Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Available Rooms 350 Hotel Market Index Occupancy 75.0% 82.0% 91.5 ADR $187.50 $193.00 97.2 RevPar $140.63 $158.26 88.9 Increases in occupancy will flow through to
Available Rooms 350 Hotel Market Index Occupancy 75.0% 82.0% 91.5 ADR $187.50 $193.00 97.2 RevPar $140.63 $158.26 88.9 Increases in occupancy will flow through to profit at 77% 1. Calculate the ADR if the INDEX were to increas by 2 points. 2. Multiply ALL room nights (the existing and the new calculated above) by the change in ADR. 3. Multiply this new revenue by the flow through % on ADR. 1. Calculate the total improvement in profit based on these two changes. 2. Apply a risk discount based on your assessment of the risk 3. Calculate the value improvement based on this cash flow improvement
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cost management a strategic approach
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
5th edition
73526940, 978-0073526942
