New York Mansion has 350 rooms, and the historic March ADR is $113. A student group requested a $75 room rate for 280 rooms each day during March 6-8. The forecasted transient occupancy during March 6-8 is 300 on each day without the group business.
A. Is it worthwhile to accept the terms from the student group when measured by overall profit? Please compute the profit in two scenarios using formulas and then state if you want to accept the group business.
B. If it is not worthwhile to accept it, at what rate will you accept the group business?
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New York Mansion has 350 rooms, and the historic March ADR is $113. A student group requested a $75 room rate for 280 rooms each day during March 6-8. The forecasted transient occupancy during March 6-8 is 300 on each day without the group business.