1. What are the important factors Joseph should consider prior to deciding if the airline contract would be a good one for the hotel?
2. Under what conditions might Joseph tell his revenue manager to make the bid?
3. Under what conditions might Joseph instruct his revenue manager not to participate in the bidding?

Joseph Frederick, the GM of the 400-room Airport Inn, located adjacent to the International airport in his large metropolitan city, has been contacted by an airline and asked to bid on a contract that would have the Airport Inn house that airline’s pilots and flight attendants who stay overnight in the city.
The airline crews would occupy 20 rooms per night, 365 days per year. The airline has indicated, however, that the room rate it would pay the Airport Inn represents approximately 50% of the hotel’s current year-to-date ADR.