Case Study

AAA Hotel is a large 300-room hotel with five ballrooms that can accommodate 200 guests respectively and up to 600 guests in a banquet setting. As the hotels sales representative, you received two new clients from Bills Jewelry and ABC Charity who want the same event dates. However, your hotel rooms would be overbooked if you take both meeting groups. Besides, there are already confirmed bookings with other organizations (see details in Table 1). You know that Bills Jewelry has a higher life-time value for the hotel but ABC Charity will occupy a large quantity of rooms as well as the use of a large banquet.

Question: Explain how you would manage the meeting clients in order to maximize the hotels revenue. Propose three possible solutions, compare their estimated total meeting and room minimum guarantee you are expecting to receive on March 7-8 in the table below. Explain your final decision.

	Action / explanation	Total estimated minimum guarantee for March 7-8
Solution 1
Solution 2
Solution 3

Notes: Average Room price is $1000 per night Suite price is $5000 per night Su M Total Total by Acc. 10 11 75% 40% 100 90 AAA Hotel (300 Rooms) Room Inventory Report March 4-12, 2021 Days of Week M W Th F Sa Date 4 5 6 7 8 9 2020 Occupancy: 80% 80% 50% 65% 100% 90% AVG group demand 90 100 90 90 100 100 AVG transient demand (Include walk-in guests) 110 100 90 90 180 170 Definite Room Bookings @ $1000 per room on average & $5000 for suites XXX Association 100 100 100 XXX Financial Company 50 50 SHTM Alumni 50 50 100 90 50 Tentative Room Bookings 20 20 Bill's Jewelry ABC Charity Annual Fundraising Event Rooms occupied 180 180 350 400 90,000 Estimated income with minimum guaranteed 30.000 30 000 30 000 100,000 100,000 100 000 120 000 120 000 390,000 300,000 360,000 120,000 XXX Association (Meeting) XXX Association (Average Rooms) XXX Financial Company (Meetings) XXX Financial Company (Average Rooms) SHTM Alumni(Meeting) SHTM Alumni (Average Rooms) 50.000 150.000 510,000 60.000 50.000 50.000 20.000 20.000 20.000 50.000 50.000 50.000 Tentative Bookings (estimated guaranteed meeting package) 120.000 120.000 150.000 210.000 240,000 80.000 100.000 180.000 420,000 Bill's Jewelry (Meeting) Bil's Jewelry (Rooms - suits + 2 average rooms ABC Charity Annual Fundraising Event (Meeting) ABC Charity Annual Fundraising Event Average Rooms) Total daily estimated revenue March 7-8 estimated revenue 220,000 220.000 440,000 800,000 180,000 180.000 800,000 990,000 1,790,000 360.000 1,790,000 Notes: Average Room price is $1000 per night Suite price is $5000 per night Su M Total Total by Acc. 10 11 75% 40% 100 90 AAA Hotel (300 Rooms) Room Inventory Report March 4-12, 2021 Days of Week M W Th F Sa Date 4 5 6 7 8 9 2020 Occupancy: 80% 80% 50% 65% 100% 90% AVG group demand 90 100 90 90 100 100 AVG transient demand (Include walk-in guests) 110 100 90 90 180 170 Definite Room Bookings @ $1000 per room on average & $5000 for suites XXX Association 100 100 100 XXX Financial Company 50 50 SHTM Alumni 50 50 100 90 50 Tentative Room Bookings 20 20 Bill's Jewelry ABC Charity Annual Fundraising Event Rooms occupied 180 180 350 400 90,000 Estimated income with minimum guaranteed 30.000 30 000 30 000 100,000 100,000 100 000 120 000 120 000 390,000 300,000 360,000 120,000 XXX Association (Meeting) XXX Association (Average Rooms) XXX Financial Company (Meetings) XXX Financial Company (Average Rooms) SHTM Alumni(Meeting) SHTM Alumni (Average Rooms) 50.000 150.000 510,000 60.000 50.000 50.000 20.000 20.000 20.000 50.000 50.000 50.000 Tentative Bookings (estimated guaranteed meeting package) 120.000 120.000 150.000 210.000 240,000 80.000 100.000 180.000 420,000 Bill's Jewelry (Meeting) Bil's Jewelry (Rooms - suits + 2 average rooms ABC Charity Annual Fundraising Event (Meeting) ABC Charity Annual Fundraising Event Average Rooms) Total daily estimated revenue March 7-8 estimated revenue 220,000 220.000 440,000 800,000 180,000 180.000 800,000 990,000 1,790,000 360.000 1,790,000