Question

In: Operations Management

a. In the hotel industry, package rate refers to a...A.room sold using a fade...

a. In the hotel industry, package rate refers to a...


A.room sold using a fade rate.

B.rooms that is sold at full or "rack" rate.

C.group of hotel products and service sold for one price.

D.rooms rate discount offered to members of a consortium.

b. Which is the best description of an individual hotel's competitive set?


A.Hotels located in close proximity to the individual hotel

B.Hotels that offer the same rate as the individual hotel

C.Hotels with the same brand affiliation as the individual hotel

D.Hotels with which the individual hotel directly competes

c. In the short run, when room supply is held constant...


A.changes in room demand will not affect the selling prices of rooms.

B.a decrease in demand for rooms typically leads to a decreased selling price.

C.a decrease in demand for rooms typically leads to an increase in selling price.

D.an increase in demand for rooms typically leads to a decreased selling price.

d. GOPPAR is best defined as hotel's...


A.revenue less management controllable costs per available room.

B.ADR x RevPAR x Occupancy %

C.revenue less management controllable costs per sold room.

D.ADR x RevPAR

Solutions

Expert Solution

A .In hotel industry package rates refers to rate at which a customer pays for different products, goods and services including room tarrifs. These goods and services may include pickup, drop, meals, drinks, massage and other facilities.

Hence the option C is correct.

B. Competitive set in hotel industry refers to set of hotels which are in direct competition to your own hotel. Hence option D is correct.

C. In short run as per rule of Demand when room supply is constant increase or decrease in demand results in increase or decrease in prices of rooms respectively. Hence option B is correct.

D. GOPPAR is defined as gross operating profit per available room. Gross operating profit is revenue less management controllable costs. This is now divided by no. of rooms available in hotel. Hence option A is correct.


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