Revenue Math Problem Example | Topics and Well Written Essays - 750 words

Revenue - Math Problem Example Even though the property has never been renovated none of the hotels in its rating category has any advantages over it and changing the decor on a regular basis can be a means of making the place continually attractive to its clients. The hotel is close to public transportation which means that its guests do not have to go very far or get lost in order to obtain transportation. Additionally, there is direct access from the street to its food and beverage facility which means that this aspect of the business will be more successful than its competitors. It is expected that the food and beverage aspect of the business will provide similar level of revenue or probably more based on recent restaurant closures and the location of the facility. The hotel expects to have an above-fair market room share which means that its occupancy levels will be above the market average. Revenue generation This property has a number of avenues at its disposal to generate revenue. They include rooms, food and beverage, parking, laundry, telephone, entertainment and room service. This information is highlighted in the appendix. With an occupancy level of 60% and an ADR of $152 the property would be able to generate revenues from rooms of $705,580. This calculation takes into account rooms sold on week days (W/D) and weekends (W/E). Information gathered indicates that during quarter 1 of the previous years more leisure was demanded on weekends than on week days and so the rates were set higher on weekends than on week days. In the case of business the rates were higher on weekdays since this is usually the time when certain types of business like banks and service operations carry out their major activities. Corporate rates were also higher on weekdays than on weekends and so the information on occupancy and market mix was useful in this regard. The projections takes into account the maximize occupancy strategy. The use of this strategy will draw guests from other properties to this on e. Additionally, guests will get value for money and will return based on the distinctive characteristics of the property that sets it apart from the competition. The food and beverage facilities on the property should benefit tremendously from its proximity to public transportation and its access from the street. It has adequate space for the advertisement of the facilities. A guest survey that was done last year indicated that advertising was of great importance to all types of customers except tour groups. This would definitely help to boost not only the room revenue but food and beverage as well. Some restaurants recently closed their doors and this property stands to benefit from the lower number of restaurants in the area and the fact that none is scheduled to be built in the short term. Additionally, a number of corporate offices are opening in the area and this property stands tall with its distinct facilities which set it apart from its competitors. The property is expected to see approximately 700 additional persons for breakfast each day and this is considered very conservative, approximately 8,000 for lunch and 6,000 for dinner. This projection is based on the foregoing information as well as information obtained from the food and beverage performance and price points. Dinner followed by lunch is expected to be the main revenue generator. In terms of beverage from the bar there should be quite a bit of persons