True/false. Write 'T' if the statement is true and 'F' if the statement is false



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TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.

1)



A pure management contract is almost unknown today because management companies must put up some equity if they hope to win the management contract.

1)


_______


2)



In order to assure quality standards, franchise contracts require the franchise buyer (the franchisee) to hire the franchise seller (the franchisor) to manage the franchise.

2)


_______


3)



An industry "rule of thumb" is a simple formula for converting the square footage of a guest room into the square meters of the metric system.

3)


_______


4)



Casino hotels earn most of their revenue from casino win, assigning a secondary role to room sales, which is the primary earner of traditional hotels.

4)


_______


5)



Spas are widely available, but not profitable; hotels offer them merely as an amenity — part of the amenity creep that competition has forced on many hotels.

5)


_______


MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

6)



Which lodging company does not own, nor manage, nor lease, nor franchise hotels?

6)


_______

A)



Best Western

B)



Hilton

C)



Inter-Continental

D)



Cendant

E)



None of these, each chain does some of each


7)



Which of the following components would NOT be in a mixed-use project?

7)


_______

A)



Retail

B)



Entertainment

C)



Businesses

D)



Hotels

E)



Government


8)



Budget hotels compete by:

8)


_______

A)



Focusing on the quality and special characteristic of their swimming pools

B)



Reinforcing the brand name through additional amenities

C)



Locating on less expensive, somewhat-out-of-the-way real estate

D)



Using an employee to room ratio of 1 to 1

E)



All of the above


9)



Early efforts at "brand-stretching:"

9)


_______

A)



Created new trade organizations

B)



Encouraged chains to acquire other companies and brands

C)



Resulted in a better business cycle

D)



Improved the RevPar of mid-scale hotels

E)



All of the above except D


10)



REITS are:

10)


______

A)



Real Estate Issues Taskforce — watchdog group that monitors environmentally sensitive places (along beach fronts, for example) not open to hotel or other business development

B)



Real Estate Investment Trusts — methods of financing real estate, often hotels, through shares sold to the public

C)



Real Estate Insured Treasuries — federal loans to minority business persons if used to develop lodging facilities

D)



The "RE[ed] International Treaty," which limits resort developers from using strong currencies in under-developed nations

E)



None of the above


SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.

11)



Since the end of World War II, the French government has leaned "left," toward a labor/socialistic environment. Providing numerous social services for its citizens has driven up social-security payroll taxes. Minimum wages are high and there are many paid holidays.
Coincidentally, France has a much larger ratio of economy-budget/hard-budget hotels compared to higher-priced hotels when compared to similar ratios in other nations. Explain.

11)


_____________


TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.

12)



A brand is successful when customers (guests) have come to recognize the name and logo and associate a particular level of service, cost and accommodations with that name.

12)


______


13)



Improving RevPar industrywide has brought rising amenities with it.

13)


______


14)



Branding is about consistency more than about identifying with the parent corporation; and about quality more than about advertising.

14)


______


15)



Web sites that sell hotel reservations focus on price, not brand; that's possible because more and more hotel rooms are viewed as a commodity rather than a service.

15)


______


16)



Hard budget hotel rooms are about 225-275 square feet; especially those found in several airports worldwide.

16)


______


17)



Most states that allow casino gambling have passed legislation that forbids casinos to be part of mixed-use projects.

17)


______


18)



"Amenity creep" is the industry's special terminology for a suspect employee whom the hotel doesn't dare employ.

18)


______


19)



Double occupancy is more important to casino hotels than to commercial or resort hotels.

19)


______


20)



Mezzanine financing is the money borrowed to help finance construction of the lobby mezzanine; the area between the ground floor and the first floor.

20)


______


21)



There are five "Parties to the Deal;" the owner, the lender, the operator, the franchisor and the developer, but one party can combine several roles.

21)


______


22)



Hotel chains can be "parties to the deal" by operating the hotel and providing its brand; they are not permitted by law to be the developer, the equity source or the hotel's owner.

