Question
Newly Built is a 120 room hotel, located on a serene Caribbean island. The manager believes that to maximise profits full room rates should be
Newly Built is a 120 room hotel, located on a serene Caribbean island. The manager believes that to maximise profits full room rates should be charged at all times. A consultant found the following:
Room rates (daily) $80
Average occupancy (tourism season) 80%
Average occupancy (out of season) 25%
Length of tourism season (days) 150
Economic length of a year (days) 350
The consultant proposed the following:
Option 2
Room rates (daily) (Tourism season) $80
Room rates (daily) (Out of season) $60
Expected occupancy (tourism season) 80%
Expected occupancy (out of season) 60%
Option 3
Room rates (daily) (Tourism season) $80
Room rates (daily) (Out of season) $55
Expected occupancy (tourism season) 80%
Expected occupancy (out of season) 75%
Based on the above information management of Newly Built asked you to calculate the yield for the three options and advise.
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