Keith is the group sales manager at the 400-room full-service Tripletree Hotel. Carla is the front office manager. Together with Leona, the GM, they make the revenue management decisions for their property. For the Saturday night that is just one week away, they have 180 unsold rooms remaining. Keith would like to accept an available group contract for the entire 180 rooms at a rate of $109 per room. “We’ll sell out,” he proclaims, “and have a great RevPAR.” Carla would like to reduce the room rates to $159.00 per night; which is a $20.00 reduction from the hotel’s normal rate of $179.00. “How many rooms do you forecast we can sell at that rate?” asks Leona. “I believe we can sell about 120 of them,” is Carla’s reply. “That means we’ll leave 60 empty rooms, and a lower RevPAR,” protests Keith. It costs $35.00 to prepare, sell, and clean (prepare for resale) a room at the Tripletree. After reviewing the data, you will be asked to perform some calculations and provide a critical suggestion to Leona regarding which plan to support.
Keith is the group sales manager at the 400-room full-service Tripletree Hotel. Carla is the front office manager. Together with Leona, the GM, they make the revenue management decisions for their property. For the Saturday night that is just one week away, they have 180 unsold rooms remaining.
Keith would like to accept an available group contract for the entire 180 rooms at a rate of $109 per room. “We’ll sell out,” he proclaims, “and have a great RevPAR.”
Carla would like to reduce the room rates to $159.00 per night; which is a $20.00 reduction from the hotel’s normal rate of $179.00. “How many rooms do you forecast we can sell at that rate?” asks Leona. “I believe we can sell about 120 of them,” is Carla’s reply. “That means we’ll leave 60 empty rooms, and a lower RevPAR,” protests Keith.
It costs $35.00 to prepare, sell, and clean (prepare for resale) a room at the Tripletree.
After reviewing the data, you will be asked to perform some calculations and provide a critical suggestion to Leona regarding which plan to support.
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