Reference no: EM132054203

ABC , hotel has 200 rooms and has a policy to determine its room rates based on consumers capacity to pay. For example business clients pay $1,200 per night and group tours $900 per night. The incremental cost of servicing a room is worked out at $110 per room. On average, most guest stay for three (3) nights. Rooms division manager is trying to establish if four (4) week advance reservation should be taken for a group booking of 40 rooms and three (3) nights of 7th, 8th and 9th June 2018. According to the reservation record, 80 rooms for the three (3) nights of 7th, 8th, and 9th, June 2018 are already booked by various business clients, and the historical trends of the past four (4) years suggest that 90% of the reaming 120 rooms would be sold to other business clients. Your are required to: Prepare a detailed recommendation document explaining the important facts and figures to support if the group tour booking of 40 rooms for three (3) nights, of 7th, 8th and 9th June 2018 while caculating the Incremental cost and relevant cost in preparing the recommendation documents in details with the equations.