Skyview
1. On average, how many rooms must be rented each night in season for the hotel to breakeven?
Note that to answer this question, I’ve made the following assumptions:
1) The hotel only opens in the ski season just as did it last year thus all operating expenses of the year would need to be absorbed; 2) Telephone is only active in occupied rooms
Based on these assumptions, I used the excel solver to find a solution making sure the revenue generated covers all the expenses. These chart below shows how each item on the IS is computed. Based on these amounts, the average occupancy rate needs to be 55 rooms per night.
2. The hotel is full on weekends in the ski season. If all room rates were raised by $5 on weekend nights, but occupancy fell to 72% instead of 80%, what would be the revised profit before taxes for the year, per exhibit 1?
Note that to answer this question, I’ve made the following assumptions:
1) The hotel only opens in the ski season just as did it last year thus all operating expenses of the year would need to be absorbed; 2) Telephone is only active in occupied rooms; 3) There are 17 weekends within the season; 4) 72% rate applied throughout the season, not just over the weekends
Based on these assumptions, I used Excel to compute a solution, which give me a revised profit before tax of $15,969.
3. What is the proposed incremental contribution margin per occupied room/day during the offseason?
The incremental contribution margin per room/day is $5 as indicated in the chart above.
4. For each alternative in the case, list the annual expenses that are incremental to that decision alternative but are not related to the room/days occupied?
There are 3 alternative cases
(1) Invest in advertising; (2) Invest in a heating pool; (3) Invest in a summer pool
As a result, please see the respective incremental cost independent of occupancy rate for either of the alternatives:
Alt 1 = $4,000; Alt 2 = $16,800; and Alt 3 = $12,200
5. For each
Note that to answer this question, I’ve made the following assumptions:
1) The hotel only opens in the ski season just as did it last year thus all operating expenses of the year would need to be absorbed; 2) Telephone is only active in occupied rooms
Based on these assumptions, I used the excel solver to find a solution making sure the revenue generated covers all the expenses. These chart below shows how each item on the IS is computed. Based on these amounts, the average occupancy rate needs to be 55 rooms per night.
2. The hotel is full on weekends in the ski season. If all room rates were raised by $5 on weekend nights, but occupancy fell to 72% instead of 80%, what would be the revised profit before taxes for the year, per exhibit 1?
Note that to answer this question, I’ve made the following assumptions:
1) The hotel only opens in the ski season just as did it last year thus all operating expenses of the year would need to be absorbed; 2) Telephone is only active in occupied rooms; 3) There are 17 weekends within the season; 4) 72% rate applied throughout the season, not just over the weekends
Based on these assumptions, I used Excel to compute a solution, which give me a revised profit before tax of $15,969.
3. What is the proposed incremental contribution margin per occupied room/day during the offseason?
The incremental contribution margin per room/day is $5 as indicated in the chart above.
4. For each alternative in the case, list the annual expenses that are incremental to that decision alternative but are not related to the room/days occupied?
There are 3 alternative cases
(1) Invest in advertising; (2) Invest in a heating pool; (3) Invest in a summer pool
As a result, please see the respective incremental cost independent of occupancy rate for either of the alternatives:
Alt 1 = $4,000; Alt 2 = $16,800; and Alt 3 = $12,200
5. For each