Business Basics
What are revenue centers?
Departments in hospitality businesses that generate revenue through the operation of the business.
What is revenue management?
The technique used to predict guest demand and optimize product availability and price to maximize revenue.
What are the two basic accounting statements in the hospitality industry?
The income statement and the balance sheet.
What is capital budget?
A report used to make expense decisions for longer periods of time, usually five years or more.
What is price elasticity?
The amount of sales that will be lost if prices increase
What are cost centers?
Departments in hospitality businesses that do not generate revenue but are needed for the operation of the business and to support revenue centers.
What is Displacement analysis?
is the process of deciding which set of guests you would rather have, when you have the opportunity to choose
What is another way the income statement is know for?
The profit and loss (P&L) statement.
Numbers or percentages that show how a business is performing are called:
key performance indicators.
What are Key performance indicators (KPIs)?
Numbers, or percentages, that show how a business is performing.
What is Price elasticity ?
reflects the amount of sales that will be lost if you increase prices.
What is the income statement?
A document that shows the company’s revenue and expenses for a specific period of time, usually for a month, quarter, or year.
The total sales divided by the number of guests is the:
average check.
What is an operational budget use for?
is used for the normal day-to-day activities of a business.
What is the balance sheet?
A report that looks at the overall financial position of the business at any given time.
What is Cost analysis?
A way to estimate the strengths and weaknesses of different options when making a business decision.
Which is a KPI in the restaurant segment?
Prime cost percentage.
Assets are things the company owns that have a commercial value, mention 3 examples of assets.
Building, land, food, or plates.
What is meant by low profit margin?
Very little money is being made per unit sold.
liabilities are money owed to other companies, what are 2 examples?
mortgage, and credit card bills.
What are the three characteristics of hospitality goods and services that make them unique?
Perishability, low profit margins, and high fluctuation of demand.
What does a balance sheet show?
Overall financial position of a business at a given time.
What is an STR report?
is a hospitality standard report that compares your hotel performance against that of a set of competitive hotels in your area. It includes occupancy percentage, average daily rate, and RevPar.
What is equity?
The shareholders’ stake in the company; defined as the difference between assets and liabilities on the balance sheet.
What are there five general steps to complete in every cost analysis:
1. Consider how the task is currently being handled.
2. State the reason why the new way is being considered.
3. Consider all benefits the new consideration will allow.
4. Consider all challenges the new consideration might present.
5. Conclusion: Have a specific detailed timeline for implementation or to stay with current status.
What is the process of using forecasting information to adjust prices to reflect the demand?
Yield management.
Which document compares a hotel’s performance against a set of competitive hotels in the same geographical area?
STR report.
Which form of management is the process of taking into account total economic income to a business based on all avenues or outlets?
Revenue.
Which kind of budget is used for the normal day-to-day activities for a business?
Operational.