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AHLEI CHRM practice questions

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Question 1Revenue Management Fundamentals and Concepts

Which metric is calculated by dividing total room revenue by the number of rooms sold?

  1. Average daily rate Correct answer.
  2. Revenue per available room
  3. Total revenue per available room
  4. Occupancy percentage

Explanation

Average daily rate (ADR) is total room revenue divided by rooms sold, expressing the average price actually achieved per occupied room. It isolates price performance from volume performance.

Question 2Revenue Management Fundamentals and Concepts

A hotel has 200 rooms and sold 150 of them last night. What was its occupancy percentage?

  1. 80 percent
  2. 67 percent
  3. 75 percent Correct answer.
  4. 25 percent

Explanation

Occupancy percentage equals rooms sold divided by rooms available: 150 divided by 200 equals 0.75, or 75 percent.

Question 3Revenue Management Fundamentals and Concepts

Revenue per available room (RevPAR) can be computed two ways. Which pair of formulas is correct?

  1. ADR divided by occupancy percentage, or room revenue divided by rooms sold
  2. ADR times occupancy percentage, or room revenue divided by rooms available Correct answer.
  3. Occupancy percentage divided by ADR, or rooms sold divided by rooms available
  4. ADR times rooms available, or room revenue times occupancy percentage

Explanation

RevPAR equals ADR multiplied by occupancy percentage, and equivalently equals total room revenue divided by rooms available. Both expressions capture revenue generated per available room.

Question 4Revenue Management Fundamentals and Concepts

Why is RevPAR generally considered a better single performance indicator than occupancy percentage alone?

  1. It reflects food and beverage and other ancillary revenues
  2. It excludes the effect of room rate from the calculation
  3. It combines both price and volume into one measure of room revenue productivity Correct answer.
  4. It is the only metric that regulators require hotels to report

Explanation

RevPAR captures both the rate achieved and the share of rooms sold, so a hotel cannot appear strong merely by filling rooms at deeply discounted prices. Occupancy alone ignores price.

Question 5Revenue Management Fundamentals and Concepts

A 100-room hotel sells 70 rooms at an ADR of 120 dollars. What is its RevPAR?

  1. 120 dollars
  2. 171 dollars
  3. 84 dollars Correct answer.
  4. 70 dollars

Explanation

Occupancy is 70 divided by 100, or 70 percent. RevPAR equals ADR times occupancy: 120 times 0.70 equals 84 dollars.

Question 6Revenue Management Fundamentals and Concepts

What does TRevPAR measure that RevPAR does not?

  1. The average length of stay of guests
  2. Only the rooms department's revenue per occupied room
  3. The net profit remaining after fixed costs
  4. Total revenue from all revenue centers per available room Correct answer.

Explanation

TRevPAR divides total revenue across all departments, including food and beverage and other outlets, by the number of available rooms. RevPAR is limited to rooms revenue.

Question 7Revenue Management Fundamentals and Concepts

Which term describes the percentage of available rooms that were actually occupied over a period?

  1. Inventory turnover
  2. Yield
  3. Occupancy percentage Correct answer.
  4. Average daily rate

Explanation

Occupancy percentage is rooms sold divided by rooms available for the period. It is the standard measure of demand capture against capacity.

Question 8Revenue Management Fundamentals and Concepts

Which of the following best describes the purpose of revenue management in a hotel?

  1. Maximizing the number of rooms sold regardless of rate
  2. Selling the right room to the right customer at the right time for the right price Correct answer.
  3. Reducing the number of distribution channels used by the hotel
  4. Minimizing operating expenses in the housekeeping department

Explanation

Revenue management allocates limited room inventory across segments, dates, and price points to maximize total revenue. It balances rate and volume rather than pursuing either alone.

Question 9Revenue Management Fundamentals and Concepts

A hotel's RevPAR index (fair share) is 110. What does this indicate?

  1. The hotel's ADR is 110 dollars above the market average
  2. The hotel's occupancy exceeded 110 percent
  3. The hotel sold 110 percent more rooms than its largest competitor
  4. The hotel captured 110 percent of the room revenue its competitive set would predict Correct answer.

Explanation

A RevPAR index compares the hotel's RevPAR to the competitive set's RevPAR, scaled to 100. An index of 110 means the hotel achieved 10 percent more RevPAR than its fair share.

