Scenario

You are the revenue manager for the Royal Sonesta Boston, a 450 room, busy downtown hotel. The month of March is historically a high-demand period. During your daily revenue management meeting you sit down with your team to discuss the upcoming busy period of the 3^rd week of March.

One of your team members, Rahul, reminds everyone that the Coal Miners Association convention has booked 140 rooms for 3 nights with a Wednesday arrival date for the 3^rd week of March. This group is guaranteed and will be paying $200 per night, per room. They have arranged for a "James Bond themed" dinner on their last night and will be paying $55 per person for dinner that evening. The group expects 125 guests to attend the dinner.

Another member of the revenue management team, Ellis, mentions that they have another potential group, Save the Bear Wildlife foundation, for the same week. This group would like to book for 5 nights with a Monday arrival and would like to book 300 rooms. This group is price-sensitive and is willing to pay the group rate of $150 per night. Ellis mentions that this group will need 5 meeting rooms for each day.

At this point, another member of the team Jack, mentions that they have a prospective group booking for the same week. The group Jack has lined up, Royal Yacht Fan club is looking to book 100 rooms for 4 nights with a Wednesday arrival and is willing to pay $210 per room night. The group is also looking to have a formal banquet on Wednesday and Saturday for 100 people and is willing to pay $105 per plate.

Knowing that your hotel cannot accommodate all 3 groups during the week in question, you and the team decide to look at the expected transient business during that week. Your group has decided that you could expect the following transient business during the week in question:

	Sunday	Monday	Tuesday	Wednesday	Thursday	Friday	Saturday
Expected Transient Room Sales	25 Rooms	149 Rooms	14 Rooms	149 Rooms	214 Rooms	75 Rooms	96 Rooms
Rate	$190	$175	$195	$220	$225	$230	$245

Some other information to help you make a decision:

Meeting Room Rate - $1,000 per day

Meeting Room Variable Cost - 10%

Variable Cost for Dinner or Banquet - 26%

Required Questions:

1. (10 Marks) Which group, if any, should the Royal Sonesta Boston accept? Why? Include all calculations in your submission. (Your analysis must be supported by financial calculations. Room nights sold for each segment, total occupancy for each possible scenario and total revenue for each possible scenario should be calculated).