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30 3. Fadwa Al-Majeed is the general manager at the 125-room select service Harley House Inn. She also serves as the property's revenue manager. The property primarily serves business travelers and is quite busy Monday through Thursday nights. The property is less busy on the weekends. Fadwa has just taken a call from Lawrence, a friend and the revenue manager at a hotel within her comp set. Because of an internal oversight, Lawrence's hotel is overbooked by 70 group rooms next Saturday. Lawrence would like to purchase that mumber of rooms from Fadwa at their previously agreed upon walk rate of $75.00 per night. Fadwa's normal ADR is $129.00 and her cost of cleaning a room is $17.00. Currently, Fadwa has 55 occupied rooms (arrivals and stayovers) on the books for that day. She forecast that she could sell, at her normal ADR, another 30 rooms by Saturday. Falwa typically generates $8.00 in ancillary revenue from each of her occupied rooms. Before replying to Lawrence's request, she summarized her forecasted rooms sales related information in a chart so she could better understand the impact of accepting or rejecting Lawrences walked guests. Help Fadwa assess the potential impact on her hotel of agreeing to Lawrence's request and then answer the ques tions that follow Harley House Hotel: Saturday Forecast Total rooms available for sale 125 Current rooms sold forecast 55 Additional rooms to be sold forecast Walk rooms requested 70 Normal ADR $129.00 Walk rooms ADR $75.00 Ancillary revenue per room $8.00 Room cleaning cost $17.00 Fadwa's Source of Business Calculation Next Saturday Night With Lawrence Walks Without Lawrence Walks Rooms Sold ADR $129.00 Total Rooms Revenue Estimate Daily per Room Ancillary Revenue $8.00 $8.00 Total Rooms plus Ancillary Revenue RevPOR Rooms Dept. Cost POR Net Total Revenue a. What would be Fadwa's ADR if she accepted all of Lawrence's walked rooms b. What would be Fadwa's RevPOR with the walked rooms c. What would be Fadwa's Rex POR without the walked rooms d. What would be the net total revenue (RexPOR - Rooms dept. cost POR) difference in her hotel's revenue if Fadwa agree to take the rooms e. What would be the percentage of difference in her hotel's net total revenues if Fadwa agree to take the rooms? f. If you were Fadwa, would you accept the walked rooms from Lawrence's hotel: Why or why not

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