What is the difference between a hotel revenue center and cost center?

Asked By: Tomeu Olguin | Last Updated: 17th June, 2020
Category: business and finance hospitality industry
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Revenue centers generate revenue through sales and marketing activities. Expense centers are responsible for producing products or providing services against budgeted cost targets. In traditional management theory, revenue centers contribute to profit while expense centers reduce profit.

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Also know, which is a revenue center in a hotel?

Distinctly identifiable department, division, or unit of a firm that generates revenue through sale of goods and/or services. For example, rooms department and food-and-beverages department of a hotel are its revenue centers. See also cost center and profit center.

Additionally, what is an example of a cost center? Examples. Cost centers are typical business units that incur costs but only indirectly contribute to revenue generation. For example, consider a company's legal department, accounting department, research and development, advertising, marketing, and customer service a cost center.

Also to know is, which is a revenue center in a hotel quizlet?

Also referred to as the guest service department. What is the difference between a hotel revenue center and cost center? A hotel revenue center generates income for the hotel through the sale and services of products to guests.

What do you mean by cost center?

A cost center is a department or function within an organization that does not directly add to profit but still costs the organization money to operate. Cost centers only contribute to a company's profitability indirectly, unlike a profit center, which contributes to profitability directly through its actions.

39 Related Question Answers Found

What is the largest department in a hotel?

the largest, and usually most profitable, division in a hotel. it typically consists of four departments: front office, reservations, housekeeping, and uniformed service.

What is considered a cost center department in a hotel?

departments or units which generate direct. income to the hotel through the provision of goods and services to guests, e.g. front. desk, restaurants, room service, gift shop and business center. Cost centers', which are also interpreted as. 'support centers', mainly assist the functioning.

What is House limit?

In accommodations parlance, the house limit refers to the maximum amount the hotel will allow on credit before requesting payment.

What major divisions are typically found in a large hotel?


What main divisions are typically found in the organization of a full service hotel? F&B, Rooms, Front Office, Sales and marketing, accounting, engineering and maintenance, HR, Security. Can often include casino, retail, recreation.

What do you mean by revenue?

In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Some companies receive revenue from interest, royalties, or other fees.

What are some of the duties of a front desk agent?

A few of the main duties of a front desk agent are greeting guests at the front desk, answering any questions, recommending activities and restaurants to guests, and answering any phone calls. They also have to store any luggage as needed by guests.

What two departments comprise the rooms division?

the rooms division consists of the following departments: front office, reservations, housekeeping, concierge, guest services, security, and commu- nications.

What is the difference between a revenue center and a support center?

Explanation: Revenue centers generate revenue through sales and marketing activities. Expense centers are responsible for producing products or providing services against budgeted cost targets. In traditional management theory, revenue centers contribute to profit while expense centers reduce profit.

What is capture rate in hospitality?


Capture Rate. In hotel food and beverage practice, the number of hotel guests who use the food and beverage outlets.

How has the hospitality industry changed?

Over the past 20 years, many facets of the hotel industry have shifted to adapt to new technology and changing consumer behavior, which have in turn changed how hoteliers conduct business.

What is the primary advantage of licensing?

The primary advantage of licensing is that the firm does not have to bear the development costs and risks associated with opening a foreign market.

What is a basic difference between clubs and hotels?

2. What is the difference in your opinion between running a club and a hotel? Club teams are typically smaller than hotels but handle many more personal issues as all members feel that they are stake holders in the Club. It is vital therefore that a Club Manager is visible in the Club and is seen on the premises.

Which of the following generates the major share of hotel revenue?

Catered food and beverage generates the major share of hotel revenue, so this is often the biggest concern to hotels.

What is the largest segment of the restaurant industry?


The largest segment of the restaurant industry is: eating and drinking places.

When a guest uses a credit card to secure their room it is referred to as a?

hospitality today-hotel organization and management
Question Answer
Revenue per available room (RevPAR) is a key indicator used to: Determine the revenue per available room and compare to other properties
When a guest uses a credit card to secure their room it is referred to as a Guaranteed room

What are some of the various ways hotels can be owned and operated?

There are four basic types of hotel ownership and management: franchise, privately owned and operated, leased and managed. A franchise operation is privately owned, but the owner pays an up-front fee to purchase the franchise along with ongoing royalties.