Deck 4: Forecasting Availability and Overbooking

Question 1

Interestingly, out-of-inventory rooms do not affect rooms available for sale (the denominator in an occupancy equation) while out-of-order rooms do affect inventory.

Answer 1

False

Question 2

Early arrivals, like cancellations and no-shows, reduce the number of expected arrivals.

Answer 2

False

Question 3

Room count forecasts prepared by the reservations department are used for the sole purpose of staffing the front office. Managers in other departments do not refer to occupancy forecasts when establishing their own staffing schedules (for example, restaurant or housekeeping staff schedules).

Answer 3

False

Question 4

A hotel reservation is essentially a legal contract. But lawsuits against guests for no-shows and lawsuits by guests against hotels for being walked are very rare.

Question 5

Interestingly, advance-deposit reservations have the greatest likelihood of no-show. Nonguaranteed reservations (6pm) generally have the highest rates of arrival.

Question 6

Room availability forecasts often allow for adjustments based upon historical data. In regard to these adjustments, which of the following is true?

A) No-shows are guests with reservations (either guaranteed or non-guaranteed) who never arrive
B) Understays are guests who stay at least one night beyond their scheduled departure date
C) Cancellations are treated in much the same way as stayovers
D) Early arrivals are guests who check out at least one day prior to their scheduled departure
E) Answers A, C, and D are true. But B is false because that is the definition for overstays

Question 7

A guest remaining in the hotel at least one day past his originally scheduled departure is known as a(n):

A) Late departure
B) Latent check-out
C) Overstay
D) Understay
E) None of the above

Question 8

Assume that a 200 room hotel sold 50% of its rooms last night. Today, we anticipate that 75 rooms will depart. We hold 60 6pm reservations and 90 guaranteed reservations. There are no advance deposits. What is the forecasted number of rooms available for sale?

A) 85
B) 55
C) 75
D) 0
E) 25

Question 9

Assume that a given property has 300 rooms. After accounting for the day's departures and arrivals, 100 rooms remain unsold. Of these 100 rooms available, 50 rooms cannot be sold because they are out-of-inventory. In this case, the forecasted occupancy percentage would be:

A) The forecasted occupancy percentage would be 60%
B) The forecasted occupancy percentage would be 20%
C) The forecasted occupancy percentage would be 80%
D) The forecasted occupancy percentage would be 40%
E) None of the above are the correct occupancy %

Question 10

Early departure fees:

A) Generally do not apply to AAA or AARP reservations
B) Have been enthusiastically accepted by guests who were walked previously because their reserved room is now assured
C) Were started by the credit card companies after they experienced high chargebacks
D) Are an understay penalty that has not achieved wide usage
E) All of the above

Question 11

On October 6, a 300-room property had occupancy of 70%. What is forecasted occupancy for October 7 if:
• 10 rooms are put out-of-order at 9am on October 6
• 150 rooms are on reservation
• Registration information indicates 101 rooms will depart today
• The hotel as an historical 6% cancellation rate
• The hotel as an historical 10% no-show rate

Question 12

A room placed out-of-order is generally repairable within a relatively short time. A room placed out-of-inventory usually takes longer to repair.

Question 13

Reservations without deposit or guarantee (non-guaranteed reservations) are sometimes referred to as 4pm- or 6pm-hold reservations. That is because by 4pm or 6pm (or whatever other time might be hotel policy-like possibly noon for a resort property), the hotel has the right to cancel the reservation if the guest has not yet arrived.

Question 14

By their very nature, guaranteed reservations (including advance deposit reservations) have no time limit on them. Guaranteed reservation guests arriving as late as 2am (or even later) should still expect to find their room. After all, that is one of the key reasons for guaranteeing the reservation.

Question 15

It is possible for a guest who sent-in an advance deposit to be walked to another hotel, despite the fact that the room had been paid for.

Question 16

The daily accuracy of reservation forecasts can be improved by making hourly adjustments, just as the monthly forecast can be improved by making weekly adjustments.

Question 17

It is probable that on most days, the percentage rate of no-shows with guaranteed reservations would be lower than the percentage rate of no-shows with non-guaranteed reservations.

Question 18

Because each day's reservation forecast begins with the previous day's occupancy, long-range forecasting is considered accurate only to about thirty days.

Question 19

Hotels will dishonor the reservations of new arrivals rather than evict guests who overstay their original reservations. This is one of the root causes of overbooking.

Question 20

Advance deposit reservations have a greater likelihood of no-show than non-guaranteed reservations.

Question 21

A hotel reservation is essentially a legal contract. Therefore, in the case of an overbooking situation, hotels or guests could probably sue for breech of contract. However, few ever do-it's too much work for too little return.

Question 22

All advance deposit reservations are considered guaranteed for the most part, but not all guaranteed reservations are advance deposit.

Question 23

A hotel might sell a room to a "walk-in"guest who arrived without a reservation. This is the same as "walking"a guest into one of the hotel's unreserved and vacant guest rooms. In other words, "walking"a guest and a "walk-in"guest are basically the same thing.

Question 24

A computerized reservation system tracks reservation counts by room type rather than by an actual room number (like "room number 2137").

Question 25

Historically, when only a few rooms remained available for a given date at a hotel prior to the introduction to "last room availability"systems, the hotel's reservation manager had to "close"availability with the central reservation office. This meant that remaining sales had to be done by the hotel, but this method prevented the CRO from overbooking the date.

Question 26

Guaranteed reservations made against a national credit card are less secure than many people realize. In many instances, guests who get charged a no-show but refuse to pay are supported (upheld) by their credit card company. This leaves the hotel without payment for the unoccupied room night.

Question 27

Out-of-inventory rooms do not affect the room availability count, while out-of-order rooms do affect the room availability count.

