Question 1

Which of the following is out-of-place with the rest of the set?
A) Use rate
B) Part-day rate
C) Shoulder rate
D) Day rate
E) None of the above; that is, they all refer to the same rate

Accepted Answer

The answer of Which of the following is out-of-place with...

Question 2

Among the surprising surcharges that some hotels have added to their room rates are:
A) Resort fees
B) Energy fees
C) Charitable contribution fees
D) Early departure (before the date specified by the reservation) fees
E) All of the above

Accepted Answer

All of the options listed (Resort fees, Energy fees, Charitable contribution fees, Early departure fees) are examples of surprising surcharges that some hotels have added to their room rates. These fees are often added to cover specific services or contributions and can catch guests off guard if they are not aware of them at the time of booking.

Question 3

The Building Cost (Room) Rate:
A) Is simply a rule-of-thumb, a frequently quoted yardstick for room rates
B) Includes land improvements (landscaping, for example) as part of building costs
C) Works out to be $1 per $1,000 in construction costs
D) Translates into larger-sized rooms requiring higher room rates
E) All of the above except D

Accepted Answer

The Building Cost (Room) Rate is indeed a rule-of-thumb used in the hospitality industry to estimate room rates based on construction and improvement costs, but it does not directly dictate that larger-sized rooms require higher room rates, as room pricing can be influenced by various factors beyond size and construction costs.

Question 4

Regarding room rates:
A) New York City has the world's highest ADR
B) Upselling produces its most dramatic effects on sold-out days
C) Conventions are often charged the same for single or double occupancy
D) Resort hotels have used incentive rates successfully to get leisure guests to check out early
E) All of the above except A

Accepted Answer

The answer of Regarding room rates:
A) New York City has...

Question 5

The iceberg effect of complaints means that:
A) Resolved complaints are costly, but no one knows by how much
B) Many complaints are not voiced and therefore not resolved
C) Management pretends to resolve issues for which there are numerous complaints
D) No one knows how many complaints are resolved by quality guarantees
E) Both A and D

Accepted Answer

The iceberg effect of complaints refers to the phenomenon where the majority of customer complaints are not directly voiced to the company or service provider, meaning that only a small portion of dissatisfaction is visible (like the tip of an iceberg) while the bulk remains unseen. This suggests that there are many more issues and dissatisfactions among customers than those that are actually reported or addressed.

Question 6

Rooming slips contain:
A) Information - floor plan of the convention wing
B) In-house marketing information - dining room hours
C) Instructions - how to use the electronic key
D) Regulations - fire instructions
E) All of the above

Accepted Answer

Rooming slips can contain a variety of information useful to guests, including the floor plan of the convention wing, in-house marketing information such as dining room hours, instructions on how to use amenities like the electronic key, and important regulations like fire instructions.

Question 7

The ADA is the:
A) Americans with Disabilities Act, designed to help the handicapped get around
B) Articles against Dopey Attitudes, lodging's industrywide drive to promote TQM
C) Allied Directors of America, an important national convention that every city seeks
D) A Damned Angry movement, effort to get employees to be more guest sensitive
E) None of the above

Accepted Answer

The Americans with Disabilities Act (ADA) is a civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life, including jobs, schools, transportation, and all public and private places that are open to the general public. Its main purpose is to ensure that people with disabilities have the same rights and opportunities as everyone else, including access to facilities and services.

Question 8

To make "empty minutes"pass quickly for guests waiting in line:
A) Post a sign telling how long before the end is reached
B) Show video clips on an overhead monitor
C) Have an employee "work" the line
D) Build a front-desk attraction; a big aquarium for example
E) All of the above

Accepted Answer

All of these strategies help in making the wait seem shorter for guests by engaging them or providing information that helps manage their expectations about the wait time.

Question 9

"The room rate should be high enough to meet fixed and variable expenses and return a fair value to investors"is a statement associated with the:
A) Cost of Renovation rate
B) Ideal Average Room Rate computation
C) Rule of Thumb room rate calculation
D) Hubbart Room Rate Formula
E) All of the above

Accepted Answer

The Hubbart Room Rate Formula is designed to help hoteliers and investors determine the appropriate room rate. This formula takes into account both fixed and variable expenses, as well as the desired return on investment, to calculate a room rate that covers costs and provides a fair return to investors.

