The Winsor has 400 rooms. The average transient rate in March is $142. The variable room cost is $17 (per room). The Windsor is also paying a royalty fee of 4% and a marketing fee of 3% of room revenue. A local universitys business student alumni association plans a reunion. The group requests single rooms for $65 per room night, meals, and other services for a 3-day event between March 6 8. The following is the groups request:

Date	Rooms	Breakfast	Lunch	Dinner	Meeting room
03/06	85	85	0	85	-----
03/07	80	80	0	0	$300
03/08	70	70	40	0	$300
Total	235	235	40	85	$600

The forecasted transient demand of the hotel for the days in question is as follows:

03/06	03/07	03/08
365	360	310

This means that the hotel will have to displace some of the forecasted transient demand in order to accommodate the group. The displaced transient room nights for the first night will be 50 rooms (400 85 365 = 50); and for the second night is 40 rooms (400 80 360 = 40).

The hotels capture rate (% of transient guests purchasing a meal) and other relevant data per meal period for transient guests in March are as follows:

Meal	Price	Food cost	Displaced transient guests	Transient meal capture %
Breakfast	$12	$3.60	90	70%
Lunch	$28	$9.52	90	20%
Dinner	$40	$12.80	90	40%

The group meals have the same food costs per item as the transients but are sold at discounted price:

Meal	Price	Food cost	# of Group meals capture
Breakfast	$10	$3.60	235
Lunch	$24	$9.52	40
Dinner	$32	$12.80	85

Beverage costs and prices are the same for group guests and transients. The average beverage price is $6.00 and the average beverage cost is 29%. The organizer believes that 70% of the group members will purchase one beverage per day. The beverage capture rate of transient guests is 40%.

Beverage	Price	Cost %	# of guests	Beverage capture %
Group	$6	29%	235	70%
Transient	$6	29%	90	40%

Please conduct a displacement analysis to determine whether confirming or rejecting the group request.

Template for displacement analysis