Question 10Revenue Management Fundamentals and Concepts

In revenue management terms, what is a displacement analysis used to evaluate?

  1. Whether accepting a group booking would generate more revenue than the transient business it would replace Correct answer.
  2. Whether a competitor's rate should be matched on a specific date
  3. Whether the hotel should renovate its lobby
  4. Whether housekeeping staff can clean rooms within a shift

Explanation

Displacement analysis compares the revenue from a proposed piece of group business against the revenue likely lost from transient demand that would otherwise occupy those rooms. It protects against accepting business that lowers total revenue.

Question 11Revenue Management Fundamentals and Concepts

Which concept holds that a room not sold on a given night represents revenue that can never be recovered?

  1. Price elasticity
  2. Market segmentation
  3. Length-of-stay control
  4. Perishability of inventory Correct answer.

Explanation

Hotel rooms are perishable inventory: an unsold room on a specific date has no salvage value later. This drives the practice of adjusting price and restrictions to capture demand before the date passes.

Question 12Revenue Management Fundamentals and Concepts

A hotel raises its room rate by 10 percent and occupancy falls by only 3 percent. What is the most likely effect on room revenue?

  1. Room revenue is unchanged because price and volume offset exactly
  2. Room revenue rises because the rate gain outweighs the small volume loss Correct answer.
  3. Room revenue cannot be determined without knowing fixed costs
  4. Room revenue falls because any occupancy decline reduces revenue

Explanation

Revenue is price times volume; a 10 percent rate gain with only a 3 percent volume loss produces a net revenue increase. The demand response here is inelastic enough that the higher rate wins.

Question 13Revenue Management Fundamentals and Concepts

What is the primary role of a competitive set (comp set) in revenue management?

  1. To determine the hotel's staffing levels
  2. To provide a benchmark against which a hotel's rate and RevPAR performance are measured Correct answer.
  3. To guarantee the hotel's occupancy will match the market
  4. To set the legal minimum rate a hotel may charge

Explanation

A comp set is a group of comparable hotels used to benchmark rate, occupancy, and RevPAR performance. Indexes against the comp set reveal whether the hotel is gaining or losing market share.

Question 14Revenue Management Fundamentals and Concepts

Which practice involves setting different prices for the same room type based on booking conditions such as advance purchase or refundability?

  1. Dynamic staffing
  2. Rate fencing Correct answer.
  3. Cost-plus pricing
  4. Uniform pricing

Explanation

Rate fencing uses conditions such as advance purchase, nonrefundability, or minimum stay to separate customers by willingness to pay. It lets a hotel offer lower prices to price-sensitive guests without eroding higher-rate business.

Question 15Revenue Management Fundamentals and Concepts

A hotel forecasts 120 rooms of demand for a night but has only 100 rooms available. Which action best supports revenue maximization?

  1. Accept every group request regardless of rate
  2. Reduce the length-of-stay restrictions to attract more bookings
  3. Lower rates to fill any remaining rooms quickly
  4. Close all discount segments and hold inventory for the highest-paying demand Correct answer.

Explanation

When demand exceeds capacity, the hotel should protect inventory for higher-value business and restrict lower-rated segments. Discounting or loosening restrictions would sell scarce rooms too cheaply.

Question 16Revenue Management Fundamentals and Concepts

What does a length-of-stay restriction, such as a two-night minimum, primarily aim to achieve?

  1. Eliminating the need for a demand forecast
  2. Increasing revenue per available room by blocking low-value single-night stays on high-demand dates Correct answer.
  3. Reducing the hotel's housekeeping costs permanently
  4. Guaranteeing that all guests extend their stays

Explanation

Minimum-stay restrictions on high-demand dates prevent single-night bookings from fragmenting inventory and can increase total room nights and revenue. They protect shoulder dates adjacent to sold-out nights.

Question 17Revenue Management Fundamentals and Concepts

Which statement best distinguishes ADR from RevPAR?

  1. ADR measures revenue per available room, while RevPAR measures price per occupied room
  2. ADR and RevPAR are identical when occupancy is 100 percent and differ otherwise in the same way
  3. ADR includes food and beverage revenue, while RevPAR includes only rooms revenue
  4. ADR measures price per occupied room, while RevPAR measures revenue per available room Correct answer.

Explanation

ADR reflects only the rate achieved on rooms actually sold, while RevPAR accounts for both rate and the proportion of rooms sold. RevPAR therefore equals ADR only when occupancy is 100 percent.