Question 10

Comp rates are given to:
A) High rollers in casino hotels
B) Travel agents on fam trips
C) VIPs
D) Other hotel managers
E) All of the above

Accepted Answer

Complimentary rates, or "comp rates," are often provided to a variety of individuals including high rollers in casino hotels, travel agents on familiarization (fam) trips, VIPs, and other hotel managers as a means of business promotion, relationship building, or reward for high spending and loyalty.

Question 11

Compute the anticipated room rate using the Rule-of Thumb, or Building Cost, Rate.
GIVEN: Number of rooms 800
Average Occupancy Percentage first two years 60%
Cost of erecting the building $64,500,000
Cost of acquiring the land $8,000,000
Legal costs to incorporate $500,000
Upfront costs to lease furniture and TV's $100,000
Landscaping costs $1,250,000
Cost of tearing down the old structure $750,000

Accepted Answer

The answer of Compute the anticipated room rate using the...

Question 12

Distinguish between:A. Upsell and upgradeB. Leisure and business markets, in terms of elasticity

Accepted Answer

The answer of Distinguish between:A. Upsell and upgradeB. Leisure and...

Question 13

The airline industry borrowed both the idea and the technology for CRS from the hotel industry; actually, it was from Holiday Inn.

Accepted Answer

The airline industry developed the first Computer Reservation Systems (CRS) independently, with American Airlines creating the first system, Sabre, in the 1960s. The hotel industry, including Holiday Inn, later adopted similar technology for their reservation systems.

Question 14

Last room availability was launched in Washington DC because the city's hotels received payment from Congress to hold rooms for VIPs until midnight.

Accepted Answer

Last room availability is a term used in the hotel industry referring to a contractual agreement between hotels and travel agencies or corporate clients, ensuring that the client has access to the last available room at a contracted rate. It is not specifically launched in Washington DC nor related to payments from Congress for holding rooms for VIPs.

Question 15

Although U.S. air carriers have stopped paying commissions to travel agencies, hotels have continued paying them the standard 10% commission.

Accepted Answer

Hotels generally continue to pay travel agencies a standard commission, often around 10%, for booking rooms, unlike many U.S. air carriers that have largely ceased paying commissions to travel agencies.

Question 16

There seems to be no explanation for it, but Central Reservation Centers have seen a large increase in telephone bookings even though many guests now use the Internet to make room reservations.

Accepted Answer

The answer of There seems to be no explanation for...

Question 17

When making reservations, corporate guests are more rate sensitive and leisure guests more date sensitive.

Accepted Answer

Corporate guests often have more flexibility with rates due to business budgets and are more date sensitive due to specific timing of meetings or events, while leisure guests are typically more rate sensitive as they are spending their own money and may have more flexibility with dates to secure the best deal.

Question 18

Hurdle pricing is the term given to the competitive environment in reservation offices: It requires each reservationist to better (jump the hurdle of) his/her record by increasing either the number of reservations taken, or the number of days booked, or the average rate of the booking.

Accepted Answer

Hurdle pricing refers to the practice of setting a specific price point that customers must be willing to pay in order to purchase a product or service, often used in revenue management to segment the market and maximize revenue, not to the competitive environment in reservation offices.

Question 19

Many small chains and independent properties outsource their reservation offices to travel agents in order to reduce costs, increase the number of reservations, improve the quality of guest service and better the ADR.

Accepted Answer

The answer of Many small chains and independent properties outsource...

Question 20

How best to balance the price-occupancy mix is a management call because the same total room revenue can be achieved by either higher rates and lower occupancy or lower rates and higher occupancy.

Accepted Answer

The balance between price and occupancy is a strategic decision made by management to optimize total room revenue, as higher prices may lead to lower occupancy and vice versa, but both strategies can achieve similar revenue outcomes.

Quiz 15: Understanding Billing and Financial Operations in the Hospitality Industry

Which of the following is out-of-place with the rest of the set?

Among the surprising surcharges that some hotels have added to their room rates are:

The Building Cost (Room) Rate:

Regarding room rates:

The iceberg effect of complaints means that:

Rooming slips contain:

The ADA is the:

To make "empty minutes"pass quickly for guests waiting in line:

"The room rate should be high enough to meet fixed and variable expenses and return a fair value to investors"is a statement associated with the:

Comp rates are given to: