1. You are required to assist Domino Investments to determine new room rate for Easter hotel, the idea is to determine new rate based on 2019 and 2020 performance in adapting to current pandemic situation. Used FORM 3 to calculate new room rate for Easter hotel.

FORM 3: Easter Hotel Room Rate Calculation

Rule of thousand rate

Hubbart Formula Room Rate

Room Rate based on 2019 reference

Room Rate based on 2020 reference

Easter Hotel new room rate based on 2019 and 2020 reference

3. Due to the current pandemic situation, Easter hotel decided to sell the hotel business to Domino investment. As part of this project team for Domino investment, you are asked to determine the possibility to take over the hotel business and continue operate the hotel for at least 15 years. Easter Hotel is located near to Kuala Lumpur city, it only takes about 15 minutes ride to the shopping destination in the town area. Easter Hotel consists of 250 rooms and was established more than 10 years. Currently, the hotel offers a business centre and one coffee house which can cater 200 guests. To sustain the hotel business during current pandemic, there is a need for the hotel to re-position the hotel from its current limited service to an economy class hotel. They will have to change the room rate, offering rate category and the operation hours of the coffee house. The purchase price for Easter Hotel is: Land RM 4,600,000 Building RM 12,250,000 Furniture, fixtures & equipment RM 2,200,000 Pre-opening expenses RM 450,000 The operating statistics for the Easter Hotel for 2019 & 2020 are listed below: 2019 2020 85% 42% Average Occupancy Operating expenses (% off room revenue) Allowance income 30% 20% RM 600 Business Center income RM 3,500 RM 1,100 RM 12,500 RM 150 Coffee House income RM 2,200 Domino investment expects an annual return on investment of RM 1,150,000 from the investment