The hotel manager is negotiating with a client the room rate that will be charged to those attending an assembly to be held at the hotel.

The organizers are responsible for getting a room rate that is competitive for the attendees and getting a minimum number of people to stay during the activity. The cost of the rooms is borne by the attendees and is NOT included in the registration fee they pay to attend the Assembly. The organizers are responsible for paying for food during activities (breakfast, lunch and snack, this includes service and other assembly support activities), in exchange for this they can use the free conference rooms.

The cost of dinner is not covered in the cost of the rooms or by the organizers. The cost of the room does NOT include breakfast, lunch or dinner. It also does not include the cost of washing or ironing clothes. These costs are separately. The hotel provides free internet, but does not include long distance calls as part of the room rate.

The client estimates that 200 people will attend the assembly and that at least 10% of them will stay at the hotel because they come from abroad. The activity will take place during the low season of the hotel, so the hotel manager understands that he will have enough rooms available to comply with the agreement.

QUESTIONS:

1. What costs should the hotel administration take into account when computing the total price per room per night that will be charged to customers during the regular season (assume that all rooms are the same)? DO NOT use monetary amounts, real or hypothetical. Provide a list of 10 costs using the table presented after question 2. You should include some costs that are specifically for the room and others for the hotel in general and should refer to costs for different causes.

2. What costs of those identified in question 1 should the hotel manager take into account when computing the total price per room per night that he will grant to the assembly attendees during the low season? Use the last column of the table to indicate whether it is relevant or not.

COSTOf the roomOf the hotel in generalRelevant (Yes or not)

Example: Depreciation expense XNO

of the receiver's furniture

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

3. Assembly attendees always have the option of staying at the assembly hotel or another nearby. In addition to a low or competitive price, what other considerations or variables can the hotel manager use when promoting their rooms and the hotel between the registration of the assembly to make the hotel stay more attractive than that of any competing hotel? Provide a list.