Which stay control measure is seldom the best option for revenue maximization?

Question

BlackTom AI · Accepted Answer

The provided data for this item is missing the list of answer options, which makes a full comparative analysis across all choices impossible. What we do have is the stated answer: "close to arrival".

Explanation related to the concept (given in the prompt as the selected option):
- In revenue maximization for stays (hotels, lodging, or similar), keeping inventory unpriced or heavily restricted close to the arrival date tends to reduce the ability to capture demand with higher yields. If you only allow or deploy restrictive stays near arrival, you may miss opportunities to sell rooms at higher rates that come from advance bookings or from flexible pricing strategies.
- Close-to-arrival stay controls typically limit the number of rooms available for booking or enforce last-minute restrictions. This can lead to higher risk of inventory not being sold, lower overall occupancy, and missed opportunities to use dynamic pricing to maximize revenue. In many cases, revenue managers prefer to optimize pricing and availability earlier (with longer lead times and capacity control) to secure bookings at favorable rates and to balance occupancy and average daily rate (ADR).

Why this choice can be a poor option for revenue maximization (in general):
- It reduces forecasting accuracy and the ability to react to demand trends because it concentrates bookings into a narrow time window, limiting market segmentation and price discrimination opportunities.
- It can create strain on inventory management, as unsold inventory toward the end of a period may go to waste rather than being sold at a reasonable price.
- It often conflicts with yield-management principles that emphasize proactive pricing, inventory allocation, and flexible terms to capture maximum willingness to pay across different segments.

Why other potential strategies would typically be more favorable for revenue (in absence of the other options listed):
- Advanced purchase discounts, price discrimination by booking windows, and flexible stay controls that allow for earlier allocation at higher ADR generally outperform last-minute or arrival-close constraints in revenue optimization.
- Dynamic pricing and channel mix optimization help adapt to demand fluctuations and maximize total revenue rather than constricting arrivals at the last moment.

Note: Because the actual answer options are not provided in the data, this analysis focuses on the implications of the stated answer and the general revenue-management reasoning behind why near-arrival containment is often not the best option for maximizing revenue.

BUS-480-01 Final Exam

Which stay control measure is seldom the best option for revenue maximization?

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BUS-480-01 Final Exam

Which stay control measure is seldom the best option for revenue maximization?

View Explanation

Log in for full answers

Similar Questions

If the average room rate is $50 when 500 rooms are sold, and if the multiple occupancy is 60% and double rooms are priced $17 higher than single rooms, compute the double room rate

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