Question 18Revenue Management Fundamentals and Concepts

A hotel's ADR is 150 dollars, occupancy is 80 percent, and it has 250 rooms. What is total room revenue for the night?

  1. 24,000 dollars
  2. 30,000 dollars Correct answer.
  3. 12,000 dollars
  4. 37,500 dollars

Explanation

Rooms sold equal 250 times 0.80, or 200 rooms. Room revenue equals 200 rooms times 150 dollars, or 30,000 dollars.

Question 19Revenue Management Fundamentals and Concepts

Which market segment characteristic is most useful when deciding which business to accept on a high-demand night?

  1. The segment's average age
  2. The segment's preferred newspaper
  3. The segment's typical arrival day of week only
  4. Contribution to revenue per room night and displacement of higher-rate demand Correct answer.

Explanation

On constrained dates, revenue managers compare the revenue each segment generates per room night against what would be displaced. Segments that pay less than displaced demand should be restricted.

Question 20Revenue Management Fundamentals and Concepts

What is the primary function of a demand forecast in revenue management?

  1. To record actual revenue after the month closes
  2. To determine the hotel's property tax liability
  3. To replace the need for a competitive set
  4. To project rooms demand by date so that pricing and inventory controls can be set in advance Correct answer.

Explanation

Forecasts estimate unconstrained and constrained demand by date and segment, enabling proactive pricing and inventory decisions. They are forward-looking planning tools, not historical records.

Question 21Revenue Management Fundamentals and Concepts

A hotel consistently achieves high occupancy but a RevPAR index below 100. What is the most plausible explanation?

  1. It is pricing below its competitive set and winning volume at the expense of rate Correct answer.
  2. It is charging premium rates and losing occupancy
  3. Its food and beverage revenue is unusually high
  4. Its comp set has unusually low occupancy

Explanation

An index below 100 means the hotel earns less RevPAR than its fair share. High occupancy paired with weak RevPAR typically signals discounting that buys volume without adequate rate.

Question 22Revenue Management Fundamentals and Concepts

Which of the following is the best example of a revenue management inventory control?

  1. Negotiating a contract with a laundry vendor
  2. Setting a minimum-stay requirement over a sold-out weekend Correct answer.
  3. Reordering linens for the housekeeping department
  4. Scheduling front-desk staff for the morning shift

Explanation

Inventory controls govern how rooms are made available for sale, including minimum-stay rules, closed rate codes, and allotment limits. They directly shape which demand can book.

Question 23Revenue Management Fundamentals and Concepts

A group requests 50 rooms for three nights at a rate well below the hotel's forecasted transient rate on those dates. Which analysis should determine whether to accept?

  1. Checking whether the group's arrival date falls on a weekday
  2. Confirming that the group will use the hotel's restaurant
  3. Comparing the group's total revenue against the transient revenue the rooms would otherwise earn Correct answer.
  4. Comparing the group's rate to last year's group rate only

Explanation

The decision hinges on displacement: whether the group's total contribution exceeds the transient revenue lost on those dates. Only a full displacement comparison captures the net revenue effect.

Question 24Revenue Management Fundamentals and Concepts

What is the relationship between occupancy, ADR, and RevPAR?

  1. RevPAR equals occupancy percentage divided by ADR
  2. RevPAR equals ADR plus occupancy percentage
  3. RevPAR equals ADR divided by occupancy percentage
  4. RevPAR equals ADR multiplied by occupancy percentage Correct answer.

Explanation

RevPAR is the product of average daily rate and occupancy percentage. This identity links the two drivers of rooms revenue productivity.

Question 25Revenue Management Fundamentals and Concepts

A hotel wants to increase total revenue even though room demand is flat. Which strategy is most consistent with revenue management principles?

  1. Growing revenue per guest through packages and ancillary spending while protecting room rate integrity Correct answer.
  2. Eliminating all length-of-stay restrictions
  3. Cutting room rates sharply to raise occupancy
  4. Reducing the number of room types offered

Explanation

When room demand is inelastic, revenue growth comes from increasing spend per guest and total revenue per available room rather than chasing volume with discounts. Packages and ancillary sales raise TRevPAR without eroding rate.

Question 26Revenue Management Fundamentals and Concepts

Which metric represents total room revenue divided by the number of rooms available for sale?

  1. ADR
  2. Occupancy rate
  3. TRevPAR
  4. RevPAR Correct answer.

Explanation

RevPAR (revenue per available room) is calculated by dividing total room revenue by the number of available rooms, or by multiplying ADR by occupancy rate. It combines both rate and occupancy into a single performance measure.

Question 27Revenue Management Fundamentals and Concepts

A hotel has 200 rooms, sells 160 rooms, and achieves an ADR of $120. What is its RevPAR?

  1. $120
  2. $75
  3. $96 Correct answer.
  4. $150

Explanation

RevPAR equals ADR multiplied by occupancy. Occupancy is 160/200 = 0.80, so RevPAR = $120 × 0.80 = $96. Alternatively, total room revenue ($19,200) divided by available rooms (200) also yields $96.

Question 28Revenue Management Fundamentals and Concepts

Which of the following best defines the competitive set (comp set) in hotel revenue management?

  1. A group of hotels owned by the same parent company
  2. The set of room types within a single hotel that compete for the same guests
  3. A group of hotels that compete for the same guests and are used for performance benchmarking Correct answer.
  4. A list of all hotels in the same city regardless of segment or price

Explanation

A competitive set is a selected group of hotels that are comparable in location, product, and price and that compete for the same demand. It is used to benchmark performance through metrics such as RevPAR index and fair share.

Question 29Revenue Management Fundamentals and Concepts

What does a hotel's RevPAR index of 95 indicate?

  1. The hotel's total revenue is 95 percent of the comp set's total revenue
  2. The hotel's ADR is 95 percent of the comp set's ADR
  3. The hotel's occupancy is 95 percent
  4. The hotel is capturing 95 percent of its fair share of room revenue compared with its competitive set Correct answer.

Explanation

RevPAR index (fair share) compares a hotel's RevPAR to the competitive set's RevPAR. An index of 95 means the hotel achieved 95 percent of the RevPAR expected based on its fair share, indicating underperformance relative to the comp set.

Question 30Revenue Management Fundamentals and Concepts

A hotel's ADR is $150, its occupancy is 75 percent, and it has 300 rooms. What is its total room revenue for the night?

  1. $11,250
  2. $33,750 Correct answer.
  3. $45,000
  4. $22,500

Explanation

Total room revenue equals rooms sold multiplied by ADR. Rooms sold = 300 × 0.75 = 225; revenue = 225 × $150 = $33,750.

Question 31Revenue Management Fundamentals and Concepts

Which of the following best describes the purpose of a displacement analysis in hotel revenue management?

  1. To determine the optimal staffing levels for the housekeeping department
  2. To evaluate whether accepting a group or contract booking would displace higher-revenue transient business Correct answer.
  3. To calculate the hotel's break-even occupancy point
  4. To forecast the hotel's cash flow for the upcoming quarter

Explanation

Displacement analysis compares the revenue from a prospective group or contract booking with the revenue that would be lost if that booking displaces higher-rated transient demand. It helps revenue managers decide whether to accept group business on high-demand dates.

Question 32Revenue Management Fundamentals and Concepts

Which statement correctly describes the relationship among occupancy, ADR, and RevPAR?

  1. RevPAR is the sum of ADR and occupancy
  2. RevPAR is always equal to ADR when occupancy is 100 percent
  3. RevPAR increases only when occupancy increases, regardless of ADR
  4. RevPAR can be calculated by multiplying ADR by occupancy Correct answer.

Explanation

RevPAR is mathematically derived as ADR multiplied by occupancy rate. This identity shows that RevPAR captures both the price achieved and the proportion of rooms sold.

Question 33Revenue Management Fundamentals and Concepts

A hotel forecasts 100 rooms of demand for a night but has 120 rooms available. Which action best supports revenue maximization?

  1. Increase advertising to fill the remaining rooms
  2. Close discounts and sell remaining rooms at the highest available rate Correct answer.
  3. Offer free upgrades to all guests
  4. Reduce rates to stimulate additional demand

Explanation

With demand forecast below capacity, the hotel should focus on maximizing rate for the rooms it can sell rather than chasing incremental occupancy with discounts. Closing lower rate categories helps protect rate integrity and capture the highest willingness to pay.

Question 34Revenue Management Fundamentals and Concepts

A hotel raises its room rate by 8 percent and occupancy falls by 2 percent. What is the most likely effect on RevPAR?

