Sit-Stay-Sleep is a luxury hotel in New York City that is expected to open in 8 months. The 200-room hotel is designed to accommodate guests traveling for business and/or pleasure with their pets. The marketing team is trying to determine the best way to set prices and decide which options are most profitable for the business.

The hotel plans to have two “package” options for guests at different times of the year to attract customers:

Weekend Getaway Package ($425) : 2-night stay in the deluxe suite, 1 day of day camping, and 1 spa package for your dog.

Stay-and-Play Weekend Package ($300) : 2-night stay in the standard suite, 1 toy and treats, and 1 spa package for your dog.

The purpose of this exercise is to help Sit-Stay-Sleep with some specific questions about pricing in relation to marketing. Use the formulas below to help you with some of your calculations as you answer the questions that follow.

* Break-even point = total fixed costs / (selling price per unit cost - variable cost per unit)
* Price elasticity of demand = % change in quantity demanded / % change in price
* % change in quantity demanded = (new quantity - original quantity) / original quantity
* % Price change = (new price - original price) / original price
* Elastic > |1|; Inelastic < |1|

	A	B	C	D
1	Type of room	Bowl	Daily Average Reserved Rooms	Revenue
2	luxury suite	$249	35 / 50	$8,715
3	luxury suite	$199	75 / 100	$14,925
4	Standard Suite	$149	35 / 50	$5,215
5
6	dog pack	Precio	Daily Average Reserved	Revenue
7	Field day	$25/per day	90	$2,250
8	Spa Package	$45	40	$1,800
9	toys and treats	$20	50	$100

• 5. If the total fixed Sit-Stay-Sleep costs for the spa package and the toys and treats are $50,000 and $30,000, respectively, and the variable cost per unit is $25 and $10, respectively, what is the point of of equilibrium for each item in the dog pack?

Answer rating: 100% (QA)

To calculate the breakeven point for each item in the dog pack we can use the ... View the full answer