Revenue Management 101: Knowledge Check
Your journey through Revenue Management 101 is nearly complete! This final unit will help ensure you haven’t missed anything critical along the way. Think of this as a guide to help you review critical lessons you should have learned throughout the course. It is a good idea to make sure you have completed all the courses in this unit before attempting this knowledge check.
For each important topic, you’ll be offered a question to determine your understanding. For anything you answer incorrectly, you will be provided guidance to help you hunt down what you may have missed in a course that could help you answer the question. You will be offered links to previous courses directly from the knowledge check. Leave the knowledge check open while you visit these courses. After reviewing a course, simply return to the knowledge check and correct your answer. Once you have answered every question correctly, you will have successfully completed Revenue Management 101.
Which of the following represents a strategic goal as expressed in our Company Overview video?
As a company, we have evolved and expanded over the years, from a software company selling one product, to a revenue solutions company with multiple offerings. As a result, our strategic goals have similarly evolved and expanded over the years.
- Become the market-leading producer of revenue management software
- Change the way businesses make decisions
- Attain a majority market share by 2018
- Attain adoption across 10000 customers by 2018
- Be recognized as a Revenue Management thought leader
Revenue Management Maturity Profiles
Match each characterization to the proper profile of the Revenue Management Maturity Framework
As our clients gain maturity in revenue management processes and skills, they have different needs that are fulfilled by different products. When we are able to classify their maturity level, we can better serve them by recommending solutions that precisely fit their needs.
Revenue Optimization Cycle
Select the 3 key questions users should ask from the choices below.
The Revenue Optimization Cycle is a foundational element that is used for training across all our products. It’s four sections - Forecast, Optimization, Monitor, and Control - provide users with a way to put in context what they will learn about how a product “thinks” and serves as the basis for explaining the inputs, outputs and best places for a user to interact. Throughout the Revenue Optimization cycle, there are 3 key questions that users should continually ask themselves as they are working with a system.
- Does the system know what you know?
- Is the system data accurate?
- Does the system know the truth?
- Does the system have complete data?
- Do you know what the system knows?
- Is the system up to date?
Revenue optimization strategies
Which of the following is considered an effective strategy for revenue optimization?
Even if demand is known, it is a difficult and time-consuming task to select the best mix of business from the available demand. A revenue management system can help minimize the complexity and time required to apply the necessary strategies for selecting the optimal mix.
- Increase rates in proportion to forecasted demand
- Accept group bookings over individual bookings
- Always prioritize long stays over short stays
- Focus on the shoulder nights
Benefits of Revenue Management
Which of the following represent the benefits EconomyHotels described as a result of implementing an our products?
By implementing our products, our clients gain significant tangible business benefits. One of our clients, EconomyHotels, reported gaining multiple benefits from a successful long-term engagement with us.
- Higher Average Daily Rate (ADR)
- Revenue Per Available Room (RevPAR) Growth
- Revenue Generation Index (RGI) growth
- Increased guest satisfaction
Revenue Manager Concerns
Which 2 of the following initial RM concerns did Neil Farthing mention in the Northstar video?
When a hotel converts from a manual, spreadsheet-driven Revenue Management process to one that is automated, Revenue Managers often express concerns about the change. These concerns are important to us because our ability to address them and help establish a revenue management culture, will increase the adoption of our software and ultimately help our clients become more successful. In his video piece on Northstar Hotels, Executive Director Neil Farthing describes some of the concerns his RMs expressed during rollout.
- Less time available for analysis and forecasting
- Uncertainty about how it would change the RMs job
- Lack of trust in the system’s decisions
- Concern the system would make all decisions for the RM
- Concern about the time it would take to learn how to use the system
Which of the following characteristics describe “true partnership” according to our team from the 10 Minute World Tour video?
As a company, one of our goals is to cultivate true partnerships with our clients. This is important because when clients work with us as partners, they are like allies that can help us compete and advance thought leadership around Revenue Management. But what attributes make a client a good partner? In the 10 Minute World Tour video, you heard some of our Managing Directors answer this question.
- We work closely with the client’s executive team
- The client serves as a reference
- There is a long term relationship with the client
- We is able to successfully help the client move ahead along the Revenue Management Maturity Framework
- Clients that have vision and who are willing to try new things
Revenue management measurements
While RevPAR or Revenue per Available Room is the preferred internal measurement for performance at a hotel, which of the following represents the best measure for comparing performance against the market?
Effective revenue management requires not just the knowledge of what to measure and how to measure, but also an understanding of the relative importance of measurements. Not all RM measurements are created equal!
- ADR (Average Daily Rate)
- RGI (Revenue Generation Index)
- OCC (Occupancy)
- MPI (Market Penetration Index)
- ARI (Average Rate Index)