Deck 5: Global Reservations Technologies

Question 1

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

Answer 1

False

Question 2

Many small chains and independent properties outsource their reservation offices to travel agents as a method of reducing costs, increasing the quality of guest service, and upping the ADR.

Answer 2

False

Question 3

The price-occupancy mix is a management decision because the same total rooms revenue (yield) can be achieved by either higher rates and lower occupancy or lower rates and higher occupancy.

Answer 3

True

Question 4

The airlines' decision to eliminate commissions to travel agents had a similar consequence for hotels. Reservations originating with travel agencies almost disappeared for both airlines and hotels.

Question 5

Yield management was initially introduced by the hotel industry in the late 1960s. The rapid development of yield management technology, however, is attributed to the airlines because they had the financial resources to implement this capital-intensive investment.

Question 6

Which of the following is NOT one of the four global distribution systems (GDS)?

A) Amadeus
B) Galileo
C) THISCO
D) Worldspan
E) Sabre

Question 7

PHASER, TravelCLICK, and Smith Travel Research's STAR are examples of:

A) Reservation outsourcing acronyms
B) Voice recognition systems
C) Computer interfaces between the desk and the marketing department
D) Mapping capabilities now available on GDS
E) Tools for measuring yield management results

Question 8

SMERF is an acronym for:

A) Social, Military, Educational, Religious and Fraternal group business
B) An Internet travel site that Travelocity has opened
C) One of the GDS's, global distribution systems
D) AT&T's voice recognition system
E) None of the above

Question 9

As part of the reorganization taking place in the lodging industry (per Chapter 3), the reservations department of the individual hotel:

A) Has become more computerized
B) No longer reports to the rooms manager
C) Has essentially disappeared, having been replaced by Web sites
D) Is now headed by a vice-president
E) All of the above except B

Question 10

Central reservation offices (CROs):

A) Are sometimes located outside of the United States
B) Can be accessed by dialing toll-free 800 numbers
C) Charge member hotels a fee for each reservation taken
D) May employ as many as several hundred agents during peak periods
E) All of the above

Question 11

Sketch or describe the flow of communication that takes place when a potential guest requests ahotel reservation through any agency that uses the Global Distribution System.

Question 12

A common complaint by hotels about travel agents is that travel agents send business chiefly during the hotel's busiest periods, and send relatively few guests when hotel occupancy is low.

Question 13

Due in part to the assistance of yield management procedures, it is generally accurate to say that the most expensive rates are charged to the last rooms sold. Similarly, the lowest rates are available far in advance, when few rooms have yet been sold for the date in question.

Question 14

Although costly and impressive, large hotel chain reservation centers receive relatively few reservations directly from guests. It seems most leisure and corporate guests generally prefer dealing with travel agents rather than dealing directly with CRS's.

Question 15

Yield management has achieved its objectives if the fraction (Rate Realized / Rate Potential) is one (1) or higher.

Question 16

Although on-change and out-of-inventory rooms are caused by different circumstances, their impact on yield management decisions is the same.

Question 17

Like closing certain dates to arrival, requiring a minimum length of stay is also a commonly used yield management control technique.

Question 18

Last room availability technology allows the CRS to sell the hotel's last room without accidentally overselling the property.

Question 19

From a yield management perspective, corporate guests are usually more rate sensitive than leisure guests, because they are traveling on their company's budget.

Question 20

The yield management team should have members from the front desk, the reservations department, and the hotel sales office.

Question 21

From a yield management perspective, the occupancy pattern of a resort (busy on weekends and slower on weekdays) is opposite to that of the commercial hotel, which is slower on weekends and busier on weekdays.

Question 22

A general manager knows his/her yield management program has achieved its objectives when the ratio of Rate Realized: Rate Potential is one or higher.

Question 23

A failure to pay commissions in a timely manner is one of the travel agency industry's major complaints against the hotel industry.

Question 24

Among other things, yield management considers customer demand, lead time, buyers' sensitivity to price, and room type requested.

Question 25

Although we see fenced rate quotes (non-refundable reservation, 21-day advance purchase, stay over on a Saturday night) regularly in the airline industry, it is still relatively uncommon to find them in the lodging industry.

Question 26

The United States is the global leader in online travel reservations.

Question 27

Application Service Providers (ASP's) provide global distribution and central reservation services to unaffiliated, independent hotel properties.

