Question

Kerry Phillips is forecasting sales of her 100-room limited-service Phillips Inn. She forecasts by market percentage of rooms sold segment. The most recent year's (20X3) andvrage daily room rate (ADR) by market segment were as follows: Segment Percentage of Rooms Sold ADR Business 4096 S85.00 Group 10% 75.00 Turint 50% 90.00 On an average day, her Inn experiences a 72 percent paid occupancy. With considerable advertising she believes she can achieve a daily paid occupancy of 75 percent. Further, she believes she can increase the tourist segment up to 55 percent at the expense of the business segment. In addition, she projects ADR increases of 5 percent for all segments. Required: Forecast the room revenue for January 20X4

Answer 1

Total room days in January = 100 rooms * 31 days = 3100 room days
Forecasted occupancy 75% = 3100 * 75% = 2325 room days

Forecasted occupancy to :
Business = 35%
Group = 10%
Toursit = 55%

Forecasted ADR of
Business = $85 + $85 *5% = $89.25
Group = $75 + $75 *5% = $78.75
Toursit = $90 + $90 *5% = $94.5

Forecasted revenue to Business = 2325 * 35% * $89.25 = $72,627.1875
Forecasted revenue to Group = 2325 * 10% * $78.75 = $18,309.375
Forecasted revenue to Tourist = 2325 * 55% * $94.5 = $120,841.875
Total forecasted revenue of January = $211,778.4375 or $211,778.44 rounded off.