Knowledge

Question 1

Distribution Channel management

Answer 1

Process of delivering a product from the manufacturer to the end customer

Question 2

Businesses that generate hotel rooms reservations

Answer 2

• Travel agents
• Online travel agent
• Tour Operator
• Hotel Reservation websites
• Travel review sites
• Opaque booking sites
• Airbnb

Question 3

Travel agents

Answer 3

• receive 10-15% commission
• makes the hotel booking for the guests
• uses GDS
• make money by commission from the hotel

Question 4

Online travel websites

Answer 4

• website offers packages for holidays
• uses GDS
• large computer website
• eg. booking.com

Question 5

Tour operator

Answer 5

• group travel programs
• markets directly to consumer
• hotel has a number of rooms which they sell for a lower rate

Question 6

Hotel reservation website

Answer 6

• focus on selling hotel rooms

- loyalty program

Question 7

Travel review sites

Answer 7

• platform to share your experience

- gives the options to book trips

Question 8

Opaque booking sites

Answer 8

• guest bid for a room
• guest only know price,stars, and location
• hotels give up to 30-60% discounts

Question 9

Airbnb

Answer 9

-low commission for home owners

Question 10

PMS - property management systems

Answer 10

Controls onsite property’s

• POS( point of sales)
• CRS ( central reservations systems )
• Eg. opera

Question 11

CRS - central reservations systems

Answer 11

Manage hotels distribution and hotel room booking
Via travel agents

• supply attractive photos and creative site

Question 12

GDS - Global Distribution systems

Answer 12

A reservation platform to enable reservations 
4 major GDP companies:
-Sabre 
-Galileo
-amasdeus
-worldspan

Travel agents use this to book hotels,airlines etc

Question 13

WBE - web booking engining

Answer 13

Let’s guests shops for rooms and complete reservations

Question 14

Channel management systems

Answer 14

Controls the hotels inventory and rates across all distribution channels

Should reduce labour costs and improve efficiency by providing a way to control multiple channels

Question 15

How does the channel manager work for the hotel?

Answer 15

• deducts rooms sold via one website

- helps you create rate parity

Question 16

GDS users

Answer 16

• travel agents
• Internet travel sites
• opaque travel sites

Question 17

Rate parity

Answer 17

The distribution channel of a hotel should reflect the same rates for the same conditions for a particular room type

Question 18

Regulations for five star hotel

Answer 18

• at least two people in the reception
• Night receptionist
• Three types of shift,Early, late, night

Question 19

When do we use forecasting

Answer 19

• When you make plans to build or buy a hotel
  Investment, return on investment
• when you are managing the hotel
  Occupancy, and room rates, costs, staffing

Question 20

Front office records

Answer 20

• confidential information at all times kept within the hotel
• individual guest history profile

Question 21

Pick up rate

Answer 21

The difference between the number of rooms expected by group booking and the actual number of rooms booked by the group

Question 22

Hotel pick up record

Answer 22

Booking pace of your hotel

Recorded on every first day of the month the monthly occupancy for every future month

Question 23

Hotel pricing

Answer 23

-to price and understand how the consumer reacts to the pricing strategy
-marketing decisions need to be taken
-The cost structure:
Fixed costs [high - low]
Variable costs [high - low]

Question 24

Effects of price on market

Answer 24

• High prices may reduce demand
• May attract high guests and brand your hotel differently
• Price equals creates competition
• Low prices may fail to cover costs

Question 25

Positioning your price

Answer 25

1. Skim 2. Match 3. Surround 4. Undercut 5. Penetrate

Question 26

Skim

Answer 26

- Set your price is higher than the competition does - So you can skim off the higher paying customer in hope of getting people who are willing to pay a bit more - attracts luxury and more expensive that majority cannot afford

Question 27

Match

Answer 27

- Set one right to match the competition and another right slightly higher - Higher rates for better rooms

Question 28

Surround

Answer 28

- all for one price that is lower than the competition and one price is higher - To attract bargain seekers

Question 29

Undercut

Answer 29

- Offer a price is the same as your competition and lower one as well - In hope of attracting more customers

Question 30

Penetrate

Answer 30

- set your rates lower than the competition | - In hope of getting a customers to try your product

Question 31

Rate fences

Answer 31

Setting special conditions to receive special lower price Eg. book in advance, pay in advance p,stay more then 3 nights

Question 32

Costs approaches

Answer 32

Tangible criteria and intangible criteria

Question 33

Tangible criteria

Answer 33

- type of room - size of rooms - location and view - level of service

Question 34

Intangible criteria

Answer 34

- season - weekend or weekday - Time of arrival - Inclusive or non-inclusive - Per person or per room

Question 35

Establishing room rates

Answer 35

Room rates reflect service expectations to the hotels target market 1. Market condition approach 2. Rule of thumb approach 3. Hubbart formula Ford/ bottoms Up Approach

Question 36

Market condition approach

Answer 36

- commonsense approach - often used but has many problems - Allows the Local market to determine the rate

Question 37

Rule of thumb approach

Answer 37

- set the minimum average room rates at $1 for each $1000 of construction and furnishing costs per room - assume 70% of occupancy - Doesn’t include other hotel services

Question 38

Hubbart formula/Bottoms up approach

Answer 38

- What is the target rather than actual room prices | - Needs management estimates

Question 39

Method for bottoms Up approach

Answer 39

– Calculate desired profit – Calculate pretax profits – Calculate fixed charges and management fees – Calculate undistributed operating expenses -estimate non-room operating department profit/loss -calculate required rooms division income – Determine room division income – Calculate average room rate

Question 40

Room rate economies

Answer 40

The process by which revenue managers price rooms while considering how consumers may react to the pricing strategy

Question 41

Benefits of revenue management

Answer 41

- improved forecasting - Approved seasonal pricing and inventory decisions - Determine discount activity

Question 42

Revenue management methods

Answer 42

1. Capacity management 2. Discount allocation 3. Duration control

Question 43

Capacity management

Answer 43

- Designed to fix capacity of the hotel rooms in the most optimal way - balances risk of overbooking

Question 44

Discount allocation

Answer 44

- Offering discounts on hotel rooms | - Restricts time period And product mix available at reduced or discounted rates

Question 45

Duration control

Answer 45

- Special conditions/restrictions to the duration of the stay - 1 to 2 days as there’s a big event in the town - Reaches more occupancy

Question 46

Rack rates

Answer 46

- The published rates - maximum property can charge for a room - Maximum possible price

Question 47

Elements of revenue management strategies

Answer 47

- group room sales business rooms - transient rooms sales Individual booking

Question 48

Important features of distribution channel management

Answer 48

- be visible - attractive photos - languages - booking module