Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following situation: Run the numbers again, said Elijah, the FOM at the 400-room Radisson Riverview. We need to make sure we are accurate

Consider the following situation: Run the numbers again, said Elijah, the FOM at the 400-room Radisson Riverview. We need to make sure we are accurate about this. I ran them three times already, replied Jennifer. Last year, in September, our RevPAR was $87.50. We ran a 70 percent occupancy and a $125 rate. And so far this September? asked Elijah. Like I said before, with three days left in the month, we are at a 69 percent occupancy and $129 rate. Thats an $89.01 RevPAR, said Jennifer. And we were budgeted for a 4 percent RevPAR increase? asked Elijah. Right, and thats the problem. We are at a 1.5 percent increase now. And as you know, if we dont make budget, we dont make our bonus. O.K. I got it. Now one more time, what did the New York booking agent say when you talked to him on the phone? asked Elijah. He said the entire Lion King cast was displaced because of a booking error at the hotel they had reserved. Hes scrambling for housing. He wants to bring the entire cast and crew here for four days, starting tonight. They want 100 rooms each day, but their budget is only $59.00 a night. If we take them, well be sold out for the rest of the month, said Jennifer. Assume that, with three days left in the month, Elijahs best estimate is that if he agrees to take the Lion King group it would mean 100 sold rooms per night at $59.00 and assume further that his hotel would indeed sell all of its remaining rooms on those nights at the $129 ADR the property is currently averaging for the month.

a. If he takes the group, would Elijah achieve the RevPAR needed to be granted the performance bonuses offered to him and his assistant? (9 marks)

b. What additional factors would you advise Elijah to consider before he decides whether to accept the reservation for the rooms requested by the Lion Kings booking agent? (7 marks)

c. If you were the RM at this property, would you advise Elijah to take the group? Why or why not? (9 marks)

(Maximum of 150 words for each of a., b., and c.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets And Institutions

Authors: Anthony Saunders, Marcia Cornett

8th Edition

1264098723, 978-1264098729

More Books

Students also viewed these Finance questions

Question

Why is ABC growing in popularity?

Answered: 1 week ago

Question

Describe the process of replacing bad habits with good ones.

Answered: 1 week ago