Module 4 - Case Study Caesars Palace Las Vegas made headlines when it undertook a $75...

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Module 4 - Case Study Caesars Palace Las Vegas made headlines when it undertook a $75 million renovation. During the renovation, the hotel closed its then-named Roman Tower, which was last updated 14 years prior, and started a major renovation of the 567 rooms housed in that tower. On January 1, 2016, the newly renamed Julius Tower reopened, replacing the Roman Tower. In addition to renovating the existing rooms and suites in the former Roman Tower, 33 guest rooms were added to the Roman Tower. With the renovation completed, Caesars expects the Julius Tower room rate to average around $150 per night. This increase, a $25 or 20% increase, reflects, in part, the room improvements. Julius Tower expects to have 16,000 room nights booked per month, which is a 88.88 % occupancy rate (16,000 rooms booked / (600 rooms available x 30 days per month)). Caesars' target operating income for Julius Tower is $2,000,000 per month. Assume that the annual fixed operating costs for the Julius Tower are $4,680,000. This amount represents an increase of $200,000 per year compared to pre-renovation. Also, assume that the variable cost per hotel room night after the renovation is $27; before the renovation, the variable cost per room night was $20. Instructions: Assume you work in the accounting department of Caesars Entertainment and your supervisor, Logan Lacy, provides you with the above information and asks you to use the What-if Analysis tool in Excel to analyze sales price volume and profit related to the Julius Tower. For the What if Analysis: Module 4 - Case Study Caesars Palace Las Vegas made headlines when it undertook a $75 million renovation. During the renovation, the hotel closed its then-named Roman Tower, which was last updated 14 years prior, and started a major renovation of the 567 rooms housed in that tower. On January 1, 2016, the newly renamed Julius Tower reopened, replacing the Roman Tower. In addition to renovating the existing rooms and suites in the former Roman Tower, 33 guest rooms were added to the Roman Tower. With the renovation completed, Caesars expects the Julius Tower room rate to average around $150 per night. This increase, a $25 or 20% increase, reflects, in part, the room improvements. Julius Tower expects to have 16,000 room nights booked per month, which is a 88.88 % occupancy rate (16,000 rooms booked / (600 rooms available x 30 days per month)). Caesars' target operating income for Julius Tower is $2,000,000 per month. Assume that the annual fixed operating costs for the Julius Tower are $4,680,000. This amount represents an increase of $200,000 per year compared to pre-renovation. Also, assume that the variable cost per hotel room night after the renovation is $27; before the renovation, the variable cost per room night was $20. Instructions: Assume you work in the accounting department of Caesars Entertainment and your supervisor, Logan Lacy, provides you with the above information and asks you to use the What-if Analysis tool in Excel to analyze sales price volume and profit related to the Julius Tower. For the What if Analysis:

Answer rating: 100% (QA)

WhatIf Analysis for Julius Tower at Caesars Palace Goal Analyze sales occupancy and profit for Juliu... View the full answer