Q2. Please make full displacement analysis based the following information:

Hotel A has 40 rooms. The average transient rate in March is $120. The variable room cost is $17 (per room).

The Windsor is also paying a management fee of 4% and a marketing fee of 3% of room revenue (both).

A local universitys business student alumni association plans a reunion. The group requests single rooms for $72 per room night, meals (breakfast $8, lunch $18, dinner $20), and other services for a 3-day event between March 6 8.

The following is the groups request:

Date	Rooms	Breakfast	Lunch	Dinner	Meeting room
03/06	21	21	0	21	-----
03/07	20	20	0	0	$200
03/08	20	20	15	0	$200
Total	61	61	15	21	$400

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

03/06	03/07	03/08
30	27	25

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

The hotels capture rate (% of transient guests purchasing a meal) and other relevant data per meal period for transient guests in March are as follows:

Meal	Price	Food cost %	Transient capture %
Breakfast	$10	30%	60%
Lunch	$25	34%	35%
Dinner	$30	32%	45%

Beverage costs and prices are the same for group guests and transients. The average beverage price is $5.00 and the average beverage cost is 20%. The organizer believes that 80% of the group members will purchase one beverage per day. The beverage capture rate of transient guests is 40%.