4% 1.1% ,2.4% ,24% 44% .2015 to 206 2016 to 2017 Source: PwC, based on STR data
ID: 2598348 • Letter: 4
Question
4% 1.1% ,2.4% ,24% 44% .2015 to 206 2016 to 2017 Source: PwC, based on STR data Which response below best explains the graph above. O The three months depicted above, 03-2016 to 2017 RevPar is possibly a result of a peak in room supply and a increase in ADR. The three months depicted above, Q3-2016 to 2017 RevPar is possibly a result of a decline in room supply and an increase in ADR. The three months depicted above, Q3-2016 to 2017 RevPar is possibly a result of a increase in room supply and a decline in ADR O The three months depicted above, 03-2016 to 2017 RevPar is possibly a result of a peak in room supply and a decline in ADR.Explanation / Answer
RevPar is revenue per available room.
RevPar = ADR*occupancy rate
Where ADR = average daily room rate.
The graph shows that for the three months of July, August and September in 2016 to 2017 the RevPar growth is higher than the same period for 2015 to 2016 (even though still negative).
Increase in RevPar will happen due to increase in ADR. When room supply decreases then average daily rate will increase correspondingly.
Hence the answer is 2nd option – the three months depicted above, Q3- 2016 to 2017 RevPar is possibly a result of decline in room supply and an increase in ADR.
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