Question

P6.10 The Resolute Resort hotel currently operates at 75% occupancy, using a rack rate for all rooms of $60 and a marginal cost per room sold of $ 8 . calculate the occupancy figures for discount grid using discount percentages of 5%,15%,and 20%

P6.11 Motley Motel's potential average room rate is calculated to be $62.Assume that this motel had three market segments.Vacation travelers use 75% of the room nights and are charged 100% of the rack rate. business travelers use 15% of the room nights and are charged 90% of the rack rate.sport teams acounts for 10% of the room nights and are charged 80% of the rack rate.

a. calculate the room rate by market segment.

2. Prove that your calculations are correct,assuming that total annual room nights are 7,300.

Answer 1

1	Rate	60
	Discount (%)	5	15	20
	Rate after discount	57	51	48
	Occupancy rate (%)	75	75	75
	Rooms	7500
	Occupancy figures are	3,20,625	2,86,875	2,70,000

2.Room rate per segment-

Segment	Discount	Room rate	Occupancy
Vacation travellers	5%	95%	75%
Business Travellers	15%	85%	15%
Sport teams	20%	80%	10%

Average rate per room= Rate*Occupancy*Room/ Total Rooms

62= (75%*7500*0.95X+15%*7500*0.85X+10%*7500*0.8X)/7500

62 = 0.92 x

x= 67.39 $

Standard rate= 67.39

Rate per segment wise-

Vacation travellers rate	64.02	95% of X
Business Travellers	57.28	85% of X
Sport teams	53.91	80% of X