  1. RevPAR will increase Correct answer.
  2. RevPAR will decrease
  3. RevPAR will remain unchanged
  4. RevPAR will decrease by exactly 2 percent

Explanation

RevPAR is ADR times occupancy. If ADR rises by 8 percent and occupancy falls by only 2 percent, the net effect is an increase in RevPAR (approximately 5.8 percent), because the rate gain outweighs the occupancy loss.

Question 35Revenue Management Fundamentals and Concepts

Which of the following best describes the concept of rate fencing in revenue management?

  1. Using restrictions such as advance purchase or nonrefundability to separate customer segments and prevent dilution Correct answer.
  2. Limiting the number of rooms sold to group business
  3. Setting a single fixed rate for all guests regardless of booking conditions
  4. Physically fencing off certain rooms to create exclusivity

Explanation

Rate fencing uses conditions like advance purchase, minimum stay, or cancellation penalties to make lower rates unattractive to high-willingness-to-pay guests. This allows a hotel to offer multiple price points without cannibalizing higher rates.

Question 36Revenue Management Fundamentals and Concepts

A hotel has 150 rooms. On a given night, it sells 120 rooms at an ADR of $180. What is the hotel's RevPAR?

  1. $180
  2. $144 Correct answer.
  3. $120
  4. $216

Explanation

RevPAR = ADR × occupancy. Occupancy = 120/150 = 0.80, so RevPAR = $180 × 0.80 = $144. Alternatively, total room revenue ($21,600) divided by available rooms (150) equals $144.

Question 37Revenue Management Fundamentals and Concepts

Which statement best explains why a hotel might use a hurdle rate in revenue management?

  1. To establish the maximum rate that can be charged on a sold-out night
  2. To calculate the cost of acquiring a new customer
  3. To determine the average rate paid by all guests over a year
  4. To set a minimum acceptable rate for a given date so that lower-rated business does not displace higher-rated demand Correct answer.

Explanation

A hurdle rate is the minimum rate a hotel is willing to accept for a room on a specific date, based on forecasted demand and expected higher-rated business. It helps revenue managers evaluate whether to accept lower-rated group or discount business.

Question 38Revenue Management Fundamentals and Concepts

Which statement best defines the breakeven occupancy for a hotel?

  1. The occupancy level at which average daily rate equals the competitive set average
  2. The occupancy level at which total room revenue equals total fixed costs only
  3. The occupancy level at which the hotel achieves its budgeted profit target
  4. The occupancy level at which total room revenue equals total operating costs, both fixed and variable Correct answer.

Explanation

Breakeven occupancy is the point where the rooms department's revenue exactly covers its total costs, including both fixed and variable components, so profit is zero. Below this level the hotel loses money on rooms; above it each additional occupied room contributes to profit.

Question 39Revenue Management Fundamentals and Concepts

A hotel has 200 rooms and forecasts demand of 180 rooms for a given night at an ADR of $150. It receives a group request for 40 rooms at $100. If the group displaces 40 rooms of the forecasted transient demand, what is the net revenue effect of accepting the group?

  1. A gain of $2,000
  2. A loss of $2,000 Correct answer.
  3. No change in revenue
  4. A gain of $6,000

Explanation

Displacement compares the revenue of the new business with the revenue of the demand it pushes out. The group yields 40 rooms at $100 ($4,000), while the displaced transient business would have yielded 40 rooms at $150 ($6,000), so accepting the group reduces revenue by $2,000.

Question 40Revenue Management Fundamentals and Concepts

A hotel's revenue manager observes that raising rates on peak nights has little effect on occupancy, while on shoulder nights a small rate increase sharply reduces bookings. Which concept best explains this pattern?

  1. Rate fencing should be removed on peak nights to capture more group business
  2. Price elasticity of demand varies by period, so rate increases should be concentrated where demand is inelastic Correct answer.
  3. Length-of-stay controls should be applied equally across all nights
  4. RevPAR index should be used to set rates on each individual night

Explanation

Elasticity measures how responsive demand is to price changes. When demand is inelastic, as on peak nights with limited substitutes, rates can rise with little loss of occupancy, whereas elastic shoulder demand falls quickly with higher rates. Revenue managers therefore push rate hardest where demand is least price-sensitive.

