Daniel Leso is the RM for the Hampton Inn & Suites His 200-room hotel normally sells 85% of its rooms on Tuesday nights at $13150 ADR All variable costs related to selling his rooms are $50 per room The DOSM at the hotel is proposing to place a bid to sell 125 rooms for a Tuesday night next month at $109 per room Daniel believes that if the hotel wins the group rooms bid, the transient room sales for that day will ensure a sell-out at the rate of $13150
What would be the total amount of revenue the hotel will achieve if: It books the group? It does not book the group
2 What would be the total amount of after-variable costs rooms’ revenue the hotel will achieve if the hotel wins the group rooms contract?
3 What would be the total amount of after-variable costs rooms’ revenue the hotel will achieve if it does NOT win the group rooms contract?
4 What additional factors might Daniel and the DOSM take into account before determining whether to bid of this piece of group rooms business?