Question

The operation team of H hotel, which has 25 rooms on daily basis, has projected that the occupancy will be 60.00% with total revenue of $620,000 and total expenses of $50,000 for the next year. The income tax bracket is 40.00%. Assume that there are only single and double rooms for H with a double occupancy of 70.00% and the double rooms are sold at a percentage markup of 20.00% over singles. Based on the information given, what are the individual ADRs for both single and double rooms for H hotel for the next year (assume that there are 365 days in a year)?

Answer 1

solutiong Given data Total sooms = occupancy - 607 Total Revenue Total expenses $620000 so OUD Total revenue per day 62oooo 365 iz 1698.63 Revenue from occupied rooms (698.63 25x60% - 113.24 Total room fate x + y = 113.24 Room rate of y -) X+x20%) 4 (2 eq (1) = x + (x + x(20%)] = 113.24 2x + 0.2 x = 113.24 2.2 x = 113.24 x= 113.24 Room rent of single = 51.47 xty = 113.24 Room rent of Double Ty=61.97 Umm