Guest Service management III Chapter 1

Describe the following concepts:

1. A Brief History of Quality Management:

During the early days of manufacturing, an operatives work was inspected and a decision made whether to accept or reject it. As businesses became larger, so too did this role, and full time inspection jobs were created. Accompanying the creation of inspection functions, other problems arose: More technical problems occurred, requiring specialized skills, often not possessed by production workers The inspectors lacked training Inspectors were ordered to accept defective goods, to increase output Skilled workers were promoted into other roles, leaving less skilled workers to perform the operational jobs, such as manufacturing These changes led to the birth of the separate inspection department with a chief inspector, reporting to either the person in charge of manufacturing or the works manager. With the creation of this new department, there came new services and issues, e.g, standards, training, recording of data and the accuracy of measuring equipment. It became clear that the responsibilities of the chief inspector were more than just product acceptance, and a need to address defect prevention emerged. Hence the quality control department evolved, in charge of which was a quality control manager, with responsibility for the inspection services and quality control engineering. In the 1920s statistical theory began to be applied effectively to quality control, and in 1924 Shewhart made the first sketch of a modern control chart. His work was later developed by Deming and the early work of Shewhart, Deming, Dodge and Romig constitutes much of what today comprises the theory of statistical process control (SPC). However, there was little use of these techniques in manufacturing companies until the late 1940s. At that time, Japans industrial system was virtually destroyed, and it had a reputation for cheap imitation products and an

illiterate workforce. The Japanese recognized these problems and set about solving them with the help of some notable quality gurus Juran, Deming and Feigenbaum. In the early 1950s, quality management practices developed rapidly in Japanese plants, and become a major theme in Japanese management philosophy, such that, by 1960, quality control and management had become a national preoccupation. By the late 1960s/early 1970s Japans imports into the USA and Europe increased significantly, due to its cheaper, higher quality products, compared to the Western counterparts In 1969 the first international conference on quality control, sponsored by Japan, America and Europe, was held in Tokyo. In a paper given by Feigenbaum, the term total quality was used for the first time, and referred to wider issues such as planning, organization and management responsibility. Ishikawa gave a paper explaining how total quality control in Japan was different, it meaning companywide quality control, and describing how all employees, from top management to the workers, must study and participate in quality control. Companywide quality management was common in Japanese companies by the late 1970s. The quality revolution in the West was slow to follow, and did not begin until the early 1980s, when companies introduced their own quality programs and initiatives to counter the Japanese success. Total quality management (TQM) became the center of these drives in most cases. In a Department of Trade & Industry publication in 1982 it was stated that Britains world trade share was declining and this was having a dramatic effect on the standard of living in the country. There was intense global competition and any countrys economic performance and reputation for quality was made up of the reputations and performances of its individual companies and products/services. The British Standard (BS) 5750 for quality systems had been published in 1979, and in 1983 the National Quality Campaign was launched, using BS5750 as its main theme. The aim was to bring to the attention of industry the importance of quality for competitiveness and survival in the world market place. Since then the International Standardization Organization (ISO) 9000 has become the internationally recognized standard for quality management systems. It comprises a number of standards that specify the requirements for the documentation, implementation and maintenance of a quality system. TQM is now part of a much wider concept that addresses overall organizational performance and recognizes the importance of processes. There is also extensive research evidence that demonstrates the benefits from the approach. As we move into the 21st century, TQM has developed in many countries into holistic frameworks, aimed at helping organizations achieve excellent performance, particularly in customer and business results. In Europe, a widely adopted framework is the so-called Business Excellence or

Excellence Model, promoted by the European Foundation for Quality Management (EFQM), and in the UK by the British Quality Foundation (BQF). 2. What Is Quality Management?

By definition are management activities and functions involved in determination of quality policy and its implementation through means such as quality planning and quality assurance (including quality control). There are several ways to measure quality like reports or customers satisfaction. The manager(s) are in charge of keeping a minimum of quality using standards as tools.

3. Complaints Handling:

To generate Loyalty, Goodwill and Word-of-Mouth by talking back when they believe they have not received their money's worth, consumers give businesses an opportunity to correct the immediate problem and restore goodwill. Experience shows that consumers who complain about products and services continue to frequent the businesses and buy the products they complain about if they believe the complaint was resolved fairly. Careful complaint management can save business unwanted costs. For example, negative word-ofmouth publicity from dis satisfied consumers means lost revenue and necessitates additional investment in advertising to attract replacement customers. Complaints and complaint trends tell business how to do its job better by alerting management to problems that need prompt attention and correction. Furthermore, they indicate long-range opportunities for product innovation and problem prevention. A well-planned system for screening and recording complaint data can provide business owners and managers answers to such important questions as the following:

Are products "oversold" or "over advertised?" Is advertising clearly understood? Are salespeople overzealous? Do product disclosures (such as labeling, warranty information and service agreements) need to be improved? Are user's manuals clear, complete and easy-to-read? Would changing warranty coverage reduce complaints?