22)


______


23)



A membership organization, such as Best Western, is a hotel chain with a fancier name; there is really no difference in being a member of Best Western or a member of, say, Hilton or Marriott.

23)


______


24)



Owning companies are able to get many concessions (smaller fees, shorter contracts, etc.) from management companies if the contract is negotiated during good economic times.

24)


______


25)



Condominiums and timeshares are the same exact thing but marketed under different names.

25)


______


26)



Female guests more than male guests are more likely to be downstairs buyers.

26)


______


27)



Under the franchise contract, franchisees (hotel owners) can manage their own properties or hire a management company to do the job.

27)


______


28)



The conversion to condos of the world-famous Plaza Hotel in New York City is part of a nationwide movement toward condo hotels and the resurgence of residents to city-centers.

28)


______


29)



Unlike timeshares, where upkeep is the owner's responsibility, condominium upkeep and repair are the developer's costs.

29)


______


30)



In an effort to clean up the initial bad reputation of timeshares, states outlawed the placement of operating hotels next to or near to timeshare units.

30)


______


31)



Joint Ventures are partnerships of entities (such as governments, private corporations, pre-existing partnership, equity firms, etc.) rather than partnerships of individual persons.

31)


______


32)



In an effort to further segment the industry, budget hotels are sub-classified as hard budgets (low-end budgets) and upscale budgets.

32)


______


33)



Hotels must be open 24-hours each day if they are to qualify legally as a hotel.

33)


______


34)



Timeshares have outgrown their very bad reputation because reputable companies such as Hilton, Marriott and Disney have entered the field.

34)


______


35)



The growth of the world-wide Web and the simultaneous disaster of the World Trade Center, which caused a rapid fall in occupancy, helped establish new nonguest buyers such as Priceline.com.

35)


______


36)



Churning is the professional term given to butter that is offered by hotel companies that stress "green" accommodations.

36)


______


37)



Hotel chains such as Hilton grow by acquiring other hotel chains; among Hilton's recent acquisitions are Starwood and Choice.

37)


______


38)



The Hilton Corporation is primarily a landlord company (it owns the real estate) and avoids where possible the operation and management of the operating hotel.

38)


______


39)



The CMP (Corporate Meeting Package) is similar to the all-inclusive plan.

39)


______


40)



It is said that with nonguest buyers, hotels are buying guests through new marketing channels rather than selling rooms to potential guests.

40)


______


41)



Examples of "nonguests buyers" are both those who (1) negotiate rates for large blocks of potential travelers (AAA) or (2) buy a reservation for an individual traveler (travel desk).

41)


______


42)



Buying a "block of rooms" means committing to a certain number of rooms for a given number of nights.

42)


______


43)



Sources of equity funds shift from Main Street to Wall Street as projects grow in size and cost.

43)


______


44)



A REIT, a real estate investment trust, is a private equity source that a family creates to buy and sell real estate, including hotels.

44)


______


45)



C-Corporations pay income taxes on earnings; REITS do not so long as they return 90% of their profits in dividends.

45)


______


46)



Although hotel REITS cannot operate the hotels that they own, they can own as subsidiaries the companies that do operate the hotels.

46)


______


47)



Wholesalers and tour operators can sell rooms and transportation at less than the sum of the two individual prices because they buy these in large lots from the hotels and the airlines.

47)


______


48)



Hilton has launched a new brand, Waldorf=Astoria, named after the famed New York City hotel landmark, which Hilton owns.

48)


______


49)



Foreign hotel companies enter the U. S. market when the dollar is weak and U.S. companies expand overseas when the dollar is strong.

49)


______


50)



Political stability is especially important to non-USA investor in hotels because foreign investors have a long business horizon and a great appreciation of the value of real estate.

50)


______


51)



The budget hotel concept, long used in the USA, is gaining ground overseas in Europe and even in the PRC (China).

51)


______


52)



The 36/12 rule-of-thumb applies chiefly to the all-suite, extended stay hotel type.

