Part C
Question 1
If Diamond Peak Hotel were to accept the religious group, then the daily total revenue for Monday, Tuesday and Wednesday would be $54400 while the total revenue for Thursday would be $68400. In total, the hotel would realize $231600 as the total revenue for the four days the religious group would spend in the hotel. On the other hand, if the hotel were to accept the corporate group without accepting any other group of visitors, then the daily total revenue for Tuesday and Wednesday would be $56900 while on Thursday the hotel would realize total revenue of $61900. In total, the hotel would realize $175700 from the corporate group. This means that in terms of total revenue, it would be advisable for the hotel to accept the religious group as opposed to accepting the corporate group (O’Fallon, & Rutherford, 2011).
In terms of RevPAR, it would also be advisable for the hotel to accept the religious group because this group has a value of 75.83 while the corporate group has a value of 62.61. With regard to total contribution, it would be advisable for the hotel to accept the religious group because this group would have a bigger contribution in comparison to the corporate group. Nevertheless, in terms of TRevPAR, it would be advisable for the hotel to accept the corporate group because this group has a score of 98.96 for the first two days while the religious group has a score of 94.61 for the first three days except on Thursday. In relation to these findings, it would be advisable for the hotel to accept the religious group based on total revenue, RevPAR and total contribution, but it would be advisable for the hotel to accept the corporate group based on TRevPAR.
Question 2
For the group paying room rates, the best occupancy percentages should be the one closer to 100%. This means that any group with high room rates should have high occupancy percentages almost equal to 100% for that group to give the hotel an average daily rate of $130. If this would be the case, it would affect the general manager’s decision because the manager would go for the highest occupancy percentage. In other words, the general manager would go for the highest occupancy rate that would produce the highest average daily rate (O’Fallon, & Rutherford, 2011).
Question 3
If I were the general manager for the hotel, my first option would be to try to convince one group to hold its function one week before the first week of the month of October for this would be the best option for the hotel. However, if this would not be possible, then I would recommend that we host the corporate group together with the fraternity business. Hosting the two groups would be advantageous to us because we would host two groups and at the same time maximize our opportunities. We would be able to host two groups and serve other members of the public. That is, in total we would have (125 + 300 = 425) guests plus 150 more guests. For this reason, the hotel would generate maximum revenue on Tuesday and Wednesday. On the other hand, if we were to host the religious group and probably the fraternity business, then the hotel might not generate such revenue. I would however opt for the corporate group and fraternity group if the first option would not work.
Reference
O’Fallon, M. & Rutherford, D. (2011). Hotel management and operations. Hoboken, NJ: John Wiley & Sons, Inc.