To handle complaints the right way quality policies must be applied.

Complete the following:

1. Definition of "Service.": A service is a set of activities that seek to respond to the needs of a client. It defines a framework where the activities will be developed with the idea of setting an expectation in the outcome. It is the non-material equivalent of a good.

A service is the result of carrying out necessarily at least one activity at the interface between the supplier and the customer and is generally intangible. The provision of a service may involve: An activity performed on a tangible product provided by the client (for example, a car repair); An activity carried out on an intangible product supplied by the client (for example, the Declaration of income needed to prepare the return of taxes); The delivery of an intangible product (for example, the delivery of information in the context of the transmission of knowledge); The creation of an atmosphere for the client (for example, in hotels and restaurant)

2. Frame some quality guarantees broad enough to appeal to guests and narrow enough to assure satisfactory delivery by the hotel staff:

Excellent attention/personalized service Quick response to complains First quality food products Clean rooms Clean public areas

3. Forestall if possible, and if not possible, to receive, digest and respond properly to a variety of guest complaints:

The process to handle a complain requires of a series of requirements and steps that makes the guest complain be solved in an efficient and respectful way:

Step-1: When a guest with a complaint or request approaches you, follow the basic steps of Making It Right. Listen: Listen intently making mental notes, with the right body language- put on a serious face, nod your head. (Take notes if the information is very detailed and specific) Apologize with Empathy: Apologize and put yourself in the guests situation. No matter how insignificant the matter is to you, it must be dealt with seriously. Find a Solution: All problems have a solution thats the approach to use. Try and find the simplest and clearest solution. If you are unable to, inform a supervisor or manager. Follow Through: After the problem has been resolved, go back to the guest to ensure he is satisfied. Even if the problem is being solved by someone else, you were the one who the problem was brought to- follow through accordingly. Take personal responsibility of the issue. Step-2: The guest, who is complaining, should be informed of the action(s) being taken every step of the way. If you are unaware of what to do, inform the guest that you will inform a Supervisor/Manager and follow up with him/her within the next 10 minutes. Just tell the guest: Mr/Mrs/Miss X I will inform the situation to my Supervisor/Manager and I shall revert back to you within the next 10 minutes. Step-3: Inform the Supervisor/Manager of the situation make sure to give him/her all the information, including a background on the guest. Step-4: Supervisor/Manager must contact the guest and explain to him/her that he/she has been informed about the situation. The Supervisor/Manager must apologize for the situation and offer him/her an alternative or plus him/her with something that the guest feels outweighs the problem. If the guest is still not satisfied, the Department Head must be informed. Step-5: After a solution has been reached, the key person who dealt with the guest on this case should go back and check to see if the guest is satisfied.

Step-6: A log must be maintained detailing the situation. Step-7: The entire Making it Right procedure should be completed within 24 hours.

Always Never Provide all the Come up with a information in the log decision if you are unsure Ensure you revert to Neglect any minor the guest every step complaint of the way.

Define the following professional vocabulary: 1. Quality guarantees: Refers to the systematic measurement, comparison with a standard, monitoring of processes and an associated feedback loop that confers error-prevention. This can be contrasted with Quality Control. which is focused on process outputs. In other words is the assurance that the costumer will obtain what was offered, certified by a series of processes. 2. The Iceberg Effect: Up to 90% of the mass of an iceberg is below the waterline and invisible. Thats not too different from the average company. Today, performance, value and profits come from intangibles like people, knowledge and relationships, none of which are visible in traditional financial and management information. Many consider these intangibles to be soft assets, nice to know about but not worthy of a lot of attention. Nothing could be further from the truth. In fact, thats the kind of thinking that sent the Titanic to the bottom of the sea. These intangibles, which together form the intellectual capital of the modern business, have fueled the incredible wealth of smart companies in the past decade. Yet most companies still lack basic information about their intangibles. The intangibles information gapaka the iceberg effectis a big problem. It forces managers to make decisions based on instinct rather than hard data. It limits the ability of boards of directors to see the full picture of a companys health. It lowers the value that analysts can ascribe to an investment Limited decisions, limited oversight, limited valuations. Its time to close the gap.

