The SportHotel in Rome has 200 rooms and it is specialized in hosting visitors that are attending football mathces at the nearby stadium. The Revenue Manager of the hotel has just received a request from a tour operator client who is indicating that he would be interested in booking 50 rooms for two consecutive nights in four months time, proposing a rate of 100$ per room night, so that each room would be paid 200$ (100$ per night for two nights). The hotels revenue management platform predicts that the hotel will reach an 88% occupancy rate for those two nights if the 50- room group booking is not accepted. This occupancy would be reached by selling rooms to guests who would be paying a room rate of $150. Knowing that the high occupancy is due to an upcoming Champions League match between Rome and Liverpool taking place in Rome during those two days, and that many football fans would be willing to sharing a room if rates are discounted, the Revenue Manager wants to examine two options to offer to the tour operator: 1. Nightly room rates discounted to $95 if the tour operator can consolidate the group booking down to 40 rooms 2. Nightly room rates discounted to $90 if the tour operator can consolidate the group booking down to 25 rooms Based on the information above, discuss if the hotel would increase revenues by accepting or rejecting the tour operator request.

a. Revenues are higher if the hotel accepts the tour operator proposal

b. Revenues are higher if the hotel rejects the tour operator proposal

c. Revenues are the same in both cases, so the hotel is indifferent