Question

Problem 17

The Hodges, a 300-room hotel, has provided you with the following data for the months of June and July:

                                                                 June                    July

                            Single rooms sold                  2,400                   2,418

                            Double rooms sold                4,200                   4,278

                            Room revenue                    $396,000                       $339,000

                            Number of paid guests 9,900                   9,910

Required:

1. Compute the following for June and July.
   1. Paid occupancy percentage
   2. Multiple occupancy percentage
   3. Average number of guests per double room sold (assume that only one guest stayed in each single room sold)
   4. Monthly ADR
   5. Monthly RevPar

2. Was the Hodges financial performance better in June or July? (Assume that fixed costs were constant and that the variable costs per room sold remained constant. Support your answer with detailed discussion.

Answer 1

a &b

	June	July
No of days	30.00	31.00
Total rooms	100.00	100.00
Rooms per month	3000.00	3100.00
Single rooms sold	2400.00	2418.00
Double rooms sold	4200.00	4278.00
Total rooms occupied	6600.00	6696.00
Paid occupancy [Total rooms occupied /Rooms per month]	220%	216%
Multiple occupancy percentage [Double rooms sold/ Total rooms occupied]	64%	64%

c.

	June	July
No of paid guests	9900.00	9910.00
Less: No of single rooms	2400.00	2418.00
No of guests of double rooms	7500.00	7492.00
No of double rooms sold	4200.00	4278.00
Average number of guests per double room	1.79	1.75

d.

	June	July
Revenue	396000.00	339000.00
Total rooms occupied	6600.00	6696.00
ADR for June [Revenue / Total rooms occupied]	60.00	50.63

e.

	June	July
Revenue	396000.00	339000.00
No of rooms available	3000.00	3100.00
RevPAR [Revenue/ No of rooms available]	132.00	109.35

The financial performance was better in June than July since the RevPAR and ADR both were higher when compared to July. Also the occupancy was higher in June when compared to July.