It had been an exhausting two weeks, but JoAnna Taubman was very pleased with the way her hotel staff had performed. From tornado watch, to warning, to the too close for comfort sighting of a tornado that had missed her full‐service hotel by only two miles, her team was understandably nervous during the storm. Still, they had performed flawlessly.

Ultimately, the staff had gotten through the ordeal and proceeded to do a great job housing the many individuals whose homes were damaged by the winds, as well as the disaster relief officials who came to the area to help. Now, thanks to a great effort on the part of her sales staff, the hotel had been awarded the Federal Emergency Management Agency (FEMA) contract to house its federal aid workers, as well as a large number of Red Cross volunteers.

Beginning immediately, FEMA estimates that it will need 110 of the hotel’s 200 rooms for a period of at least four months. The impact on the hotel’s business during that time period will be immense, ensuring a virtual sell out every night. This nearly 100% occupancy will definitely be a change from the average 65% occupancy JoAnna had forecasted for these months.

1. Identify three areas within the hotel’s housekeeping department that would be directly affected by the new contract and thus the new sales forecast.

2. Identify three areas within the food and beverage department that would likely be affected by the new contract and thus the new sales forecast.

3. Assume that FEMA is billed monthly by the hotel and pays its bills within (but rarely before) 90 days. What effect will this contract have on JoAnna’s current cash accounts? What would you advise her to do?