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WorksheetsS1.25 BUSM4568 W10
Total questions: 10
Worksheet time: 75secs
Main approaches in setting up your room rates are
1.Market condition approach
2.Rule of thumb approach
3.Hubbart Fomula Approach
4.Answer 1 & 3
5.All of the answers
Market condition approach: Management shall look at comparable hotels and “charge only what the market will accept” or
1. charge one higher one lower than others
2. charge same price at others
3. charge higher price at others
4. charge lower price at others
the downsides of the "Market condition approach" sometimes not reflecting the cost, scale, revenue streams
True
False
Rule of thumb approach: $1 for each $1,000 of construction and furnishing costper room, assuming a ________occupancy rate.
68%
56%
76%
70%
Hubbart Fomula Approach:
1.Look at desired rate
2.Add all costs and minus other incomes
3.Gives Average Price per Room
1.Look at desired Profit
2.Add all costs and minus other incomes
3.Gives Average Price per Room
1.Look at expected Cost
2.Add all costs and minus other incomes
3.Gives Average Price per Room
1.Look at desired Profit
2.Add all revenues
3.Gives Average Price per Room
Approach by Square Feet (Meters) Calculation: Same as Hubbart’s Formula, but instead of dividing the total costs and revenue by the number of rooms, it divides by the total square feet of room space available.
True
False
The average size of a hotel room in the U.S. is about 330 square feet =________m2 (from CNBC, 2015), new modern style hotel rooms come smaller
31m2
41m2
51m2
21m2
Hotel Rack Rate =_____________
1.Walk-in Rate
2. is the price charge before any discounts
3. is the price charge after any discount
Answer 1& 2
Answer 1& 3
Revenue management encompasses:
- product definition
- competitive benchmarking
- strategic pricing
- demand forecasting
- business mix manipulation, and distribution channel management.
True
False
Revenue management: A set of multidisciplinary revenue maximization strategies and tactics meant to improve the _______________ of certain businesses.
1.Occupancy
2. Profitability
3. Cost
4. Price
