In the hotel industry, three important metrics that hotel managers consider to improve their hotel performance are Occupancy Rate, Average Daily Rate (ADR), and Revenue per Available Room (REVPAR), with the last metric being the most important one among all. Occupancy rate is the ratio of rooms sold in a given day divided by the total number of rooms available. ADR is the average of the selling price of all the rooms sold for one day. REVPAR is calculated by multiplying the ADR by the occupancy rate.

You are the hotel manager for a busy downtown hotel that has 120 rooms available to sell.

(a) What is the occupancy rate if you sell 84 rooms on a specific day?

(b) If the average daily rate is $180, calculate the REVPAR.

(c) Write an equation in the form of y = mx + b for this problem so that you can use it to calculate the hotel’s total revenue. Hint: Let x be the occupancy rate.

(d) If you target a minimum revenue of $15 000 in a given day, how many rooms do you have to sell, assuming the ADR equals $180?