Mr. Tanner, the manager of the Spruce Resort, has requested your assistance in f
ID: 2522345 • Letter: M
Question
Mr. Tanner, the manager of the Spruce Resort, has requested your assistance in forecasting the lodging and food service operations sales for April. The resort has single and double guestrooms.
Number of guestrooms = 100
Number of dining room sales = 80
Estimated paid occupancy percentage = 80%
Double occupancy percentage = 60%
Average daily rate = $120
Average double room rate = single room rate + $20
Average occupancy per room
Single = 1
Double = 2.2
Breakfast sales capture ratios:
Single room occupants = 40%
Double room occupant = 80%
Lunch sales seat turnover = 1.3 times
Dinner sales seat turnover = .8 times
Average service check for breakfast = $8.95
Average service check for lunch = $12.50
Average service check for breakfast = $16.95
What is the average single room rate?
Forecast the room sales for April.
Forecast the food service sales for April for each meal period.
Explanation / Answer
a. Let the average single room rate be x.
Then the average double room rate would be x + 20.
Weighted average daily rate = $120 (Given)
120 = x * 40% + (x + 20) * 60%
x = $108
Therefore, the average single room rate is $108.
b. Expected single occupancy = 100 rooms x 80% x 40%
= 32 single guestrooms
Expected double occupancy = 100 rooms x 80% x 60%
= 48 double guestrooms
Expected sales of April = (32 x 108 + 48 x 128) x 30 days
= $288,000
c. It has been assumed that there is a typo in the question and that "number of dining room sales" must be read as "number of dining room seats".
Expected average number of occupants in single guestrooms = 32 x 1 = 32 occupants
Expected average number of occupants in double guestrooms = 48 x 2.2 = 105.6 occupants
Expected breakfast sales = (32 occupants x 40% x $8.95 + 105.6 occupants x 80% x $8.95) x 30 days
= $26,119.68
Lunch sales seat turnover ratio = total lunch sales (in number of seats) / total number of seats
1.3 = total lunch sales / 80
Total lunch sales (Daily Average) = 104 sales
Total expected lunch sales of April = 104 x $12.50 x 30 days
= $39,000
Similarly,
Dinner sales (Daily average) = 80 seats x 0.8
= 64 dinner sales
Total expected dinner sales of April = 64 x $16.95 x 30 days
= $32,544
Therefore, the expected food service sales for April for each meal are as follows:
Breakfast: $26,119.68
Lunch: $39,000
Dinner: $32,544
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