CHS Revenue Management & Financial Operations

Question 1

What is RevPAR and why is it important in hotel management?

Accepted Answer

Revenue Per Available Room: a key performance metric calculated by multiplying occupancy rate by average daily rate

Answer

RevPAR (Occupancy Rate × ADR, or Total Room Revenue ÷ Available Rooms) measures how well a hotel generates room revenue relative to its total capacity, combining both pricing and occupancy performance.

Question 2

What is labor cost percentage in hospitality?

Accepted Answer

Total labor costs divided by total revenue, expressed as a percentage, typically ranging from 25-35% in hotels

Answer

Labor cost percentage (total wages + benefits ÷ total revenue × 100) is a critical operational metric. Hospitality supervisors must balance adequate staffing for service quality against labor cost targets.

Question 3

What is a food cost percentage and what is the target range?

Accepted Answer

The cost of food ingredients divided by food sales revenue, typically targeting 28-35% in full-service restaurants

Answer

Food cost percentage (Cost of Goods Sold ÷ Food Revenue × 100) measures ingredient costs relative to sales. Supervisors monitor this to control waste, manage portions, negotiate with suppliers, and maintain profitability.

Question 4

What is yield management in hospitality?

Accepted Answer

Adjusting prices based on anticipated demand to maximize total revenue from a perishable inventory (hotel rooms, airline seats)

Answer

Yield management uses demand forecasting, pricing strategies, and inventory controls to sell the right room to the right customer at the right price at the right time, maximizing revenue from perishable room nights.

Question 5

What is the difference between fixed costs and variable costs in hospitality?

Accepted Answer

Fixed costs remain constant regardless of occupancy (mortgage, insurance); variable costs change with volume (labor, supplies, utilities)

Answer

Understanding fixed vs. variable costs helps supervisors manage budgets. Fixed costs (rent, insurance, management salaries) remain constant. Variable costs (hourly labor, food, cleaning supplies) fluctuate with business volume.

CHS - Certified Hospitality Supervisor Practice Test

CHS - Certified Hospitality Supervisor Practice Test

CHS Revenue Management & Financial Operations