answer

Net profit margin is calculated as net profit divided by total revenue, expressed as a percentage, showing how much of each dollar earned is actual profit.

(CTP) Certified Tour Professional Practice Test

(CTP) Certified Tour Professional Practice Test

CTP CTP Financial Management & Pricing 2