1) Tom Rodgers is the director of purchasing of Dart Industries. Tom is responsible for booking 1,000 rooms per month in the city that houses his company’s corporate office. Tom approaches you, the DOSM/RM of the local Hawthorne Suites hotel, with a proposition. Instead of paying $159.99 per night; your hotel’s normal room rate for corporate travelers, he proposes the following rate structure: Per month Room Rate 1 to 100 $159.99 101 to 400 $139.99 401 to 600 $119.99 601 to 1,000 $109.99 A. Calculate the room revenue your hotel would receive if Tom booked: Room Purchased ADR Total Revenue 250 rooms Q1 Q2 350 rooms Q3 Q4 401 rooms Q5 Q6 B. Assume the variable cost associated with selling each room is $65.00. Calculate the “after variable costs” revenue your hotel would receive if Tom booked: Rooms Purchased Variable Cost @ $65 per room After variable cost Revenue 250 rooms Q7 Q8 350 rooms Q9 Q10 401 rooms Q11 Q12
1) Tom Rodgers is the director of purchasing of Dart Industries. Tom is responsible for booking 1,000 rooms per month in the city that houses his company’s corporate office. Tom approaches you, the DOSM/RM of the local Hawthorne Suites hotel, with a proposition. Instead of paying $159.99 per night; your hotel’s normal room rate for corporate travelers, he proposes the following rate structure:
| Per month | Room Rate |
| 1 to 100 | $159.99 |
| 101 to 400 | $139.99 |
| 401 to 600 | $119.99 |
| 601 to 1,000 | $109.99 |
A. Calculate the room revenue your hotel would receive if Tom booked:
| Room Purchased | ADR | Total Revenue |
| 250 rooms | Q1 | Q2 |
| 350 rooms | Q3 | Q4 |
| 401 rooms | Q5 | Q6 |
B. Assume the variable cost associated with selling each room is $65.00. Calculate the “after variable costs” revenue your hotel would receive if Tom booked:
| Rooms Purchased | Variable Cost @ $65 per room | After variable cost Revenue |
| 250 rooms | Q7 | Q8 |
| 350 rooms | Q9 | Q10 |
| 401 rooms | Q11 | Q12 |
2) You will find examples of differential pricing strategies as applied in different contexts of the hospitality industry. You will be asked to match the example to the correct type of strategy being applied.
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