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# Hotel Pricing

Question # 00084362
Subject: Statistics
Due on: 07/24/2015
Posted On: 07/23/2015 11:03 AM

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Answer in Excel using Excel Functions (don’t just put answer in cell)

Hotel Room Pricing

A hotel has 500 rooms. During a typical week in the holiday season, the hotel is busy on Monday, Tuesday, Wednesday, and Thursday nights, primarily with business people, but there is generally space available on Friday, Saturday, and Sunday nights.

Hotel management provided the following demand estimates, as shown in Table 8.1:

Assume linear demand functions over the range of all non-negative room rates and demands.

Table 8.1: Demand Estimates

: Room Rate ' : Days. , Estimated Demand' (rooms/clay)

\$160 Mon, Tue, Wed, Thur 500

\$160 Fri, Sat, Sun 200

\$175 Mon, Tue, Wed, Thur 350

\$175 Fri, Sat, Sun 125

· What is the revenue-maximizing room rate if the hotel posts only a single rate good for any day of the week? What weekly occupancy results?

· What are the revenue-maximizing room rates if the hotel posts a "mid-week" rate good for the peak demand period (MTWT), and a different "weekend" rate good for Friday, Saturday, or Sunday. What is the new weekly occupancy? What is the revenue increase?

· Another option is for the hotel to offer a discounted weekly rate in order to attract vacationers who will stay for the full week. Management estimates that demand will be 40 per week at \$900/week and 160 per week at \$800/week. Again assume a linear demand curve.

· If the hotel posts a weekly rate and a single daily rate (good for any night), what are the revenue-maximizing prices? What is the occupancy rate? What is the revenue gain?

· If the hotel posts three rates: a mid-week rate, a weekend rate, and a weekly rate, what are the revenue-maximizing prices? What is the occupancy rate? What is the revenue gain?

Overbooking

You have 100 hotel room/nights to sell at \$300 each. The no-show rate for bookings is 10%. The cost of looking after a customer with a reservation whom you cannot provide with a room is \$1,000. How many reservations should you accept?

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#### Hotel Room Pricing

Tutorial # 00079231
Posted On: 07/24/2015 03:55 AM
Posted By:
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Preview: increase xxxx be xxxxxxxxxx \$30375 Thus, xxxxx will prefer xx keep xxxxxx xxxxx for xxx week If xxx hotel posts x weekly xxxx xxx a xxxxxx daily rate xxxxx for any xxxxxxx what xxx xxx revenue-maximizing xxxxxxx What is xxx occupancy rate? xxxx is xxx xxxxxxx gain?The xxxxx can maximize xxxxxxx by introducing x weekly xxxx xx \$800 xxx single daily xxxx of \$160 xxx revenue xxxx xx \$1312000 xxx occupancy will xx 860 The xxxxxxx gain xxxx xx.....