Tysen McCarthy wants to develop a plot of real estate he owns in Middlens He is

Question

Tysen McCarthy wants to develop a plot of real estate he owns in Middlens He is interested in knowing the current average occupancy of com hotels in Middleville. evill petitive Research reveals the following: Competitive Properties Sunset Inn Valley Motel Hilltop Lodge Highrise Hotel Daily Average Number of Rooms Sold Number of Rooms 100 80 120 300 63 60 80 210 The lodging facility that McCarthy wants to construct would have 200 rooms Required: 1. What is the average daily occupancy for Middleville?

Explanation / Answer

1. Average daily occupancy can be calculated by dividing the total of daily average rooms sold by the total number of rooms available, which in this case would be:
=(63+60+80+210)/(100+80+120+300)
=413/600
=68.83%

2. Assuming that the lodging facilities offered by McCarthy are not differentiated from its competitors and considering a still-unsaturated market, the total number of rooms sold is likely to remain the same despite the entry of McCarthy. A fair share could be calculated as the average of the number of rooms offered by McCarthy in comparison to the entire area of Middleville. It would be calculated as:
=200/800
=25%

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