3. Service Culture: Businesses need satisfied customers in order to survive and thrive. In a customer service culture, a business organizes itself according to customer needs to remain sustainable. This strategy encourages customer loyalty. Customer service cultures share traits
based on interaction with customers. These traits emphasize communication with the customer and well-trained employees.

Define the following words: 1. Check-In: It is the technical name for the registration process a guest has to go thru before the receptionist gives him the assigned room. In the check the guest gives his information to the recepcionist for confirmation. Then the receptionist proceeds to complete the registration and gives the guest the room number and room key. 2. Check-Out: Is the process a guest has to go thru wen leaving a hotel. At this moment the guest confirms his departure and all charges are made if the receptionist confirms they exist. 3. Quality Management: The act of overseeing all activities and tasks needed to maintain a
desired level of excellence. This includes creating and implementing quality planning and assurance, as well as quality control and quality improvement. It is also referred to as total quality management (TQM).

4. Total quality management: It is a management-oriented strategy to raise awareness of quality in all organizational processes. TQM has been widely used in manufacturing, education, Government and service industries. Total is called because it is concerned the globally considered company and people working in it. 5. Concierge: A hotel concierge is in charge of the guests satisfaction. Basically a concierge work is to make sure that the guest feels comfortable and if required by him respond to any demand maintaining a high level of discipline and charm.

Short Answer Essay Question To complete this assignment successfully, you should: 1. Identify one front-office complaint that can be anticipated because it appears again and again in the normal course of operations.

Electronic key de-configuration: usually guests complain about electronic cards not functioning. Depending on the time it produces may be different reasons for this trouble.

2. Offer a standard best-practice (from all the responses presently used by different employees and shifts) to be used hereafter whenever the item discussed above occurs:

If the complain is produced during the arrival time there is a big probability that the receptionist made a mistake when configuring the key the solution would be to double check making twice if necessary the key. If the complain is produced during the stay it is probable because of the miss use of the key. Leaving the key near a cellphone or any electronic device de-configures. The solution would be to let know the guests how to use the key.

Answer the following: 1. Operates on a rotation system. The next in line to room a guest is referred to as a "front." In addition to actually rooming the guest, these employees verbally discusses and promotes hotel facilities, transports the guest's luggage, verifies the operation of various in-room functions, gives the room a final inspection, and develops a professional relationship with the guest. A. Housekeeping Department. B. Reception Department. C. Bell Department. D. Guest Service Department.

2. This process provides the hotel an opportunity to demonstrate its level of customer-service. Budget properties offer little or no service aside from a front desk clerk who registers the guest. On the other side of the spectrum, full-service operations offer a wealth of opportunities for guest-employee interaction. These moments of truth might include encounters with the valet parking attendant, the doorperson, the bell person, the front office clerk, and the concierge. A. Guest Departure B. Guest Complain C. Guest Registration D. Guest Arrival

3. During this specific moment the front office clerks wear a number of different hats--they greet the guest, attempt to upsell the guest to a nicer (and costlier) accommodation, check the guest's credit and open a hotel account, assign a room and a rate, verify personal data (e.g. departure date, party size, corporate name, spelling, address), obtain a signature on the registration card, and promote other hotel facilities.

A. Guest Departure B. Guest Complain C. Guest Registration D. Guest Request

4. In tight occupancy situations, clerks pre-block guest accommodations in an effort to align reservation requests with available room types. When assigning the room at check-in, many property management systems prompt the clerk to upsell the guest to a nicer accommodation. A. Room Selection B. Room Block C. Room Cleaning D. Room Change

5. In an effort to provide guests an alternative to waiting in a check-in line, many corporate hotels provide this type of check in. Most such systems require the guest to have an existing reservation and major credit card. Because of the impersonal nature of such systems, hotels experience higher rates of upselling with this check in system than with personal selling by front office. A. Online Check -In B. Self-Check-In Kiosks C. Self-Check-Terminal D. Pre Check-In

Complete the following: 1. Restate the staff members a guest might meet upon arrival at a full-service hotel: Gate security (Not necessarily), valet, doorman, bellboy, concierge (if needed), and receptionist.

