Question

2. Solent Hotel has 3,000 rooms available each year. The operational data for the past three years is as follows: #of Rooms Average Daily Rate (ADR) (S) Years Sold Room Revenue ($) 2007 2,100 45.00 94,500 2008 2.130 47.00 100,110 105,840 2009 2.160 49.00 Based on the operational data, budget the room revenue for Solent Hotel in 2010. Also, calculate the percentage change in room revenues for 2009 over 2008 and for 2010 over 2009 separately

Answer 1

Budgeted room revenue for Solent Hotel in 2010:

	(i)	(ii)	(i) x (ii)
Years	# of Rooms Sold	Average Daily Rate (ADR) ($)	Room Revenue ($)
2007	2,100	45.00	94,500
2008	2,130	47.00	100,110
2009	2,160	49.00	105,840
2010	2,190	51.00	111,690

Explanation:

# of Room sold is increased by 30 every year

Average Daily Rate is also increased by $2.00 every year

Hence budgeted # of rooms sold in 2010 are 2,190 and Average Daily Rate is $51.00

Percentage change in room revenues for 2009 over 2008:

Percentage change = [(Revenues of 2009-Revenues of 2008)/ Revenues of 2008] x 100

=[(105,840-100,100)/100,110] x 100

=[5,730/100,110] x 100

=5.41383219954649% (or)

5.41% (rounded to two decimals)

Percentage change in room revenues for 2010 over 2009:

Percentage change = [(Revenues of 2009-Revenues of 2008)/ Revenues of 2008] x 100

= [(111,690-105,840]/105,840] x 100

=[5,850/105,840] x 100

=5.52721088435374% or

5.53% (rounded)