Question 28

Yield management decisions are partially based on the fact that leisure guests are sensitive to date (they must travel during their vacation dates), while corporate guests are most sensitive to rate (as businesses strive to save money, hotel room prices are carefully evaluated).

Question 29

Single-image inventory allows all Application Service Provider (ASP) members to feed data from the same database.

Question 30

Airlines generally pay travel agents a 10% commission on all air travel booked. Hotels generally pay travel agents no commission at all (beginning in 2001).

Question 31

With growing corporate and leisure business, the travel industry is widely successful these days. As such, the number of travel agents in America has grown substantially since 2001.

Question 32

Surprisingly, the most expensive average room rates are booked on-line. Cheaper average rates come from direct telephone calls to the CRS.

Question 33

Third-party travel sites act as inventory aggregators; contracting with hotels for a set number of rooms at a deeply discounted price, and then re-selling the rooms through popular web sites.

Question 34

Meta-search web sites (e.g. SideStep, Kayak, TravelZoo), use sophisticated search technology to exploit hotels and chains which have not ensured internal rate integrity.

Question 35

The average corporate guest books his/her lodging accommodations and air flights at least 45-days in advance of travel.

Question 36

In terms of yield, a 200-room property selling 80% of its rooms for $65 per night ADR would demonstrate identical yield to a different 200-room property selling 65% of its rooms for $80 per night ADR.

Question 37

Which of the following items seems out of place (doesn't belong with the others in the set):

A) Gemini
B) Amadeus
C) Hampton
D) Apollo
E) Sabre

Question 38

Which of the following would not be considered a method for making a hotel reservation:

A) E-mail
B) Travel agent
C) Telephone
D) Internet
E) All of the above are methods for making reservations

Question 39

Which of the following services do Application Service Providers (ASP) offer member hotels:

A) Access to alternate distribution systems
B) Internet-based reservations
C) Connection to the GDS
D) Listing on a CRS
E) All of the above

Question 40

Chain-owned Central Reservation Systems:

A) Receive upwards of 1-2 million calls per month
B) Charge hotels a per reservation fee
C) Monitor the length of time reservation agents invest per call
D) Accept, hold and relay incoming calls by means of automatic call distributor equipment
E) All of the above

Question 41

Yield management systems for the lodging industry:

A) Increase room rates as occupancy falls
B) Were adopted from the airline industry
C) Apply to individual reservations and not to group business
D) Improve overall room cleaning time (yield)
E) All of the above

Question 42

As occupancy improves and the hotel fills, the reservation manager will likely:

A) Lower room rates
B) Book more IT packages
C) Restrict sales to government per diem and AARP guests
D) Give the central reservation system increased authority to sell and report
E) All of the above

Question 43

When the hotel approaches capacity, reservations may be regretted if they come:

A) As a result of an advertised hotel package
B) For AAA or AARP
C) From a government employee
D) From travel agents
E) All of the above may be regretted

Question 44

Regarding Central Reservations Offices:

A) Some handle as many as 2 million or more calls per month
B) Most are located in the East, and many of those are in either Boston or New York City
C) Few chains use them; it is primarily a franchise service
D) All have the authority to override the local property
E) None of the above

Question 45

The universal switch (switch technology) allows a travel agent to:

A) Override closed dates by switching off certain guest parameters (like AAA or AARP)
B) Make hotel reservations through voice recognition
C) Bypass the hotel's yield management system
D) Use one reservation terminal even though s/he is sending numerous reservations to various central reservations systems. In other words, the travel agent can use one terminal and it can speak the language of many systems
E) None of the above

Question 46

Regarding central reservation offices, which of the following is true:

A) Automatic Call Distributor Equipment holds and relays calls in a rotating sequence
B) Res centers generally charge a fee to the hotel for each room booked
C) The average call to a CRO lasts approximately six minutes and thirty seconds
D) Time is of the essence. Most CRO's monitor the length of time each agent spends on the phone
E) All of the above are true except C

Question 47

Travel agents:

A) Charge guests approximately 10% more for the room than the hotel does
B) Get a larger commission from the central reservations office, so they usually bypass hotel reservations offices
C) Get a commission from the hotel of approximately 10%
D) All of the above are true
E) None of the above are true

Question 48

Yield management's major contribution toward setting room rates is its recognition of the:

A) Amount of room inventory available (in-house supply and demand)
B) Height of the floor of the room assigned
C) Quality of the room's furnishings and amenities
D) Importance of local competition
E) All of the above