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Hospitality Business and Revenue Management

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Hospitality Business and Revenue Management

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Questions and Answers

What is the formula to calculate Revenue?

TOTAL UNITS SOLD X UNIT PRICE

What is the primary goal of a business organization?

To earn Profit

What is the role of a Revenue Manager?

To ensure that the company's prices match a customer's willingness to pay

What is the formula to calculate Average Check per Transaction Count (ACTC)?

SALES ÷ TC Signup and view all the answers

What is a Channel in the context of Revenue Management?

A source of business and a vehicle used to communicate with the source of customer Signup and view all the answers

What is the formula to calculate Sales Per Item (SPI)?

SALES ÷ IS Signup and view all the answers

What are the three key elements to be an effective Revenue Manager?

<ol> <li>Understand the importance of Revenue Management, 2. Understand many complex factors, 3. Become better at making Revenue Management decisions</li> </ol> Signup and view all the answers

What is the formula to calculate Item Per Transaction Count (IPTC)?

IS ÷ TC Signup and view all the answers

What is the purpose of Revenue Management in a hospitality business?

To address the issue of value offered to customers Signup and view all the answers

Study Notes

Hospitality Business

A business providing food, beverages, lodging, travel, or entertainment services to people away from their homes.

Purpose of Business

To earn profit
To provide job opportunities

Profit

Net value achieved by the seller and buyer in a business transaction
Profit = Revenue - Expenses

Revenue

Total amount achieved in a specified time period
Revenue = Total Units Sold x Unit Price

Terms

TC: Transaction Count
CC: Cover Count
ACTC: Average Check per Transaction Count
ACCC: Average Check per Cover Count
IS: Items Sold
SPI: Sales per Item
IPTC: Item per Transaction Count

Formulas

Sales = Total Unit Sold
ACTC = Sales ÷ TC
ACCC = Sales ÷ CC
IS = Total Items Sold
SPI = Sales ÷ IS
IPTC = IS ÷ TC

Revenue Manager

Individual or team responsible for ensuring company prices match customer willingness to pay

Channel

Source of business and a vehicle used to communicate with customers

Effective Revenue Manager

Understands the importance of Revenue Management
Understands complex factors influencing revenue and strategies
Makes better Revenue Management decisions than competitors

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Description

Explore the core concepts of hospitality business, revenue management, and profit in the context of providing services to customers. Learn how to calculate profit and understand the purpose of business.