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Revenue management | Latest Exam Questions with 100% Correct Answers
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Revenue management | Latest Exam Questions with 100% Correct Answers
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Revenue management | Latest ExamQuestions with 100% Correct Answers
Inventory Management - ✅✅The process of allocating and modifying the number of
products available for sale at various prices and through various distribution channels
Main problems with fixed price model: - ✅✅-hotel has not generate extra income from
guests who might have been willing to pay more than $150 per room, say $225 per night
-eliminated your ability to capture any legitimately earned consumer surplus
Consumer Surplus - ✅✅The difference between the amount a buyer would be willing to
pay for a product or service and the amount they are changed
Lessons for RM: - ✅✅-Changes in hotel's ADR should always be analyzed in conjunction
with GOPPAR movements, ex. decrease in ADR by 6.7% but increase in GOPPAR by 30%
-Efforts made to capture consumer surplus directly impacts profits
Limits to Differential Pricing - ✅✅-Imperfect knowledge
-Cannibalization
-Arbitrage
-Questions of Legality or Ethics
Price Fence - ✅✅The specific requirements that describes who is and is not eligible for
a special pricing offer.
Factors Impacting Differential Pricing - ✅✅-Payment terms
,-Consumer characteristics
-Location
-Time
-Quantity
-Distribution channel
-Product versioning
-bundling
Direct Channel - ✅✅A system of selling to consumers without the use of an intermediary
Indirect Channel - ✅✅A system of selling to consumers utilizing one or more intermediaries
Intermediary - ✅✅An entity that acts as a communication or service link between buyers
and sellers that are unable or unwillling to deal directly
Net ADR Yield - ✅✅The proportion of the standard rate (ADR) for a room sale that is
actually realized by a hotel after subracting the cost of fees and assessments associated with
the specific distribution channel responsibile for the room's sale
net ADR yield formula: - ✅✅Net Room Rate / Standard ADR =
where; Standard ADR - Distribution channel costs = Net room rate
Price Band - ✅✅The span from lowest to highest price in a range of prices
Add Features - ✅✅This may include increasing quality, quantity, or the service levels
provided to customers
, Subtract features - ✅✅Doing so may allow the product or service to appeal to new customers
while leaving current customers unaffected
Bundling - ✅✅Combining individual products and/or services intro groupings that are sold for
a single price, usually lower than the sum of the prices charged if the same included items
were purchased individually
Revenue Management - ✅✅The application of disciplined tactics that predict buyer
response to prices, optimize product availability, and yield the greatest business income.
Revenue Optimization - ✅✅the application of disciplined tactics that predict buyer response
to prices, optimize product availability, and yield the greatest business profits.
Hard Constrain Management: Option A - ✅✅Establish one fixed price, then sell to customers on
a first come-first served basis until they have exhausted their supply of products.
Hard Constrain Management: Option B - ✅✅Allocate the limited supply to selected
customers who meet established criteria (i.e. they are volume buyers, repeat buyers, or they
hold other favored buyer status)
Hard Constrain Management: Option C - ✅✅Raise prices until demand is reduced
sufficiently to equal the available supply
Self Constraint Management - ✅✅Lodging industry RMs face hard supply constraints - fixed
number of rooms, seasonal demand, perishable inventory
-faced primarily by foodservice operators(i.e. they have the ability to add chairs or extend
hours)
Supply Constraint as a Hotelier - ✅✅HARD
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