5. The Grand hotel is a five star hotel situated in a good location in a major city. It attracts business and leisure travellers, runs conferences and welcomes non-residents to enjoy its bars and restaurant. The summary income statement for the year ended 31st December 2019 reads as follows: 000 000 Total Revenue 7,040 Direct Operating Material 450 Direct Operating Wages 1,465 Estate Fixed Costs 2,120 General Fixed Costs 500 Total Operating Costs 4,535 Net Annual Income 2.505 The revenues and direct operating costs can be further analysed by the services provided as follows: Leisure Meeting Rooms Minibar Restaurant Bar Total Suite Room 000 000 000 000 000 000 000 Revenues 4,500 80 900 760 500 7.040 Direct Materials 35 10 220 150 15 20 450 Direct Wages 900 0 300 170 70 25 1,465 Contribution 3565 70 380 440 415 5,125 300 255 Total Room Nights Available Occupancy Rate nights 52,500 85.2% 60% 70% 60% 10% The hotel wishes to determine the profitability of its different types of customers, i.e.: Business clients on expense accounts, who use the executive rooms and make significant use of all facilities except the meeting room. Package tour clients, where tour operators look to bargain a good price and clients mostly explore the city during their stay. Individual bookings, prices of rooms vary considerably but these clients respond to discount deals offered online. Conferences: Accommodation for each delegate, use of the meeting room and meals are paid by conference organiser, delegates make use of the bar. Wedding receptions are included in this category. Analysis of revenue from clients for the year ended 31st December 2019 has revealed the following: Client group Annual number of nights Room revenue % Minibar revenue % Restaurant revenue % Bar revenue % Leisure suite revenue % Meeting Room revenue % Business 15,500 % 35 60 51 40 30 Packages 20,250 % 38 10 23 20 40 Individuals Conference Total 5,000 4,000 44,750 % % % 16 11 100 10 20 100 11 15 100 5 35 100 10 20 100 100 100 Analysis of costs for the year ended 31st December 2019 has revealed that direct room costs vary per room night. In all other departments direct costs vary with revenue. It has been decided to allocate estate fixed costs to customer groups based on room occupancy, and general fixed costs based on revenues. Required: a) Analyse the income and expenditure by each of the customer groups in what you consider to be an appropriate format. (12 marks) b) Calculate supporting statistics based on rooms per night. (4 marks) Comment on the information provided by your analysis and advise the management on pricing, withdrawal from any client groups and a strategy to fill more of the hotel's capacity. (4 marks)