2. Identify the information and items which change hands between the front desk and the guest during the room registration encounter: Welcome greeting, then the receptionist ask for the name in case of a reserve was made, if it was a made then ask for an identification, checks the reservation, confirms and in case there is another person staying in the room asks for his identification as well. If no reservation was made the receptionist will proceed to ask for the type of room, preferences and number of guests, then checks availability and proceeds to ask an identification and guests identification as well. Also it is necessary in some hotels to give credit

card information or a deposit in guarantee. In both cases the next step is to give the key and additional information (if required) to the guest.

3. Detail the room selection process: There are two major factors involved in the process of selection of a room, the guests requirements or needs and the hotel availability. The first thing a receptionist asks the guests is if they are alone or if there is more people staying,. From here depending on the information given the receptionist will give a single, a double or maybe a special executive room depending on availability, and proceeds to assign the room or rooms that fit the guest needs.

4. List key points of information on the guest registration card: Full name, ID number if is a local, date of departure, phone number, signature, plan or method of payment, credit card information for guarantee and names other guests related.

Answer the following:

1. The next bellperson whose turn it is to room a registered guest is known as a _______. Because the best chance at receiving a gratuity comes when rooming the guest, bell departments operate on a rotation system where each bellperson must move through the other positions before having a turn to service a guest. A. back. B. front C. last D. line 2. Whenever a guest encounters an employee, there is a ____________. Most pass successfully because the trained employee is capable of providing a level of service in keeping with the guest's expectations. Poor training causes a failure, which result in dissatisfying encounters. A. momentum B. moment of truth C. dirive ? D. instant. 3. In an effort to accurately assess customer service levels being provided the average guest, many hotels employ outside mystery or "secret" shopper services. Acting as a typical guest might, these companies provide management with detailed observation reports on all areas of the front of the house.

A. Auditing B. Review C. Assestment D. Mystery Shoppers 4. It refers to a mathematical analysis of several related processes, including arriving, waiting and being served. Adequate attention to staffing, training, high expected arrival and departure patterns leads to a reduction in guest dissatisfaction and lead to happier guests. A. Check In Theory. B. Queuing Theory. C. Waiting Theory. D. Queuing Theory. 5. Information collected during the reservation is preprinted for use on the day of arrival. At checkin, guests are asked to read and sign it. Signatures serve as legal purpose (that the guest has read and agrees to all disclaimers and legal agreements set forth on this document) as well as to verify the accuracy of personal information such as name spelling, address departure, etc). A. Tourist Card B. Bin Card C. Registration Card D. Confirmation Card 6. Assigning a nicer room accommodation at no additional charge is known as _____________. One common reason for this is when there are no accommodations of the room type reserved still available. As an added thank-you, corporate hotels routinely promote business guests when the hotel is not filled. A. promote B. improvement C. sponsor D. upgrading.

7. While upgrading provides a nicer room at no additional charge, _________ charges the guest for the nicer accommodation. Attempts at doing this are usually made at time of reservation as well as at check-in. A. selling B. promotion C. upselling D. extra 8. The bellperson who has just completed rooming the guest (a "front") returns to the back of the rotation sequence. How is this position known?

A. Front B. Last C. Previous D. Final

Define the following words: 1. Registered, Not Assigned (RNA): Is a code given to guest that made a reservation but have not been assigned yet to a room. 2. Property Management System (PMS): Are software used in the hotel management allows users to now the status of the different departments resources such as availabilities, reservations, ballrooms blocks, room rates, revenue information among others. Based on the information given by this software usually in the form of reports managers take decisions. 3. Folio: A folio is a number given to a reservation to allow classification and a better handling of the gust information. 4. Did Not Stay (DNS): Code used to label guest that pay for the night but leave before using the room.

Short Answer Essay Question 1. Briefly identify and discuss (in order) each stage of the guest arrival in a full-service corporate hotel. 1st Stage Arrival: during the arrival the gust will be received by a valet or a doorman depending on the way the arrival is done. the valet or the doorman reception should be very careful and attentive because this moment represents the first contact of the guest with the hotel, because of this it is possible to say that at this point the first moment of truth of the arrival cycle is produced. Next the guest service personal or the bellboy will scort the guest to the front desk for the check in process and maybe offer him something to drink.

2nd Stage registration: The receptionist is in charge of set the guest in a comfortable mood while making the registration. The way the guest is received by the receptionist and the protocol adopted by this helps the registration process by a pleasant task for both the receptionist and the guest. At this point is needed to say that the registration form information is recquired by the receptionist, and then he will give all the information related to the hotel to the guest.

