* Lesson 12

Lesson 12 Quiz Review

Multiple Select

Which of the following are descriptions of Total Revenue Management (TRM)? (You may select more than 1 answer)

• Spa is included as a revenue stream of the hotel

• Every department for themselves

• Maximising revenue

• All for one and one for all

... about maximising revenue for all revenue streams that are available in the hotel. The goal is to actively increase guest spending and all departments must align their departmental goals to the overall business objective of the hotellace this with your body text.

​Duplicate this text as many times as you would like.

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​TRM is...

Multiple Choice

Which of the following provides a clear goal of applying the TRM concept to a hotel?

• Superior customer experience

• Total profit

• Departmental revenue generation

• Optimisation of revenue streams

Clear Goal

All revenue streams such as rooms, F&B, meetings and events, Spa and gym, are taken into consideration for total revenue management. Every revenue stream has a different cost structure, and the profit margin varies. The goal of the hotel is to maximise its profit. Thus, some business decisions are taken at the expense of an individual revenue stream if they benefit the greater good and bring higher profit margins to the hotel

Multiple Choice

Which of the following is a concept excluded from total revenue management?

• Opportunity Cost

• Demand Forecasting

• Inventory Control

• Channel Management

Opportunity Cost is...

... the value of what you lose when choosing between two or more options. In Revenue Management, instead of opportunity cost, we use displacement cost in evaluating business options. Displacement cost refers to the lost in potential revenue to the hotel by accepting one piece of business over a competing opportunity. When a hotel accepts a group, it may have to refuse some volume of non-group business as a result

Multiple Choice

Why is TRM necessary for businesses in the hospitality industry to consider?

• Inventory can be kept for the next day

• TRM must be utilised during the peak demand periods

• Perishability of inventory

• More money for shareholders

This goes back to fundamentals of RM whereby capacity/inventory sold is perishable. The product and services provided in a hotel cannot be stored for the next day. Revenue not collected on the same day or meal period is lost forever and cannot be generated again on the day

​Fundamentals of Revenue Mgt

Multiple Choice

What must a hotel do to succeed at TRM?

• Top management need to know about it

• Pay attention to historical data only

• Goals must be aligned and integrated into the organisational culture

• Have a revenue manager for all departments

Success in TRM

The hotel needs to inculcate a revenue management culture into the DNA of the hotel. Every department from manager to staff must be trained and understand what is TRM and how to identify guests who bring the best return. This even starts from HR when hiring staff that are familiar with TRM. Only if organisational goals are aligned and a TRM culture is ingrained, a hotel can succeed at TRM