As a result of Covid-19 an international resort hotel in Cairns, Australia has lost a lot of patronage and has been closed for refurbishment during the pandemic and resulting lockdowns. It is planned to re-open and re-launch the hotel for the upcoming Australian summer on November 1^st, 2021. The property will continue to trade on its reputation as a top of the range 5-star hotel. Following the renovation, the hotel has been valued at $700 million.

After re-opening the resort will be open 365 days of the year. In terms of cost accounting the resort has a number of cost centres including Repairs and Maintenance and the Front Office which are relatively fixed. The hotel also has variable costs relating to cleaning and servicing rooms. You have been provided with the following data regarding the refurbished hotel:

Available Rooms	600
Average Room Tariff (per night)	$495
Fixed Financing Costs	$15 million
Fixed Operating Costs	$100 million
Variable Operating Costs (per room per night when occupied)	$50

1. Hotel rooms (like airline seat tickets) are services that are referred to as perishable in that they expire if they are not used on a certain date (they cannot be stored). Management has determined that they can increase the hotels occupancy from 70% to 85% by subscribing to a last-minute deals provider. However, should they do so the average room tariff that the hotel will achieve will fall from $550 per night to $450 per night. How much profit (loss) will the hotel make if it takes up the last-minute deals option.