Concur Technologies, Inc., is a large expense-management company located in Redmond, Washington.  The Wall Street Journal asked Concur to examine the data from 8.3 million expense reports to provide insights regarding business travel expenses. Their analysis of the data showed that New York was the most expensive city, with an average daily hotel room rate of $198 and an average amount spent on entertainment, including group meals and tickets for shows, sports, and other events, of $172. In comparison, the U.S. averages for these two categories were $89 for the room rate and $99 for entertainment. The table in the Excel Online file below shows the average daily hotel room rate and the amount spent on entertainment for a random sample of 9 of the 25 most visited U.S. cities (The Wall Street Journal, August 18, 2011). Construct a spreadsheet to answer the following questions.

1. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables?

   The scatter diagram indicates a  _________negativepositive linear relationship between the hotel room rate and the amount spent on entertainment.

2. Develop the least squares estimated regression equation.

        (to 4 decimals)

3. Provide an interpretation for the slope of the estimated regression equation (to 3 decimals).

   The slope of the estimated regression line is approximately  . So, for every dollar _________increasedecrease in the hotel room rate the amount spent on entertainment increases by $.

4. The average room rate in Chicago is $128, considerably higher than the U.S. average. Predict the entertainment expense per day for Chicago (to whole number).

Case Study

Terror at the Taj Bombay: Customer-Centric Leadership

The night of November 26, 2008, 10 armed individuals from the terrorist group Lashkar-e-Taiba (Army of the Righteous) entered the western-Indian city of Mumbai (formerly Bombay) to attack pre-determined locations, including the Taj MahalPalace and Tower (Taj Bombay). Over three nights and two days, terrorists killed 159 people and wounded 211 across the city. Of these, 34 people died and 28 were injured during the three-day siege of the Taj Bombay. The attacks, which became known in India as “26/11”, had a dramatic and lasting impact on the Indian national psyche.

However, the Taj Bombay received praise in the aftermath of the attach- specifically from hotel guests-for the quick-thinking actions of hotel staff to ensure the safety of hotel guests at the expense of their own personal safety. In addition to managing the emotional and psychological challenges of moving forward after the loss of employees and extensive physical da1nage to the hotel, senior executives wondered if the Taj brand would survive. Images of the Taj Bombay under attack were reprinted in newspapers and shown on television news stations worldwide. Executives had to decide when -and if -to re-open the hotel, whether to continue to use the Taj brand name, and what message to send out to consumers. The risk was to be viewed as insensitive by either avoiding the tragedy completely in their messages to the public or being seen as taking advantage of public sympathy in talking about the tragedy, and in deciding the right time to return to "business as usual" at the Taj Bombay.

1. What specific actions do you take in both the short-term and long-term in rebuilding the Taj brand name?
2. What would you do to recover from "being the living image of the terrorist attack" as Ratan Tata describes it? Is this even possible?

Here are some real statistics for various countries in 2003: per capita income vs. per capita recorded music sales:

Country                      Per Cap. Income Per Cap. Music

                                   ($ thousands)             Sales ($)

Norway                      42.4                     55.9

United Kingdom          30.9                     53.35

United States              42.0                     40.43

Australia                     32.9                     33.84

Switzerland                 35.3                     34.40

Finland                       30.6                     26.98

Canada                      32.9                     20.79

United Arab Emirates        29.1                     11.33

Greece                            22.8                     8.10

Israel                               22.3                     6.68

Czech Republic                 18.1                     3.96

South Africa                     12.1                     3.75

South Korea                      20.4                     3.34

Mexico 10.1                     3.30

Egypt                                4.4                   0.15

Indonesia                          3.7                   0.33

4a) Which variable should be considered the dependent (y) variable, and which the independent (x) variable?

4b) According to this model, if a country’s income improves by ^$3,000, how much to you expect music sales to increase by?

4c) What is the correlation coefficient? Is it statistically significant? How strong is this model?

4d) Why do you think the correlation is as high as it is?

4e) If a region of country has a per-capita income of ^$25,000, predict its per-capita music sales.

4f) Looking at the U.S, Canada. & Europe only, delete the United Arab Emirates, South Africa, South Korea Mexico, Egypt, and Indonesia from the model. Answer 3b, 3c, and 3e again.

4g) Why might it have been OK to throw away the countries we did in part f?

Ivanka Trump after moving to Pakisatan and has purchase PC hotel Karachi in November 2020 and renamed it Ivayana. The hotel is a 5 star luxury hotel consisting of 100 single rooms 70 double rooms and 40 Suites. The average night stay in a single room costs Rs 8000. Double bed cost Rs 19000 and suite costs Rs 35000. On average 70 single rooms, 60 double rooms and 35 suites are occupied. Besides, there are 4 ball rooms. The ball rooms are always available for booking but they only get booked on Saturdays and Sundays. Each ball room has capacity of 300 people and rental charged for each booking is RS 130,000. 10 Rooms in each category are paid by credit card. The payment is received a week later. 50% amount related to ball room are received in same month and 50% in next month. The rental charge for ball rooms was Rs 100,000 in 2020. The charge for rooms has not changes since last year and have remained same. The hotel is charged local tax of Rs 5000 each week which is paid in the same month. The hotel has a staff of 150 people. 30 kitchen staff which receive 18% of the amount received againts the bill charged for the meals. On average the kitchen staff receive 90 orders for meal with the average billing of Rs 8000 per meal. the amount of meals billed is immediately collected and the kitchen staff is paid in the 1^st week of next month. The room service and the janitorial satff are 40 which are paid Rs 18000/month at last day of same month. 10 is the num of other lower staff for misc services and they are paid 15000/month at last day of same month. The remainig 20 are the senior executive staff, their remuniration details are not shared. The hotel is powered by solar panels and the, its maintenance is outsourced to a company solarex, they charge Rs 200,000 quarterly, which is paid in 2 installments. 50% is paid in the 1^st month of quarter and the rest is paid in the last month of quarter. The opening cash in hand was Rs 100,000.

Prepare Cash budget for the 1^st quarter of 2021.                (PLO 2.1, CLO 1)                                13 marks

Hint: Consider reviewing the actual calendar for 2021.

Ivanka Trump after moving to Pakisatan and has purchase PC hotel Karachi in November 2020 and renamed it Ivayana. The hotel is a 5 star luxury hotel consisting of 100 single rooms 70 double rooms and 40 Suites. The average night stay in a single room costs Rs 8000. Double bed cost Rs 19000 and suite costs Rs 35000. On average 70 single rooms, 60 double rooms and 35 suites are occupied. Besides, there are 4 ball rooms. The ball rooms are always available for booking but they only get booked on Saturdays and Sundays. Each ball room has capacity of 300 people and rental charged for each booking is RS 130,000. 10 Rooms in each category are paid by credit card. The payment is received a week later. 50% amount related to ball room are received in same month and 50% in next month. The rental charge for ball rooms was Rs 100,000 in 2020. The charge for rooms has not changes since last year and have remained same. The hotel is charged local tax of Rs 5000 each week which is paid in the same month. The hotel has a staff of 150 people. 30 kitchen staff which receive 18% of the amount received againts the bill charged for the meals. On average the kitchen staff receive 90 orders for meal with the average billing of Rs 8000 per meal. the amount of meals billed is immediately collected and the kitchen staff is paid in the 1^st week of next month. The room service and the janitorial staff are 40 which are paid Rs 18000/month at last day of same month. 10 is the number of other lower staff for misc services and they are paid 15000/month at last day of same month. The remainig 20 are the senior executive staff, their remuniration details are not shared. The hotel is powered by solar panels and the, its maintenance is outsourced to a company solarex, they charge Rs 200,000 quarterly, which is paid in 2 installments. 50% is paid in the 1^st month of quarter and the rest is paid in the last month of quarter. The opening cash in hand was Rs 100,000.