52)


______


53)



Spas feature stress reduction and fit nicely with the appearance of new, "lifestyle" hotels, such as aloft hotels by Starwood's boutique division.

53)


______


54)



By law, hotels must accept all who come in good condition and are able and willing to pay.

54)


______


55)



Business guests are a relatively elastic market; that is, they will come to the hotel when business calls with less concern about the room rate.

55)


______


56)



Business guests are chiefly men; leisure guests are chiefly couples.

56)


______


57)



Its quite possible that the party which buys (reserves) a guest room is not a individual, not a human being.

57)


______


58)



The awards given to PGPs (preferred guest programs) can be seen to be part of amenity creep.

58)


______


59)



"Breakage" is slang for the sales manager's under-the-table (illicit) cut (his/her "break" on the deal) from the tour operator because of the special rate quoted.

59)


______


60)



Unfortunately for small hotels, tour group business from tour operators is not possible; only large hotels can handle that type of business.

60)


______


61)



Although it would be great to do, hotels are limited to one IT package per property, either a spa package; a valentine package, a golf package, etc.

61)


______


62)



IT packages must be offered with care because the hotel is competing against itself: selling the IT room at less than rack rate.

62)


______


63)



Conventions may be so large that a number of hotels as well as the publicly owned convention center may need to combine to service the group.

63)


______


64)



Convention delegates pay their own bills and book their own rooms within a block of rooms that has been reserved by a trade show executive or other nonguest buyer.

64)


______


65)



If many attendees from the same company come to the show/convention, a single entity group may be created within the convention.

65)


______


66)



Incentive tours are highly prized single entities with the "winners" expecting and receiving only the best of accommodations.

66)


______


67)



Incentive companies are nonguest buyers that place themselves between the destination resort and the company that uses the incentive to increase sales (or productivity).

67)


______


68)



Incentive companies and tour operators exert the same type of price pressure on the hotel/seller because each represents the possibility of additional and continuing business.

68)


______


69)



The ups and downs of hotel cycles can be caused by factors external to the industry, changes in income tax laws or events like 9-11, for example.

69)


______


70)



The typical profile worked up by hotels on their guests is a psychographic one; demographic profiles (age, income, gender, etc.) are more difficult to create.

70)


______


71)



Trade shows and conventions are not usually held together; in fact, some state outlaw the combination.

71)


______


72)



Hotels and conference centers alike face competition from in-house (company-owned) training centers that book other activities when not being used by the company.

72)


______


73)



Tour groups are not single entity groups because they do not exist prior to or after the trip.

73)


______


MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

74)



The kitchenette is to the ________ as the swimming pool is to the motor hotel; everyone wants it, but few use it,

74)


______

A)



mixed use project

B)



spa

C)



ll-suite hotel

D)



time share facility

E)



hard budget hotel


75)



Brand equity requires several components to be in place; which of the following is least critical to brand equity?

75)


______

A)



Instant identification

B)



Broad distribution

C)



Assured level of service

D)



Location, location, location

E)



Consistent quality


76)



Choice Hotels has many sub-brands, among which is/are:

76)


______

A)



Travelodge

B)



Howard Johnson

C)



Fairfield Inns

D)



Sleep Inn

E)



Both B and C


77)



"The Residences" at the Atlantis Hotel in the Bahamas sounds to be a:

77)


______

A)



Condominium hotel

B)



PGP, preferred guest program

C)



Modified American Plan

D)



Member of a joint venture

E)



None of the above


78)



Budget hotels compete by:

78)


______

A)



Reinforcing the brand name through additional amenities

B)



Locating on less expensive, somewhat-out-of-the-way real estate

C)



Using an employee to room ratio of 1 to 1

D)



Focusing on the quality and special characteristic of their swimming pools

E)



All of the above


79)



Which of the following is out of place in the group?

79)


______

A)



SMURF

B)



SMERF

C)



CURFF

D)



MICE

E)



None of the above; that is, the all suggest the same idea


80)



Which of the following components would NOT be in a mixed-use project?

