You are the revenue manager for the South Side Suites, a 350 room, busy downtown hotel. The month of March is historically a high-demand period. During your daily revenue management meeting, you sit down with your team to discuss the upcoming busy period of the 3^rd week of March.

One of your team members, Raj, reminds everyone that the Mandalorian Madness Fan Group has booked 125 rooms for 3 nights with a Wednesday arrival date for the 3^rd week of March. This group is guaranteed and will be paying $150 per night, per room. They have arranged for a “Star Wars-themed” dinner on their last night and will be paying $50 per person for dinner that evening. The group expects all 125 guests to attend the dinner.

Another member of the revenue management team, Aliya, mentions that they have another potential group, Save the Tigers Wildlife Foundation, for the same week. This group would like to book for 5 nights with a Monday arrival, and would like to book 150 rooms. This group is price-sensitive and is willing to pay the group rate of $110 per night. Aliya mentions that this group will need 5 meeting rooms for each day.

At this point, Elizabeth, another member of the team, mentions that they have a prospective group booking for the same week. The group Elizabeth has lined up, Wacky Windsor’s Royal Fan Club, is looking to book 100 rooms for 4 nights with a Wednesday arrival and is willing to pay $160 per room night. The group is also looking to have a formal banquet on Wednesday and Saturday for 100 people and is willing to pay $75 per plate.

Knowing that your hotel cannot accommodate all 3 groups during the week in question, you and the team decide to look at the expected transient business during that week. Your group has decided that you could expect the following transient business during the week in question:

Sunday	Monday	Tuesday	Wednesday	Thursday	Friday	Saturday
Expected Transient Room Sales	81	155	81	155	181	81	15
Rate	$100	$125	$125	$135	$135	$135	$100

Some other information to help you make a decision:

Meeting Room Rate - $500 per day

Meeting Room Variable Cost – 10%

Variable Cost for Dinner or Banquet – 26%

Required Questions:

1. (10 Marks) Which group, if any, should the South Side Suites accept? Why? Include all calculations in your submission. (Your analysis must be supported by financial calculations. Revenue Calculations for each segment, Room nights sold for each segment, and total revenue for each group should be calculated. Use the attached spreadsheet to help with your analysis).
2. (5 Marks) How would you deny one of the groups? What would you say or do?

Answer rating: 100% (QA)

As in the given case South Side Suites should accept the second proposal which is from Save the Tige... View the full answer