alleryStart learning →Why do hotels and airlines often overbook if cancellations loom?
ATo reduce their fixed costs
BTo cut average daily rate
CTo fill capacity and earn more
DTo avoid price promotions
Answer & Solution
Correct answer: C. To fill capacity and earn more
Because some bookings are cancelled, selling beyond capacity helps the room or seat inventory end up full.
Keep practising Units of Measurement in Transportation
Browse all Units of Measurement in Transportation questions for CA Inter, or explore more Cost and Management Accounting topics.
Related questions
Unit costs include which costs involved in production?Yield management generates yield through which kind of inventory management?Why is revenue management useful for hospital surgery rooms?Revenue management is seen by some as synonymous with what?In hotel revenue management, what does RevPAR stand for?Revenue management mainly aims to maximize profit by adjusting pricing and managing what?ASM and ASK measure which aspect of a passenger carrier?Why does computing CASM for a single route need judgment?