Question 28

The perfect fill is defined as a hotel which reaches or exceeds 100% occupancy on a given night AND every room in the hotel is physically occupied by a guest(s).

Question 29

A simple, unadjusted room count does not consider historical trends (like higher no-shows on Wednesdays) in the calculation.

Question 30

Adjusted room counts are re-calculated several times thorough the day. This increases their overall accuracy.

Question 31

The number of anticipated stayover rooms in an adjusted room count calculation generally becomes a moot point for those calculations made after the check-out hour.

Question 32

The number of nonguaranteed reservations in an adjusted room count calculation generally becomes a moot point for those calculations made after 6pm.

Question 33

Understays and overstays, though opposite in definition, actually affect the number of rooms available for sale in the same manner; they each increase rooms available by the number of rooms understaying or overstaying.

Question 34

A 500-room hotel had 80% occupancy last night. Today's expected departures are 250, arrivals are 350, and there are 10 rooms out of inventory. How many rooms are available for sale?

A) +0
B) +10
C) -10
D) +100
E) -100

Question 35

Assume that a 350-room hotel sold 70% of its rooms last night. Today, we anticipate that 150 rooms will depart. We hold 120 that are 6 p.m. reservations and 150 that are guaranteed reservations. Ten (10) rooms are reported to be out of inventory after last night's damaging monsoon. We know historically that understays are 5% and overstays are 7% of occupied rooms; that early arrivals are 2% and cancellations are 6% of expected arrivals. No shows for 6 p.m. reservations are 10%; no shows for guaranteed reservations are 3%. How many rooms are available to walk-ins?

A) +0
B) -7
C) -2
D) +3
E) None of the above

Question 36

Regarding overbooking:

A) Most states allow the wronged party to recover between two and four times the room rate
B) Most states allow punitive damages
C) Most states allow ejection of guests who overstay their reservations
D) All of the above
E) None of the above

Question 37

Overbooking is caused in part by:

A) IRR (internal rate of return)
B) RNA (registered not assigned)
C) NS (no-show)
D) DNS (did not stay)
E) All of the above

Question 38

The no-show factor for reservations fluctuates with the:

A) Type of hotel
B) Distance the guest is coming
C) Purpose of the guest's trip
D) Nature of the guest or group
E) All of the above

Question 39

A guest who remains a day beyond the originally scheduled departure date is a(an):

A) Late departure
B) Understay
C) Latent check-out
D) Overstay
E) Both A and C

Question 40

Using the following data, how many rooms are available using a simple, unadjusted room count? The hotel has 260 rooms. Last night's occupancy was 80%. Today there are 5 rooms out-of-inventory. 6pm reservations are 80. Guaranteed reservations are 100. There are 150 rooms due to check out today. How many rooms are available using a simple, unadjusted room count:

A) +0
B) +22
C) +17
D) -5
E) -7

Question 41

Using the following data, how many rooms are available using an adjusted room count? The hotel has 330 rooms. Last night's occupancy was 90%. 6pm reservations are 100. Guaranteed reservations are 100. There are 200 rooms due to check out today. Understays are projected at 2%. Overstays are projected at 4%. Early arrivals are projected at 3%. 6pm cancellations are projected at 10%. Guaranteed cancellations are projected at 5%. No shows are projected at 2%. How many rooms are available using an adjusted room count:

A) +0
B) +17
C) -5
D) +22
E) -7s

Question 42

Room availability forecasts often allow for adjustments based upon historical data. In regard to these adjustments, which of the following is true?

A) Understays are guests who check-out at least one day earlier than their scheduled departure date
B) No-shows are guests with reservations (either guaranteed or non-guaranteed) who never arrive
C) Early arrivals are guests who arrive at least one day prior to their scheduled arrival
D) Cancellations increase the number of available rooms
E) All of the above are true

Question 43

In regard to the concept of overbooking, which of the following is true?

A) Deliberate overbooking which results in walked guests is a breech of legal contract
B) The federal government has threatened, in the past, to enact legislation penalizing hotels for overbooking
C) Overbooking is a relatively common and widely used technique used by hotels to diminish the impact from no-shows
D) Some states have passed legislation which forces hotels to award damages to walked guests
E) All of the above are true

Question 44

In regards to a property's cancellation policy, which of the following is true?

A) A property is more likely to charge a "no-show" if he were a vacationing tourist than if he were a regular corporate customer
B) A property is more likely to be lenient in regards to their cancellation policy if a guest makes the effort to call and cancel his reservation in advance rather than waiting until the next day to call and explain why he was a "no-show"
C) Generally, the cancellation policy of a resort property may require more lead time for full refund than the cancellation policy of say an airport hotel
D) Generally, "no-shows" are more likely with an advance deposit reservation than they are with a 6pm reservation
E) All of the following are true except D

Question 45

Regarding the "quality"of the reservation, rank the following from highest (best) quality tolowest worst) quality.1. 4pm or 6pm reservation2. Corporate or credit card guarantee3. Advance deposit reservationRank from highest ________ middlest ________ to lowest ________.

A) Highest 3, Middle 1, Lowest 2
B) Highest 3, Middle 2, Lowest 1
C) Highest 2, Middle 1, Lowest 3
D) Highest 1, Middle 2, Lowest 3
E) None of the above

Question 46

If a 320-room hotel sold 160 rooms and had 20 rooms out of inventory (OOI), what wouldits occupancy percentage be:

A) 60%
B) 53.33%
C) 50%
D) 20%
E) Impossible to say. This question does not provide sufficient information.

Question 47

A guest remaining in the hotel at least one day past his originally scheduled departure date isknown as a(n):

A) Late departure
B) Understay
C) Overstay
D) Latent check-out
E) None of the above