Question No. 4. A 5-star hotel has 200 rooms that has historically charged one set of prices for its room, which was Rs. 5000
Question No. 4. A 5-star hotel has 200 rooms that has historically charged one set of prices for its room, which was Rs. 5000 per night. The variable cost for one room includes cleaning, air-condition, soap etc. is Rs. 500 per room per night. Sales average was 100 rooms per night. Manager of the hotel wants to improve the revenue contribution and thus implemented two price levels for rooms. First is Rs. 7000 per night and second is Rs. 4000 per night. Average hotel booking for Rs. 7000 per night is 60 rooms and for Rs. 4000 per night is 70 rooms. How much additional revenue generated with this two price level schemes in comparison with single price level?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
1 Calculate the Revenue with a Single Price Level Price per Night Single Price Rs 5000 Average Rooms ...See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
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