CRME Certified Revenue Management Executive Study guides, Class notes & Summaries

What is the industry term used to describe the sum of prices paid by a business's customers? - ANSWER-total revenues Historically, what concept have hospitality managers chiefly used to calculate their selling prices? - ANSWER-costs What is an algebraic equivalent of the formula: Sales = Costs + Profit? - ANSWER-profit=sales-costs What is the name for the net value achieved by both parties in a business transaction? - ANSWER-profit What element is not present in a barter economy? - ...

Occupancy - ANSWER-The percentage of rooms occupied during a given period of time. Average Daily Rate (ADR) - ANSWER-The average rate sold during a given period of time. Revenue Per Available Room (RevPAR) - ANSWER-A metric calculated by multiplying the occupancy percentage by the ADR RevPAR Index - ANSWER-A measure of a hotel's performance against the market by comparing a hotel's RevPAR to the RevPAR of a set of other hotels. Cost Per Occupied Room (CPOR) - ANSWER-The total expen...

Goods-producing industries - ANSWER-agriculture ,mining, manufacturing, and construction; each of them creates some kind of tangible object Service industries - ANSWER-Those businesses that primarily sell their customers intangible goods. Revenue optimization strategies and tactics can be used any time a service business is characterized by: - ANSWER-•Constrained Supply •High Fixed Costs •Variable Demand •Versioning Opportunities •Perishable Inventory •Ability to Manage Di...

Revenue management is a set of revenue maximization strategies and tactics that - ANSWER-can be used to improve the profitability of certain businesses. When the American Airlines CEO developed yield management, what type of information was crucial to its success? - ANSWER-forecasting Which of the following statements about hotel revenue management is FALSE? - ANSWER-Revenue management is new, as are all of the strategies that are employed to maximize profit. Which of the following is N...

Rooms Inventory - ANSWER-All of the unique forms of guest room products offered for sale by a lodging facility. DD Room - ANSWER-The common CRS and PMS code for a guest room containing two full-sized (double or queen) beds Close Out - ANSWER-to remove from sale or to stop selling Room Code - ANSWER-A property-specific, shortened description used to identify a specific room product in a hotel Concierge Floor - ANSWER-An area (often an entire floor) located within a hotel, access to wh...

Demand (consumer) - ANSWER-The number of potential buyers with the interest and ability to purchase the products sold by a business at the specific price offered. Capital Improvement - ANSWER-An addition to a property that will enhance its value or increase its useful life. Examples; roof replacement and the purchase of new furnishings. Historical Data - ANSWER-Data describing events that have already occurred. Such data are also known as actual data and results data. Trailing Period - ...

Top 10 Revenue Management Mistakes - ANSWER-#1)Believing that discounting is an effective way to increase revenue. #2)Believing the right price to charge for a room night is established solely on the hotel's costs and ROI expectation. #3)Thinking that artificial intelligence - revenue management software - is superior to human intelligence. #4)Thinking that short-term goals must have priority over long-term goals. #5)Counting revenue dollars as equal - regardless of the distribution channel...

revenue - ANSWER-the total amount of sales achieved a specified time period Revenue formula - ANSWER-number of sales x price per unit Revenue Managers must do 3 things - ANSWER-1. understand the importance of revenue mgt 2. understand the many complex factors 3. become better at making revenue mgt decisions than their competitors the profit fallacy - ANSWER-sales = costs + profit OR profit = revenue-expenses both buyer and seller - ANSWER-seek a profit profit - ANSWER-net valu...

What is bigger in the tourism industry, fixed costs or variable costs? - ANSWER-fixed costs are bigger -Think of an airplane: staffing, airport fees (fixed) - huge amount of the costs for airplanes come from fixed costs; food, fuel (variable) - not as easy to determine the variable costs We can reduce prices (even below total cost per room), as long as the reduced price covers, fixed cost per room or variable cost per room? - ANSWER-We can reduce prices as long as the reduced price covers t...

Revenue - ANSWER-The total amount of sales achieved in a specified time period Revenue is calculate as: - ANSWER-Number of Units Sold x Unit Price Effective managers of an organization's revenues MUST do three things - ANSWER-1. Understand the importance of revenue management 2. Understand the many complex factors that influence revenue management strategy and tactics 3. Become better at making revenue management decisions than their competitors Proft Formula - ANSWER-Revenue - Exp...