9 Questions
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
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
What is the formula to calculate Sales Per Item (SPI)?
SALES ÷ IS
What are the three key elements to be an effective Revenue Manager?
- Understand the importance of Revenue Management, 2. Understand many complex factors, 3. Become better at making Revenue Management decisions
What is the formula to calculate Item Per Transaction Count (IPTC)?
IS ÷ TC
What is the purpose of Revenue Management in a hospitality business?
To address the issue of value offered to customers
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
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.
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