Deck 1: The Traditional Hotel Industry

Question 1

A strong national currency enables businesses (think hotels) of one nation to gain a foothold in the businesses of nations whose currencies are weak.

Answer 1

True

Question 2

The famous hotelman, Ellsworth Statler, said "Location, location, location,"meaning that real estate is a critical element of the hotel business.

Answer 2

True

Question 3

The most popular hotel rating guides in the United States are the Mobil Guide, the Michelin Guide and the AH&LA Guide to Hotels.

Answer 3

False

Question 4

A hotel that sold 240 rooms last night with a total rooms revenue of $24,000 has an average daily rate of $100.00.

Question 5

Legal definition and regulations by the U.S. Bureau of the Census require properties of 500 rooms or more to be called Hotels, those of 50 rooms or less to be called Motels, and those in between to be called Motor Inns or Motor Hotels.

Question 6

Which of the following terms is out-of-place?

A) American plan
B) Modified American plan
C) European plan
D) Continental plan
E) Bed and Breakfast (B&B)

Question 7

The smallest degree of double occupancy would most likely be in:

A) Business hotels
B) Resort hotels
C) Family-oriented facilities
D) Ski chalets
E) Boutiques

Question 8

Calculate RevPar for the following hotel. The hotel had 300 rooms available for sale last night. The hotel sold 200 rooms and had gross rooms revenue of $36,000. Calculate RevPar:

A) $120.00
B) $18.00
C) $180.00
D) $12.00
E) None of the above

Question 9

The important Occupancy Ratio is computed:

A) Number of Rooms Occupied ÷ Number of Rooms Available
B) Number of Rooms Available ÷ Number of Rooms Occupied
C) RevPar x Number of Rooms Double Occupied
D) RevPar x ADR
E) Both C and D since they almost produce the same mathematical values

Question 10

Which type hotel is NOT recognized as a current classification?

A) Eco(logical) Hotel
B) Convention Hotels
C) Boutique Hotel
D) Extended-Stay Hotel
E) Megaresort

Question 11

This question requires two brief statements:Part A: Describe the business cycle that dictates the economic ups and downs of the hotel industry.Part B: At what stage of the cycle is the industry currently in? How do you know that?

Question 12

Hotels control labor costs by using call-in staff: Employees work only when the business is there; housekeeping is one such department.

Question 13

Hoteliers value their properties on a per room basis; speaking, for example, of $150,000 per room.

Question 14

AAA, American Automobile Association, has a contract from the U.S. Department of Commerce to rate and rank hotels in the 50 states as a means of assuring quality standards to international guests visiting the country.

Question 15

European hotels that have a "first-class"rating by the World Tourism Organization are the best the country has to offer.

Question 16

If a resort includes all meals, tips, food and beverage in one room-rate quote, it is said to be a megaresort.

Question 17

Breakfast is the meal most often taken in the hotel by registered guests.

Question 18

Geography is to the resort, as commerce is to the transient hotel and population is to the residential hotel.

Question 19

Because occupancy reflects both supply and demand it measures the economic health of the individual hotel and, indeed, of the entire industry.

Question 20

So few countries of the world use governmental rating systems (the U.S.A.'s use is an exception) that travelers are best advised to use ADR as the best measure of class.

Question 21

The plan of the conference center, CMP, is similar to the Caribbean's all-inclusive plan and both borrow from the old-fashion American Plan.

Question 22

Classifying a hotel by its class is far more accurate than classifying it by, say, its location.

Question 23

The hotel industry is counter cyclical; that is, it improves when the general economy falls and declines when the general economy booms.

Question 24

"Mom-and-Pops"and the highway motels that they once operated are a historical note, replaced by franchised/chain names, but the individual properties might still be owned individually.

Question 25

A budget hotel might have a 1:1 employee to guest ratio, while a casino hotel would beeven better, say 0.05 employees to each room.

Question 26

Innkeeping is a cyclical industry that goes from highly profitable peaks to very difficult troughs.

Question 27

RevPar is the product of ADR (say $80.00) multiplied by occupancy (say 80%).

Question 28

RevPar measures revenue relative to the total room inventory; ADR measures revenuerelative to the number of rooms sold.

Question 29

RevPar is closely watched because it reflects management's overall ability: bringing in business and holding down expenses.

Question 30

Once a hotel achieves its break-even point, profits accumulate rapidly because fixed expenses and many semi-fixed expenses have been met.

Question 31

Occupancy measures quantity and ADR measures quality.

Question 32

The number of rooms available is known to the individual hotel executive but only estimated by those measuring larger units, such as the regional or national occupancy.

Question 33

There are approximately 250,000 hotels and about 25,000,000 hotel rooms, in the United States, so the average hotel is about 250 rooms in size. That's about right.

Question 34

Which spelling is correct?

A) Accommodations
B) Accommadations
C) Acomodations
D) Accadations
E) None of the above

Question 35

Location, location, location:

A) Is part of the boutique mystic
B) Refers to a critical component of real estate
C) Is a term invented by Conrad Hilton
D) Is emphasized by trophy hotels
E) None of the above

Question 36

Break-even points are usually measured:

A) As a seasonal factor
B) By a percentage of occupancy
C) With RevPar
D) By a percentage of double occupancy
E) All of the above except C

Question 37

What other term or terms means the same as "the number or rooms sold?"

A) Percentage of occupancy
B) Number or rooms available
C) Number of rooms occupied
D) Occupancy percent
E) Both C and D

Question 38

Which statement is the most accurate? Above all else, hotelkeeping

A) Relies on word-of-mouth marketing
B) Focuses on food sales
C) Depends on its room sales
D) Tries to build double occupancy
E) None of the above

Question 39

Which sources track hotel statistics?

A) Tourism offices
B) International agencies
C) Private consulting/accounting firms
D) Governments
E) All of the above

Question 40

If the hotel has a "large nut,"its:

A) Lawns and landscaping are spectacular but expensive to maintain
B) Buffet is spectacular
C) RevPar is terrific!
D) Fixed and operating costs are high
E) None of the above

Question 41

Which of the following is a semi-fixed expense?

A) Debt payment
B) Power/energy/water
C) Real estate taxes
D) Toilet tissue
E) All of the above

Question 42

Which is NOT a characteristic of the commercial lodging industry?

A) Fixed supply
B) Perishability
C) Location
D) High weekend occupancy
E) Seasonality

Question 43

Industry professionals value hotel rooms:

A) On a cost per-room basis
B) On a resale price per room
C) On the value of the bank loan
D) On a per-key basis
E) All of the above except C

Question 44

The number of rooms occupied is the same as the number of:

A) Rooms sold
B) Guests in the hotel
C) Rooms available
D) Employees per room
E) None of the above

Question 45

The dollar value of a hotel is often expressed as: so many dollars per….

A) Sales price per room
B) Construction cost per room
C) Room key
D) Square Acreage
E) All of these except D

Question 46

Room Revenue can be overstated (exaggerated) by:

A) Including the value of breakfasts quoted in the rate
B) Excluding the value of the airport shuttle service
C) Including the value of room taxes collected
D) Excluding the value of room taxes collected
E) Both A and C