# Essay on Revenue Management Exam Answer Key

Words: 2558
Pages: 11

Revenue Management Final Exam, 2010-11, Block C
Dr. Lily Lin, MBA, Mr. P. Griep, Dr. M. Lewison, & Dhr. F. de Vries

Student Name: __________________________________ Student ID: __________________

Below is a hotel case. You are required to answer all of the questions based on your theoretical knowledge and application skils:

* Terminologies/abbreviations in the case are a part of the exam. No additional explanation will be given..

* All necessary information is included in the case. If the information is not given, there is NO mistake. You are expected to use other given data in the case to make the calculation(s) in order to derive the needed information.

* Round up to one decimal at the end of your
The Hotel is underperforming the market in Group and Contract segement
Especially in its group segment the hotel is low in ADR

d. Recommendation…………………….(3 points)

The Hotel should focus on increasing business of two segments: contract and Group.

3. Hotel Beaux Arts is forecasting to sell the following roomnights for the month of March 2011:

March 4: 467 rooms
March 5: 320 rooms
March 6: 410 rooms
March 7: 525 rooms
March 8: 575 rooms
March 9: 580 rooms
March 10: 301 rooms

The Sales Department received a request for a group booking of 125 rooms starting March 5 for 5 nights. The average transient rate for March 2011 is Euro 216,- Revenue Management now needs to perform a displacement analysis to determine if it’s worthwhile accepting the group.

3.a Calculate the Break Even revenue in which there is no advantage or disadvantage to accept the group……………..(5 points)

Nr. Of displaced rooms: 315
Displaced revenue: 315 X 216 = Euro 68,040
Break even group rate therefore: 68,040/625 = 108.86

3.b The group has requested not only the rooms, but also conference space and F&B. They would like conference rooms for the 5 days for a total amount of Euro 120,000.- (total conference room revenue for the entire stay)
Furthermore they have requested F&B in the form of dinners and lunches with a total Sales price of Euro 86,750.- (total revenue for entire stay)
The CM of the meeting rooms is 93% and for