80)


______

A)



Hotels

B)



Government

C)



Businesses

D)



Retail

E)



Entertainment


81)



Which characteristic(s) differentiate a conference center from a hotel offering meeting facilities: Conference Centers have -- but hotels do not:

81)


______

A)



Higher double occupancy

B)



Food service only for house guests

C)



Dedicated space

D)



Bundled rates

E)



All of the above


82)



Spas come in various formats just as hotels do; which of the following is not recognized as a spa type? (The question ask for a spa type, not a spa service.)

82)


______

A)



Mineral spring spa

B)



Stay spas

C)



Day spas

D)



Medical spas

E)



Mud baths & wrap spas


83)



Which of the following might be part of a guest's profile?

83)


______

A)



Membership in a group

B)



Reason for the visit

C)



Income level

D)



Frequent-guest card holder

E)



All of the above


84)



Which of the following would NOT be a nonguest buyer?

84)


______

A)



Web sites

B)



Travel company, such as American Automobile Association

C)



A travel agent

D)



A travel desk within a business complex

E)



A traveling couple


85)



Which of the following is NOT an aspect of the hotels sale to tour groups?

85)


______

A)



Free advertising for the hotel

B)



One sale books numerous rooms

C)



Reduction in bad debts

D)



Reduce credit card costs

E)



Final step in a yield management system


86)



The separation of ownership from management gained momentum from:

86)


______

A)



The creation of the corporation as a legal entity

B)



New construction techniques which allowed for larger building

C)



The inability of the individual or the immediate family to finance the equity

D)



The development of a separate management profession

E)



All of the above


87)



Equity money comes from several sources, which of the following is NOT a source for such funding?

87)


______

A)



Local and regional banks

B)



Insurance companies or union pension funds

C)



REITS

D)



The trust fund of Social Security

E)



Condominium owners themselves


88)



Which of the following is NOT a single entity group?

88)


______

A)



Traveling ball team

B)



National orchestra on tour

C)



Convention group

D)



Company sales meeting

E)



Broadway show coming to an intermediate-size city


1)



TRUE

2)



FALSE

3)



FALSE

4)



TRUE

5)



FALSE

6)



A

7)



E

8)



C

9)



B

10)



B

11)



The very environment that creates better living standards (higher wages and more vacations for all citizens) impacts hotel business profitability. To offset those costs, French hoteliers invest in properties with lower labor costs (economy properties. Of course, this is not exclusive. Upscale and mid-priced hotels continue to operate.

12)



TRUE

13)



TRUE

14)



TRUE

15)



TRUE

16)



FALSE

17)



FALSE

18)



FALSE

19)



TRUE

20)



FALSE

21)



TRUE

22)



FALSE

23)



FALSE

24)



TRUE

25)



FALSE

26)



FALSE

27)



TRUE

28)



TRUE

29)



FALSE

30)



FALSE

31)



TRUE

32)



TRUE

33)



TRUE

34)



TRUE

35)



TRUE

36)



FALSE

37)



FALSE

38)



FALSE

39)



TRUE

40)



TRUE

41)



TRUE

42)



TRUE

43)



TRUE

44)



FALSE

45)



TRUE

46)



TRUE

47)



TRUE

48)



TRUE

49)



TRUE

50)



TRUE

51)



TRUE

52)



TRUE

53)



TRUE

54)



TRUE

55)



FALSE

56)



TRUE

57)



TRUE

58)



TRUE

59)



FALSE

60)



FALSE

61)



FALSE

62)



TRUE

63)



TRUE

64)



TRUE

65)



TRUE

66)



TRUE

67)



TRUE

68)



TRUE

69)



TRUE

70)



FALSE

71)



FALSE

72)



TRUE

73)



TRUE

74)



C

75)



D

76)



D

77)



A

78)



B

79)



C

80)



B

81)



E

82)



E

83)



E

84)



E

85)



E

86)



E

87)



D

88)



C



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