3rd stage rooming: Once the registration is completed the receptionist will assign the guest rooming to a bellboy, and in the most efficient, charismatic and helpful way the bellboy will lead the guest to room assigned. During this process the bellboy will give additional information of the hotel facilities and maybe one or two tips about service.

2 Try to recall a particular experience as a guest arriving at a hotel. What was the most important service to you at arrival?. Describe why you think this Service mattered most to you.

The check in process, is the most important service because it is a moment of truth and it can become a tedious task after a long travel, and it is a very common picture to see guests waiting for rooms because of a poor reservation filling, a reception congestion, or a room not cleaned yet. To avoid this it is important to support the registration process with an efficient front desk system and capable staff. Making the check in process easier allows the guest get a quick access to the facilities and the fun or relax time, depending on the hotel target. Also depending on this experience the guest might be open to accept an upselling offer.

Select the correct answer: 1. Determining the rate is a matter of both economics and market forces. No rate calculation is one hundred percent accurate, but each provides management a general indication of how and where to price the room in order to cover costs and earn a reasonable return on investment. Two of the most common room rate calculations are the Hubbart Room Rate Formula and The Building Cost Room Rate Formula. Another, the Ideal Average Room Rate, is a theoretical average rate against which management can compare actual room rate performance.

A. Assorted Room Rate Formulas. B. Assorted Room Rate Formulas. C. Assorted Room Rate Formulas. D. Assorted Room Rate Formulas.

2. The act of lowering the retail (rack) rate of a room in order to stimulate demand is known as ____________. Although it seems logical in theory, widespread discounting has hurt the lodging industry. Little, if any, new demand (occupancy) is ever created by reduced prices. Rather, guests are merely attracted from one property to another because of the more favorable discounted rates. Although the discounting property experiences a short-term surge in occupancy, the phenomenon is only temporary. In retaliation, other properties undoubtedly reduce their rates, occupancy returns to its previous levels, and profits suffer from the overall reduction in room prices.

A. discounting. B. descending. C. lowering. D. decreasing.

3. Demand for most products is elastic--when the price goes down, increased new demand results. Demand for some types of hotels is actually inelastic--lowering the price creates little or no new demand. The hotel industry has always believed it is relatively inelastic. That is, reductions in rate produce less new business than is lost from lowering the unit price. Different markets have different degrees of elasticity. Tour properties are more elastic, and commercial demand is more inelastic. Hotels experience different degrees of elasticity according to the season. A. Elasticity of Offer. B. Elasticity of Rate. C. Elasticity of Demand. D. Elasticity of Price.

4. Time is Money: Although rooms are sold by the day, as opposed to the hour, time is still a factor incertain aspects of the room charge. Very early check-ins and late check-outs are commonly assessed a fee for guests who spend a significant amount of additional time in the room. Likewise, many hotels offer day rate rooms for limited hours between say 8am and 4pm. American Plan resorts are especially alert to check-in and check-out times in order to account for the number of meals guests receive on arrival and departure. A. True B. False

Define the following words: 1. Day Rate: day rates are rooms that can be rented for a single day at a time, not multiple days, and cannot be used for overnight stays. 2. Double Occupancy: When two people stay in one room. 3. Employee Rates: Most hotel chains extend special rates to their employees when they travel within the chain. 4. Lodging Taxes: The lodging tax is imposed on the total gross receipts charged for sleeping accommodations furnished by a hotel. 5. Per Diem: Expression from Latin, meaning per day.

6. Rack Rate: The published retail price of a room. 7. Rate-Cutting: Is a reduction in the room rate. Rate cutting functions in an inelastic market. Rate cutting aims at the guest already staying in a competitors hotel across the street. 8. Arrival Time: Is an information item 9. Hubbart Room Rate Formula: The hubbart formula considers such factors as operating expenses, desired return on investment, and income from various departments in the hotel to establish room rates. This method relies on the front office to produce income to cover operating expenses, overhead, and return on investment for the hotel operation. 10. Building Cost Rate Formula: 1/1000th of the total cost of construction(and equipment) of the property assumes an average occupancy of 65% Therefore, for every 1000 invested, one calculates 1 average room price, per room. 11. Ideal Average Room Rate: The Ideal Average Room Rate is a hypothetical yardstick against which to measure actual room rate performance. The ideal rate suggests that all price categories in the hotel (suites and standards alike) are sold with equal weight.

