Question

Mr. Tanner, the manager of the Spruce Resort, has requested your assistance in forecasting the lodging and food service operations sales for April. The resort has single and double guestrooms.

Number of guestrooms = 100

Number of dining room sales = 80

Estimated paid occupancy percentage = 80%

Double occupancy percentage = 60%

Average daily rate = $120

Average double room rate = single room rate + $20

Average occupancy per room

     Single = 1

     Double = 2.2

Breakfast sales capture ratios:

     Single room occupants = 40%

     Double room occupant = 80%

Lunch sales seat turnover = 1.3 times

Dinner sales seat turnover = .8 times

Average service check for breakfast = $8.95

Average service check for lunch = $12.50

Average service check for breakfast = $16.95

What is the average single room rate?

Forecast the room sales for April.

Forecast the food service sales for April for each meal period.

Answer 1

a. Let the average single room rate be x.

Then the average double room rate would be x + 20.

Weighted average daily rate = $120 (Given)

120 = x * 40% + (x + 20) * 60%

x = $108

Therefore, the average single room rate is $108.

b. Expected single occupancy = 100 rooms x 80% x 40%

= 32 single guestrooms

Expected double occupancy = 100 rooms x 80% x 60%

= 48 double guestrooms

Expected sales of April = (32 x 108 + 48 x 128) x 30 days

= $288,000

c. It has been assumed that there is a typo in the question and that "number of dining room sales" must be read as "number of dining room seats".

Expected average number of occupants in single guestrooms = 32 x 1 = 32 occupants

Expected average number of occupants in double guestrooms = 48 x 2.2 = 105.6 occupants

Expected breakfast sales = (32 occupants x 40% x $8.95 + 105.6 occupants x 80% x $8.95) x 30 days

= $26,119.68

Lunch sales seat turnover ratio = total lunch sales (in number of seats) / total number of seats

1.3 = total lunch sales / 80

Total lunch sales (Daily Average) = 104 sales

Total expected lunch sales of April = 104 x $12.50 x 30 days

= $39,000

Similarly,

Dinner sales (Daily average) = 80 seats x 0.8

= 64 dinner sales

Total expected dinner sales of April = 64 x $16.95 x 30 days

= $32,544

Therefore, the expected food service sales for April for each meal are as follows:

Breakfast: $26,119.68

Lunch: $39,000

Dinner: $32,544