You have been given the following information about a hotel for the next year. The hotel has 40 rooms and expected occupancy rate of 70%. Rooms department, operating expenses, wages, supplies, laundry, and so on is 27% of room sales revenue.

a. Calculate the hotel’s average room rate for next year.

b. If the hotel operated at 30% double occupancy and management wanted a $15 spread between the single and double room rates, what would these rates be?LO1

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Administrative and general Marketing Energy costs $ 38,300 28,900 35,100 Repairs and maintenance 28,800 Property taxes 17,600 Insurance 4,800 Telephone department operating loss (9,700) Contributory income, food and beverage departments First mortgage, at 8% interest, present balance Second mortgage, at 12% interest, present balance Ownership equity (after-tax return of 15% is expected) Book value of fixed assets before depreciation charges: 103,200 601,000 402,000 280,000 Land 250,000 Building 1,860,000 Furniture and equipment (combined) 382,000 Depreciation rate on building 5% Depreciation rate on furniture and equipment (combined) Income tax rate 20% 25%