Future Business Leaders of America (FBLA) Hospitality Management Practice Test

What is the primary income source for a commercial recreation facility?

1. Donations from community members

2. Fees paid by guests for services

3. Salaries from time-shares

4. Grants from government programs

The correct answer is: Fees paid by guests for services

The primary income source for a commercial recreation facility typically stems from the fees paid by guests for services. This revenue model is fundamental as it directly relates to the services offered, such as entrance fees, rentals, memberships, or activity charges. These fees are essential for the operational sustainability of the facility, allowing it to cover costs, maintain equipment, and pay staff. Commercial recreation facilities are businesses that rely on transactions with customers; therefore, the revenue generated from providing experiences or services is critical to their financial health. Unlike donations or grants—which may provide supplemental funding—guest fees represent a reliable and predictable income stream that facilitates long-term planning and investment in the facility. In contrast, other options like community donations and government grants are not as consistent or reliable, making them secondary income sources that organizations cannot depend on for daily operations. Salaries from time-shares refer more to earnings provided to employees rather than income generated for the facility itself and do not directly contribute to operational revenue. Hence, the focus on fees paid by guests underscores the commercial aspect of recreation facilities as businesses.