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we have to find room revenue Given Information: Rack Rate of $100.00 Group Rate of $60.00 Marginal Cost $15.00 per room Group Sales is proposing
we have to find room revenue
Given Information: Rack Rate of $100.00 Group Rate of $60.00 Marginal Cost $15.00 per room Group Sales is proposing a group block of 60 rooms for 4 days that will cause a transient displacement on two of the four days. The chart below outlines the current room booking situation. From a revenue perspective, should the hotel accept the group and risk having to walk their transient guests? Tues Wed Thurs Fri 400 400 400 400 140 140 150 150 lotel Rooms vailable iroup Rooms ooked xpected ransient @ ack 200 180 220 210 60 60 60 60 roposed roup ransient isplacement 0 0 30 20 1. What is the potential revenue for the hotel without the group? 2. What are the marginal costs for the hotel without the group? 212 3. What is the Contribution for the hotel without the group? 4. What is the potential revenue for the hotel with the group? 5. What are the marginal costs for the hotel with the group? 6. What is the Contribution for the hotel with the group? 7. Should the hotel accept the group business? TIP: 1. Calculate the revenue for rooms expected to be sold without the proposed group rooms. 2. Calculate the revenue for rooms sold with the groupStep by Step Solution
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