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 Estimated Demand Room Rate Days (rooms/day) $160 Mon, Tue, Wed, Thur 500 Fri, Sat, Sun 200 $175 Mon, Tue, Wed, Thur 350 Fri, Sat, Sun 125
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 Estimated Demand Room Rate Days (rooms/day) $160 Mon, Tue, Wed, Thur 500 Fri, Sat, Sun 200 $175 Mon, Tue, Wed, Thur 350 Fri, Sat, Sun 125
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 9E
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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?
Transcribed Image Text: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
Estimated Demand
Room Rate
Days
(rooms/day)
$160
Mon, Tue, Wed, Thur
500
Fri, Sat, Sun
200
$175
Mon, Tue, Wed, Thur
350
Fri, Sat, Sun
125
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