2) (30pt)Marriot Inn expansion plans include the opening of a new hotel during f

Question

2) (30pt)Marriot Inn expansion plans include the opening of a new hotel during fall 2017 in the central business district of one of the top 4 tourist destinations in the U.S. The factor in consideration for the selection is the percentage rate of vacancies in each destination and how this relates to the average rental rate. The regression equation and the scatter diagram show the relationship of the variables follow 35 30 rate(S) 25 20 yhat 39.36 0.79X Average Average Market Vacancy oun 23 Tampa 20 17 20 26 25 10 NewYork Vacancy Rate (%) a. (5pt)What does the scatter diagram tell us about the relationship between vacancy rates and rental rates? b. (5pt)Provide an interpretation for the slope. c. (5pt)Provide interpretation for the intercept. d. (5pt)The R-squared for the model is 41%. Interpret this fit.

Explanation / Answer

a. As we can see that the scatter diagram shows the decreasing trend which means for every increasing value of x y decreases which means there is negative correlation between Vacancy rate and average rental.

b. Here slope is -0.79 which is consistent change between x and y, which means for every single increase in x there would be -0.79 decrease in y value.

c. The intercept 39.36 is the expected mean value of Y when all X=0. Start with a regression equation with one predictor, X. If X sometimes = 0, the intercept is simply the expected mean value of Y at that value.

d. Coefficient of determination, R^2, is a measure of how much of the variability in one variable can be "explained by" variation in the other. Hence 41% of the variability in y can be explained by x.

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