The revenue-maximizing room rate

Reference no: EM131067761

A hotel has 500 rooms. During a typical week in the holiday season, the hotel is busy on Monday, Tuesday, Wednesday, and Thursday nights, primarily with business people, but there is generally space available on Friday, Saturday, and Sunday nights.

Hotel management provided the following demand estimates, as shown in Table 8.1:

Assume linear demand functions over the range of all non-negative room rates and demands.

Room Rate	Days	Estimated Demand (rooms/days)
$160	Mon, Tue, Wed, Thur	500
	Fri, Sat, Sun	200
$175	Mon, Tue, Wed, Thur	350
	Fri, Sat, Sun	125

What is the revenue-maximizing room rate if the hotel posts only a single rate good for any day of the week? What weekly occupancy results?
What are the revenue-maximizing room rates if the hotel posts a "mid-week" rate good for the peak demand period (MTWT), and a different "weekend" rate good for Friday, Saturday, or Sunday. What is the new weekly occupancy? What is the revenue increase?
Another option is for the hotel to offer a discounted weekly rate in order to attract vacations who will stay for the full week. Management estimates that demand will be 40 per week at $900/week and 160 per week at $800/week. Again assume a linear demand curve.
If the hotel posts a weekly rate and a single daily rate (good for any night), what are the revenue-maximizing prices? What is the occupancy rate? What is the revenue gain?
If the hotel posts three rates: a mid-week rate, a weekend rate, and a weekly rate, what are the revenue-maximizing prices? What is the occupancy rate? What is the revenue gain?

Reference no: EM131067761

Questions Cloud

Active in targeting the restaurant industry : CSPI seeks to promote health through educating the public about nutrition and alcohol; it represents citizens' interests before legislative, regulatory, and judicial bodies; and it works to ensure that advances in science are used for the public's..

The grades on a short quiz in biology : The grades on a short quiz in biology were 0, I , 2, . . . , 10 points. depending on the number answered correctly out of I O questions. The mean grade was 6.7 and the standard deviation was.

Establish a plan for eliminating delays : Second, establish a plan for eliminating these delays. Finally, discuss in a 2-3 paragraph summary the importance of documentation and timeliness on reimbursement.

Emotional intelligence and leadership styles : From the first e-Activity, suggest one (1) key strategy that managers may use in order to combat workplace stress productively in today's work environment. Provide support for your strategy.

The revenue-maximizing room rate : A hotel has 500 rooms. During a typical week in the holiday season, the hotel is busy on Monday, Tuesday, Wednesday, and Thursday nights, primarily with business people, but there is generally space available on Friday, Saturday, and Sunday night..

Involves telephone conversations with policyholders : "A job in an insurance office involves telephone conversations with policyholders. The office man- ager estimates that about half of the employee's time is spent on the telephone.

What constitutes correct documentation : Discuss why documentation is so important to the discipline process. What constitutes correct documentation?

Determine the training needs of an organization : What analyses should be done to determine the training needs of an organization? After the needs are determined, what are the next steps?

Create the design of a dashboard for goodlife health clubs : Practical activity: submission of a working dashboard. Create the design of a dashboard using one of the tools shown in the practicals (Microsoft PowerBI or Tableau)

User Account

All Pages