Complete the following: 1. List at least ten types of discounts commonly offered hotel guests: Groups discount, low season discounts, couples discount, newliweds discounts, corporate rates, previous reservation discounts, tour operators discounts, mature guests discounts, service discounts, kids discounts and gift shops discounts. 2. How do you calculate a Hubbart Room Rate Formula? E.O.C. + R.O.I. - I.O.S. = A.R.R. R.M.S. (Minimum Average Room Rate) Where: E.O.C = Estimated Operating Costs. R.O.I. = Return on Investment or return on capital R.O.C. I.O.S = Income for other resources. R.M.S: Number of rooms sold.

a) Calculate the hotels desired profit by multiplying the desired rate of return (ROI) by the owners investment. b) Calculate pre-tax profits by dividing the desired profit by 1 minus hotels tax rate. c) Calculate fixed charges and management fees. This calculation includes estimating depreciation, interest expense, preperty taxes, insurance, amortization, building mortgage, land, rent, and management fees. d) Calculate undistributed operating expenses. This includes estimating administrative and general expenses, data processing expenses, human resourecs expenses, transportation expenses, marketing expenses, property operation and maintenance expenses, and energy costs. e) Estimate non-room operating department income or loss, that is, F&B department income or loss, telephone department income or loss f) Calculate the required room department income which is the sum of pre-tax profits, fxed charges and management fees, undistributed operating expenses, and other operating department losses less other department incomes. g) Determine the rooms department revenue which is the required room department income, plus other room department direct expenses of payroll and related expenses, plus other direct operating expenses. h) Calculate the average room rate by dividing rooms department revenue by the expected number of rooms to be sold.

3. How do you calculate a Building Cost Room Rate Formula? The axiom behind this formula is the room rate should equal $1 for every $1,000 of construction costs. Although far from accurate, this approach provides a quick glimpse at approximate room rate requirements. 4. How do you calculate an Ideal Average Room Rate?
Hotel revenue divided by the number of rooms sold. Hotels use this measure to calculate the average price at which they are booking hotels each night. so, if a hotel made $50,000 and sold 200 rooms, it ADR would be 50,000 / 200 = $250.

5. What are the basic steps of up-selling the room rate to a registering hotel guest? 1. 2. 3. 4. 5. Quickly determine the reason of the travel asking the guest without being annoying. Indentify the needs of the guest Check availability and promotions Make an offer to guest letting him know all the benefits of the upgrade Keep track of the upgraded clients to keep loyalty

6. Show why high lodging taxes harm the industry and explain current lodging tax trends: It is common that cities in the case of the United States for example establish an average 3 to 5 percent of taxes to hotels. These taxes usually represent a benefit to the community because it is

perceived as an income received from tourists and guests. The problem comes when guests find that the taxes are too high in a specific city or area. The most common consequence will be a reduction of city incomes by tourism and hotel industry. Because of this a careful study of the infrastructure and touristic value of a determined zone has an important role in the tax establishment.

Short Answer Essay Question 1. Based upon the following information, calculate the Hubbart Room Rate required assuming a 70% annual occupancy rate: A given hotel has 150 rooms. Operating expenses run about $910,650 annually. Depreciation is scheduled at $445,500 per year. Additional costs (taxes, insurance, etc.) are expected to be about $126,950 for the year. The owners require a reasonable return of $750,000 per year for their investment. Net income from other operated departments is projected to be $400,000 annually. Operating expenses: $910,650 + Depreciation: $445,000 + Additional costs: $126,950 + Return Required: $750,000 -Income from other operated departments: $400,000 / # of rooms: 150 * 70% = 105 * 365 Days = 38,325 room nights Room Rate: $47,81 2. Based upon the following information, calculate the ideal room rate: The hotel has 150 rooms (75 kings at $75 single and $85 double, 50 deluxe kings at $100 single and $120 double, and 25 mini-suites at $140 single and $160 double). Double occupancy is projected at 10% for kings, 20% for deluxe kings, and 50% for mini-suites.

150 Hab (a)

Rates (b)

Occupation Percentages (c) 90% 10% 80% 20% 50% 50%

Type of Room Occupation cxa=d 67.5 7.5 40 10 12.5 12.5

75 King 50 D. King 25 M. Suites

$75 $85 $100 $120 $140 $160

Income per room type single and double occupation dxb=e $5062,5 $637,5 $4000 $1200 $1750 $2000

Total Income per type Of room (f) $5700 $5200 $3750

Ideal Room Rate Per Room Type f/a $76 $104 $150

Ideal room Rate

f/150 rooms = IRR

$97.6