Assignment Week $6-150$ points

Activity $1-75$ points

Sam is the group sales manager at the $400-$room full$-$service Hilton Hotel. Tyla is the front office manager. Together with James, the GM$,$ they make the revenue management decisions for their property. For the Friday night that is just one week away, they have $180$ unsold rooms remaining. Sam would like to accept an available group contract for the entire $180$ rooms. "We'll sell out," he proclaims, "and have a great RevPAR." Tyla would like to reduce the room rates to $$159\mathrm{.}00$ per night; which is a $$20\mathrm{.}00$ reduction from the hotel's normal rate of $$179\mathrm{.}00.$

"How many rooms do you forecast we can sell at that rate?" asks James.

"I believe we can sell about $120$ of them," is Tyla's reply.

"That means we'll leave $60$ empty rooms, and a lower RevPAR," protests Sam.

It costs $$35\mathrm{.}00$ to prepare, sell, and clean $($prepare for resale$)$ a room at the Hilton. Review the data and then answer the following questions:

Sam's Plan

Total

Rooms Sold ADR

$2201$

$179\mathrm{.}00$

$180510000$

RevPAR

GOPPAR

Tyla's Plan

Total

Rooms Sold ADR

$2205$

$1208159\mathrm{.}00$

$179\mathrm{.}00$

RevPAR

GOPPAR

What will be the hotel's occupancy $\%$ under each of the plans?

What will be the hotel's ADR under each of the plans?

What will be the hotel's RevPAR under each of the plans?

What will be the hotel's GOPPAR under each of the

plans?

If you were James, whose plan would you support?

The Hilton is a full$-$service hotel. Would your position change if the hotel were a limited$-$service property? Explain your answers.