Question list

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Question $1$

Question $2$

$\frac{x}{?},$ Question $3$

Question $4$

Required

Calculate the program contribution margin for each of the three programs, as well as for the group of customers not subscribing to the loyalty program. Which program is the most profitable? Which is the least profitable? Do not allocate fixed costs to individual rooms or specific loyalty programs.

Develop an operating income statement for Simsbury for the year ended December $31.$

What is the average room rate per night? What are average variable costs per night inclusive of the loyalty program?

Explain what drives the profitability $($or lack thereof$)$ of the most and least profitable loyalty programs $($again$,$ one of these may be the $"$no program" option$).$

The Simsbury Hotels chain embarked on a new customer loyalty program for the year. The year$-$end data have been collected, and it is now time for you to detemer loyalty levels. Following are son be continued, discontinued, or perhaps altered to improve characteristics of the hotel chain and its loyalty programs.

View the characteristics.

Note that an average Gold Customer would have received the $10\%$ discount for his or her first $15$ stays, received the $25\%$ discount for the next $25$ stays, and the $35\%$ discount only for the last $5$ nigh Assume that all program members signed on to the program the first time they stayed with one of the chair

Read the requirements.

Characteristics

Requirement $1.$ Calculate the program contribution margin for each of the three programs, as well as for th most profitable? Which is the least profitable? Do not allocate fixed costs to individual rooms or specific loy

Contribution $M$

$\backslash$table$[[$Loyalty Program Total Revenue Variable Costs Contribution Margin,Total Revenu$]]$

Silver

Bronze

No program

Total

$-x$

All new customers can sign up for the Simsbury Bronze Card$-$this card provides guests with a complimentary bottle of wine $($cost to the chain is $$5$ per bottle$),$ $$2$ in restaurant coupons $($cost to the chain is $$10),$ and $10\%$ off the nightly rate. The program enables the chain to track a member's stays and activities. Once a customer has stayed and paid for $15$ nights at any of the chain's locations worldwide, he or she is upgraded to Silver Customer status. Silver benefits include the bottle of wine $($cost to the chain is $$5$ per bottle$),$ $$26$ in restaurant coupons $($cost to the chain is $$13),$ and $25\%$ off every night from the twenty$-$first night on$.$ A customer who reaches the $40-$night level is upgraded to Gold Customer status. Gold status increases the nightly discount to $35\%$ and replaces the $$5$ bottle of wine with a bottle of champagne $($cost to the chain is $$30$ per bottle$).$ As well, $$36$ in restaurant coupons are granted $($cost to the chain is $$18).$ The average full price for one night's stay is $$170.$ The chain incurs variable costs of $$50$ per night, exclusive of loyalty program costs. Total fixed costs for the chain are $$127,520,000.$ Simsbury operates $11$ hotels with, on average, $400$ room each. All hotels are open for business $365$ days a year, and approximately average occupancy rates are around $80\%.$ The following are some of the statistics on the loyalty programs.

$\backslash$table$[[$Loyalty Program,$\backslash$table$[[$Average Number of$],[$Nights per Customer$]],],[$Gold$,2,600,45],[$Silver$,9,019,35],[$Bronze$,86,480,10],[$No program,$237,200,1]]$