Should the decrease the room rate or not

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An airport hotel has 300 standard rooms and 200 deluxe rooms. For the month of April, if you charge $120 for the standard rooms and $180 for the deluxe room, you will have 85% occupancy for both type of room.

If decrease your room rates by 10% (i.e. on $120 and $180), occupancy for both type of room will increase to 95%.

Let there is no change to all costs.

Question 1: Should the decrease the room rate or not? calculations.

Reference no: EM132562991

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