Revenue Management Quiz 2

segmentation

hotels offer a variety of rates to a variety of different groups/segments to ensure that a hotel has every chance to sell out on any given night

variable demand and seasonality

a hotel has fluctuating demand by day of week, time of year, and dates of holidays, and special events, resulting in the need for variable pricing throughout the year

booking pace

demand forecasting system and revenue manager will utilize booking pace trends and competitive pricing to predict remaining demand and pricing power as a stay date approaches

economic value

the sum of all the benefits and features that a product or service offers a customer

group

negotiated rates for a group of rooms for a specific date and often non-repeating

contract

airline crews that require a set fixed number of rooms per night, 365 days a year

retail

rooms sold through the hotel’s distribution channels for general sale

special corporate

negotiated rates between a business and hotels to accommodate the business’s out of town employees and clients

government

per diem established for a set geographical area

wholesaler

contracts between a hotel and travel merchandiser

packages

hotels utilize room inventory and add other services to it in order to entice customers to book

qualified rates

other public or private rates offered to guests based on specific memberships

benchmark rate

best available rates, provides the foundation of your pricing strategy

value creation

services and products are combined and priced in a manner that increases the perceived economic value for a unique set of customers

positioning against the competitive set

evaluating a hotel’s experience against other similar properties and then determining the appropriate rate premium or discount that will create economic value for a specific segment

pricing level

pricing changes on a daily basis as revenue managers update price point based on a combination of factors (projected occupancy, capacity, etc.)

rooms mix

hotels have a selection of room types to accommodate the different needs of its customers

static pricing

regardless of when the customer is making the reservation, the rate would be the same, provided there is a room available to accommodate them

dynamic pricing

hotel rates vary by season, day of the week, or by the hour depending on many factors

differential pricing through booking parameters

hotels use additional discounted pricing in order to attract early bookers at traditionally higher rates than what they would otherwise sell rooms for

opaque pricing

sell rooms at lower pricing through channels that allow for the rate not to be publicly displayed as such

rate parity and channel distribution

most hotel companies have “Best Rate Guarantee” policies, which highlight the company’s commitment to maintaining the best (or equal) price on their website

computer-generated sensitivity models

computer-generated pricing models have been created to assist a revenue manager in determining the optimal pricing for the hotel

product differentiation

marketers modify or add supply/products to better adapt to demand, only enough to skim the surface of how much of the market could be penetrated

micro-segments

groups of consumers who share a similar level of interest in a set of feathers

bundled travel

reservations where multiple travel services are combined

clustering

a heterogeneous consumer market is divided into homogeneous groups

opaque

hotel is not disclosed until the nonrefundable reservation is made

fences (segmentation hedges)

allow hoteliers to control the reservations they are willing to accept based upon the price being paid

price discrimination

offering various prices to various consumers

elasticity

market segment’s willingness to purchase a room depending on the rate amount

displacement cost

value of other business that will be turned away if the group is given the necessary inventory

contract segment

business that guarantees room nights on a contracted basis over an extended period of time