Prepare Cash budget for the 1^st quarter of 2021.   

Hint: Consider reviewing the actual calendar for 2021.

Create an excel workbook for the following questions. Answer these questions under your Solver work for each respective problem.

1. Devos Inc. is building a hotel. It will have 4 kinds of rooms: suites where customers can smoke, suites that are non-smoking, budget rooms where the customers can smoke, and budget rooms that are non-smoking. When we build the hotel, we need to plan for how many rooms of each type we should have. The following are requirements for the hotel:

1. We want to figure out how many rooms of each type to build based on maximizing revenue if we fill up the hotel. We expect to charge $190 for a suite that is non-smoking and $140 for a budget room that is non-smoking. Smoking room customers for both suites and budget rooms will have to pay an additional $20 per night.
2. We can spend up to $7,500,000 on construction of our hotel. The cost to build a non-smoking budget room is $12,000. The cost to build a non-smoking suite is $15,000. It is $3,000 additional for a smoking room of either type for smoke detectors and sprinklers.
3. We require that the number of budget rooms be at least 1.5 times the number of suites, but no more than 3 the number of suites.
4. There needs to be at least 80 suites, but no more than 200.
5. Industry trends recommend that smoking rooms should be less than 50% of the non-smoking room and in addition, we require our builder gives us at least 4 smoking rooms.

Answer the following using your Solver answers:

1. How many of each room type should be built, and what would the revenue be for a night when our hotel was fully booked?
2. Without re-running Solver, what happens to our revenue if we get an additional $1,500,000 for building? Explain in words how you got this answer without re-running solver. Over what amount of construction costs can you use this procedure?
3. Over what range of room price can our budget non-smoking rooms vary over for us to get the same answer for the quantity of each type of room?

Question: In this case we are asked to explore the appropriate application of Generally Accepted Accounting... In this case we are asked to explore the appropriate application of Generally Accepted Accounting Principles pertaining to Capitalization of Costs vs. the Expensing of Costs....A COST represents the value exchanged for the ASSET or the benefit received from monies disbursed.....now....how do we interpret the benefits received.....are there future benefits??? or Are the benefits concurrently expired upon acquisition???? So this becomes the basis of many issues pertaining to the accurate interpretation of a guideline in concert with the business transaction under analysis.....It is our responsibility to ensure we meet the needs of our clients without undermining the initial intention of the guideline....So then we are faced with issues pertaining to LOOPHOLES....Is it appropriate for us...as ethical accounting professional, to attempt to find creative ways to essentially circumvent the regulatory restriction.....Are we able to meet both the needs of our clients and the integrity of our profession???? So now you are asked to interpret an issue related to Capitalization vs Expensing for the TRUMP International Corp.....Craft your response carefully including all of the resources you investigated as you crafted your response. Trump International Construction Company is building a hotel for speculative purposes. That is, the Company has not yet found a buyer for the hotel, but expects to do so within a few months. Trump International expects to spend about another two years to complete construction of the hotel borrows $25,000,000 at 5.5% on Jan 1, 2017 and commences building the hotel. The land was purchased in 2016 for $5,000,000 and has property taxes of $4,000,000 per year. Trump incurs building and construction costs of $12,000,000 for 2017 and 2018. Trump International seeks advice from you, as their accountant, if the interest on bank loan and property taxes associated with this construction site should be capitalized or expensed. Required: Conduct research on the fundamentals of reporting a Cost as an Asset (Capitalized) vs. an Expense and prepare a memo advising the client of your advice. What should the value of the Hotel be reported on the Financial Statements at Dec 31, 2017? Is it relevant that the hotel is being constructed on speculation rather than for a particular customer? Include the regulatory requirements you researched in order to craft your answer and site your specific GAAP, FASB, IRS and or other Regulatory Pronouncements you consulted.

Develop 2 soft and 2 hard standards for any aspect of the service offered by hotel and restaurant? (Subject: service marketing)

Why does the hotel industry have so many partnerships among competitors? Is this true for other industries? Which ones?