Question 41Revenue Management Strategy and Analysis

A hotel's revenue management team is defining the set of products it sells, such as room-only, bed-and-breakfast, and packages. Which term best describes this set of products offered at different price points?

  1. Product mix Correct answer.
  2. Channel manager
  3. Rate fence
  4. Inventory block

Explanation

The product mix is the combination of products and rate plans a hotel offers to different guest segments. Rate fences are the rules that restrict who can buy a given rate, not the set of products themselves.

Question 42Revenue Management Strategy and Analysis

Which metric represents rooms sold divided by rooms available for a given period?

  1. Revenue per available room
  2. Total revenue
  3. Average daily rate
  4. Occupancy percentage Correct answer.

Explanation

Occupancy percentage measures the proportion of available rooms that were sold during the period. ADR measures average price per occupied room, and RevPAR combines price and occupancy.

Question 43Revenue Management Strategy and Analysis

A hotel has 200 rooms and sells 150 of them at an average daily rate of $120. What is RevPAR?

  1. $160
  2. $80
  3. $120
  4. $90 Correct answer.

Explanation

RevPAR equals ADR multiplied by occupancy, or room revenue divided by available rooms. Occupancy is 150/200 = 0.75, so RevPAR is $120 x 0.75 = $90.

Question 44Revenue Management Strategy and Analysis

What does GOPPAR measure?

  1. Gross operating profit per available room Correct answer.
  2. Total revenue per available room
  3. Room revenue per occupied room
  4. Net income per occupied room-night

Explanation

GOPPAR divides gross operating profit by the number of available rooms, capturing profitability rather than just top-line revenue. It is useful because it reflects cost control as well as revenue generation.

Question 45Revenue Management Strategy and Analysis

Which distribution channel typically carries the highest cost of acquisition for a hotel?

  1. Third-party online travel agency Correct answer.
  2. Corporate negotiated account
  3. Direct website booking
  4. Walk-in at the front desk

Explanation

Third-party OTAs charge commission on each booking, making them a comparatively expensive channel relative to direct channels. Direct and walk-in bookings generally avoid third-party commission.

Question 46Revenue Management Strategy and Analysis

A rate that requires a nonrefundable advance purchase is an example of what revenue management concept?

  1. Rate fencing Correct answer.
  2. Overbooking
  3. Best available rate
  4. Displacement analysis

Explanation

Rate fencing uses conditions such as advance purchase or nonrefundability to segment demand and prevent one segment from buying a rate intended for another. The restriction qualifies the guest for the lower rate.

Question 47Revenue Management Strategy and Analysis

In revenue management, what is the primary purpose of a forecast?

  1. To set the hotel's annual marketing budget
  2. To determine employee shift schedules only
  3. To predict demand so pricing and inventory decisions can be made in advance Correct answer.
  4. To calculate the property's property tax liability

Explanation

Forecasting estimates future demand by segment and date so that pricing, inventory controls, and overbooking decisions can be set proactively. It is the foundation for most revenue management decisions.

Question 48Revenue Management Strategy and Analysis

Which of the following best describes the 'best available rate' (BAR)?

  1. The rate reserved for group business
  2. The highest rate the hotel ever charges
  3. The rate offered only to loyalty members
  4. The lowest rate available to any guest with no restrictions Correct answer.

Explanation

BAR is the lowest unrestricted rate available to the general public on a given date. It serves as a reference point against which restricted and negotiated rates are positioned.

Question 49Revenue Management Strategy and Analysis

A hotel has 300 rooms and sold 240 rooms, generating $28,800 in room revenue. What is the ADR?

  1. $96
  2. $80
  3. $144
  4. $120 Correct answer.

Explanation

ADR equals room revenue divided by rooms sold. Dividing $28,800 by 240 rooms sold gives $120.

Question 50Revenue Management Strategy and Analysis

A group requests 50 rooms for three nights at $100 per night, but accepting the group would require turning away 50 transient rooms at $150 per night on each of those nights. Ignoring other costs, what is the net revenue impact of accepting the group?

  1. A gain of $7,500
  2. A gain of $15,000
  3. A loss of $7,500 Correct answer.
  4. A loss of $15,000

Explanation

Group revenue is 50 x 3 x $100 = $15,000. Displaced transient revenue is 50 x 3 x $150 = $22,500. The difference is a $7,500 loss, so the group displaces higher-value business.