Assignment $4-$ Displacement Analysis

The Winsor has $400$ rooms. The average transient rate in March is $$142.$ The variable

room cost is $$17($per room$).$ The Windsor is also paying a royalty fee of $4\%$ and a

marketing fee of $3\%$ of room revenue. A local university's business student alumni

association plans a reunion. The group requests single rooms for $$65$ per room night,

meals, and other services for a $3-$day event between March $6-8.$ The following is the

group's request:

Date Rooms Breakfast Lunch Dinner Meeting room

The forecasted transient demand of the hotel for the days in question is as follows:

$03/0603/0703/08$

$365,360,310$

This means that the hotel will have to displace some of the forecasted transient demand in

order to accommodate the group. The displaced transient room nights for the first night

will be $50$ rooms $(400-85-365=50$; and for the second night is $40$ rooms $(400-80-$

$360=40$

The hotel's capture rate $(\%$ of transient guests purchasing a meal$)$ and other relevant data

per meal period for transient guests in March are as follows:

The group meals have the same food costs per item as the transients but are sold at

discounted price:

Meal Price Food cost# of Group meals capture

Breakfast $$10$ $$3\mathrm{.}60235$

Lunch $$$24,$$$9\mathrm{.}52,40$

Dinner $,$$$32$ $$12\mathrm{.}8085$

Beverage costs and prices are the same for group guests and transients. The average

beverage price is $$6\mathrm{.}00$ and the average beverage cost is $29\%.$ The organizer believes that

$70\%$ of the group members will purchase one beverage per day. The beverage capture

rate of transient guests is $40\%.$

Beverage Price Cost $\%$# of guests Beverage capture $\%$

Group $$$6629\%,235,70\%$

Transient $$6,29\%,90,40\%$

Please conduct a displacement analysis to determine whether to confirm or reject the

group request. Please use the template in the next page to work on the assignment.Assignment $4-$ Displacement Analysis

The Winsor has $400$ rooms. The average transient rate in March is $$142.$ The variable

room cost is $$17($per room$).$ The Windsor is also paying a royalty fee of $4\%$ and a

marketing fee of $3\%$ of room revenue. A local university's business student alumni

association plans a reunion. The group requests single rooms for $$65$ per room night,

meals, and other services for a $3-$day event between March $6-8.$ The following is the

group's request:

Date Rooms Breakfast Lunch Dinner Meeting room

The forecasted transient demand of the hotel for the days in question is as follows:

$03/0603/0703/08$

$365,360,310$

This means that the hotel will have to displace some of the forecasted transient demand in

order to accommodate the group. The displaced transient room nights for the first night

will be $50$ rooms $(400-85-365=50$; and for the second night is $40$ rooms $(400-80-$

$360=40$

The hotel's capture rate $(\%$ of transient guests purchasing a meal$)$ and other relevant data

per meal period for transient guests in March are as follows:

The group meals have the same food costs per item as the transients but are sold at

discounted price:

Meal Price Food cost# of Group meals capture

Breakfast $$10$ $$3\mathrm{.}60235$

Lunch $$$24,$$$9\mathrm{.}52,40$

Dinner $,$$$32$ $$12\mathrm{.}8085$

Beverage costs and prices are the same for group guests and transients. The average

beverage price is $$6\mathrm{.}00$ and the average beverage cost is $29\%.$ The organizer believes that

$70\%$ of the group members will purchase one beverage per day. The beverage capture

rate of transient guests is $40\%.$

Beverage Price Cost $\%$# of guests Beverage capture $\%$

Group $$$6629\%,235,70\%$

Transient $$6,29\%,90,40\%$

Please conduct a displacement analysis to determine whether to confirm or reject the

group request. Please use the template in the next page to work on the assignment.

$\backslash$table$[[$Displacement Analysis,$],[$Group$,,],[$Step $1$: Calculate Room Profit,,$],[$Room Revenue,,$],[\backslash$table$[[],[$royalty fee