HADM 1350 Study Guide - Final Guide: Operating Leverage, Fixed Cost, Variable Cost

• School: Cornell University
• Department: Hotel Administration
• Course: HADM 1350
• Professor: Reneta Mc Carthy

Document Summary

Final exam study guide wash down blocking fewer rooms than the number of rooms a group requested. Inquiry call to the hotel conversion book from call denial no booking from call. At low demand support high rate, maximize rate and occupancy. Always keep the highest rate open because people might still be willing to pay high rate. Need to be recorded because it can calculate: conversion rate lost business due to price resistance unconstrained demand. Flow through refers to money that goes from top line to bottom line. Fixed cost + variable costs = operating expenses. Hotel industry is characterized by high fixed cost and low variable costs, which means high operating leverage. Operating leverage is a measure of how revenue growth turns into earnings growth. Break-even point is the point when expense and gain are equal. Be volume= (fixed costs)/(1-variable cost %