Question

In: Math

A 600​-room hotel can rent every one of its rooms at $90 per room. For each​...

A 600​-room hotel can rent every one of its rooms at $90 per room. For each​ $1 increase in​ rent,

3 fewer rooms are rented. Each rented room costs the hotel​ $10 to service per day. How much should the hotel charge for each room to maximize its daily​ profit? What is the maximum daily​ profit?

Solutions

Expert Solution


Related Solutions

The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs
In Crystal BallThe Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each night a room is occupied. For each reservation accepted, there is a 5% chance that the guest will not arrive. If the hotel overbooks, it costs $200 to compensate guests whose reservations cannot be honored.How many reservations should the hotel accept if it wants to maximize the average...
Avila Hotel has 300 rooms and charges $120 per room. The hotel estimates that the demand...
Avila Hotel has 300 rooms and charges $120 per room. The hotel estimates that the demand for the rooms follows a uniform distribution between 270 and 330 each day. Reservations may be canceled by 6pm with no penalty. The hotel estimates that 3% of the reservations are canceled by 6pm. Hence, the hotel allows overbooking by 20 room (the hotel allows up to 320 customers to make reservation). When more customers arrive than can be handled (e.g., more than 300...
Problem 1 The King Hotel has 400 rooms. Each room rents for $62 per day and...
Problem 1 The King Hotel has 400 rooms. Each room rents for $62 per day and has a variable cost of $12 per day. The hotel’s monthly fixed costs are $450,000. (Assume that each month has 30 days.) Required: 1. Compute the breakeven point in rooms rented. 2. Compute the daily occupancy percentage that the hotel must have in order to break even. 3. Compute the total number of rooms that must be paid for and occupied per month to...
A small hotel has 50 rooms that rent for $105 per night and cost $45 to...
A small hotel has 50 rooms that rent for $105 per night and cost $45 to clean and prepare each night they are used. All rentals are by reservation and there is a 10% chance that an individual reservation will not show up. If a customer arrives at the hotel with a reservation and no room is available due to overbooking, the hotel will refund the cost of the room and pay $150 to put the customer up at another...
A hotel has 210 units. All rooms are occupied when the hotel charges ​$90 per day...
A hotel has 210 units. All rooms are occupied when the hotel charges ​$90 per day for a room. For every increase of x dollars in the daily room​ rate, there are x rooms vacant. Each occupied room costs $ 36 per day to service and maintain. What should the hotel charge per day in order to maximize daily​ profit?
Sleep-EZ Suites Inc., operates a downtown hotel property that has 600 rooms. On average, 90% of...
Sleep-EZ Suites Inc., operates a downtown hotel property that has 600 rooms. On average, 90% of Sleep-EZ Suites's rooms are occupied on weekdays, and 60% are occupied during the weekend. The manager has asked you to develop a direct labor budget for the housekeeping and restaurant staff for weekdays and weekends. You have determined that the housekeeping staff requires 40 minutes to clean each occupied room. The housekeeping staff is paid $10 per hour. The restaurant has 12 full-time staff...
The Hotel El Politécnico has # 500 rooms. They usually have a cost per room of...
The Hotel El Politécnico has # 500 rooms. They usually have a cost per room of $ 70.00, plus a fixed cost of $ 5,000.00 per day. Each room is rented for $ 175.00 per day during the summer season. Answer the following questions using the above data: a) If the Hotel operates at 70% capacity for one day, what is the net profit (gain / loss)? b) What is the equilibrium point (B. E. P.)? in units, if it...
Glitz hotel, a 500-room hotel, rents hotel rooms for $120/night. At the current sales level of...
Glitz hotel, a 500-room hotel, rents hotel rooms for $120/night. At the current sales level of 400 rooms per night, Glitz currently makes a profit of $30/room:                                         Per room Sales                                 $120 Costs                                     90 Profit                                    30 It costs Glitz $90/night to maintain a room ($60 in depreciation, $25 in variable maintenance and $5 in fixed booking costs). Glitz has been approached by Conventions2000.com to purchase a block of 300 rooms for $80/room per night. If this special...
Sector hotel, a 500-room hotel, rents hotel rooms for $120/night. At the current sales level of...
Sector hotel, a 500-room hotel, rents hotel rooms for $120/night. At the current sales level of 400 rooms per night, Glitz currently makes a profit of $30/room:                                    Per room Sales                          $120 Costs                              90 Profit                              30 It costs Sector $90/night to maintain a room ($60 in depreciation, $25 in variable maintenance and $5 in fixed booking costs). Sector has been approached by Conventions2000.com to purchase a block of 300 rooms for $80/room per night. If this special...
ABC hotel has 200 rooms and has a policy to determine its room rates based on...
ABC hotel has 200 rooms and has a policy to determine its room rates based on consumers capacity to pay. For example busniess 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...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT