You are the revenue manager of a 400-room hotel and you have just received a new group inquiry from your director of sales. Use the Spreadsheet  attached "Group Evaluation and Sales Mix Proposal" worksheet to determine the profitability of this potential group.

The group would like to confirm 165 guest rooms arriving on Monday April 25 for 3 nights.

• The group will spend $10,000 per day on food and beverage.
• Their budget is $275 per night.
• The transient rate that would be displaced on those nights would be $350.
  Complete the data in the yellow highlighted cells on the Spreadsheet Part 1 tab.

Based on the findings in the summary section at the bottom, answer the following questions in a 300-400-word report back to the director of sales:

1. 1. Would this group be profitable for the hotel? What additional profit would the group bring to the bottom line?
2. 2. What recommendations do you have for the director of sales to negotiate with the group to make the business more attractive to the hotel?

Some factors to take into consideration:

• What will the group spend in addition to rooms?
• What is the profit on the additional amount spent by the group? (Food and beverage have lower profit margins than rooms.)
• What additional catering/banquet revenue could the director of sales propose to the group?
• Is the group commissionable? (Travel agent commissions are typically 10% of rooms revenue.)

 

Transcribed Image Text:

GROUP EVALUATION Hotel Capacity: Group Name: Arrival: Day of Week Date Transient Demand Forecasted Group Definites Total Demand New Group Opprtunity Room Nights Total Estimated Roomnight Displacement New Catering Revenue Summary: New Group: Displaced Transient. Rooms Profit New Group F&B Meeting Room Rental Total Group Profit 50 4/25/22 SUN MON TUE 4/24/22 4/25/22 4/26/22 150 325 325 400 200 200 0 Rooms 0 0 75 400 400 0 Initech ADR 75 400 400 0 WED 4/27/22 325 $0 75 400 400 0 Revenue Profit % $0 $0 75% 30% 90% THU 4/28/22 250 50 300 300 0 Profit $0 $0 $0 $0 0 $0 FRI 4/29/22 280 330 330 0 SAT 4/30/22 350 50 400 400 0 0 0 $0 GROUP EVALUATION Hotel Capacity: Group Name: Arrival: Day of Week Date Transient Demand Forecasted Group Definites Total Demand New Group Opprtunity Room Nights Total Estimated Roomnight Displacement New Catering Revenue Summary: New Group: Displaced Transient. Rooms Profit New Group F&B Meeting Room Rental Total Group Profit 50 4/25/22 SUN MON TUE 4/24/22 4/25/22 4/26/22 150 325 325 400 200 200 0 Rooms 0 0 75 400 400 0 Initech ADR 75 400 400 0 WED 4/27/22 325 $0 75 400 400 0 Revenue Profit % $0 $0 75% 30% 90% THU 4/28/22 250 50 300 300 0 Profit $0 $0 $0 $0 0 $0 FRI 4/29/22 280 330 330 0 SAT 4/30/22 350 50 400 400 0 0 0 $0

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Report to the Director of Sales Group Evaluation and Sales Mix Proposal Group Name Initec... View the full answer