Tourism and Hospitality Management
This domain tests management functions, hotel organisation, cost and revenue thinking, and the performance ratios used to judge a hotel.
Functions and structure
Planning, organising, staffing, directing, coordinating, controlling. Revenue centres: rooms, food and beverage, banquet, spa. Cost centres: housekeeping, HR, accounts, engineering, security. Line managers command; staff functions advise.
Performance ratios
- Occupancy % = rooms sold ÷ rooms available × 100.
- ADR (average daily rate) = room revenue ÷ rooms sold.
- RevPAR = room revenue ÷ rooms available = ADR × occupancy.
Worked example
A 100-room hotel sells 70 rooms and earns ₹4,20,000 in room revenue. ADR = 4,20,000 ÷ 70 = ₹6,000. Occupancy = 70%. RevPAR = 4,20,000 ÷ 100 = ₹4,200, which also equals 6,000 × 0.70. Reasoning: selling 80 rooms at ₹5,000 gives RevPAR of ₹4,000 - lower despite higher occupancy, so judge by RevPAR, not occupancy alone.
Traps that cost marks
- Dividing room revenue by guests instead of rooms.
- Using rooms available in ADR and rooms sold in RevPAR.
- Calling housekeeping a revenue centre.
- Forgetting that Indian star classification is voluntary and awarded by the Ministry of Tourism.