Room Division Case Study

By Support

Room Division Case Study – 1250 words

You are the Rooms Division Manager at EHA hotel. See the Appendix

Answer the following five (5) questions based on the information given in the Appendix

Question 1

As RDM @ EHA you arrived at work this morning to the following figures from last night:

  • Rooms sold: 141
  • Total Rooms Revenue: $31,866
  • Total Revenue: $48,789
  • OOO: 5

Calculate the following for your morning meeting:

  • Occupancy %
  • ADR
  • RevPAR
  • RevPOR

From the STR reports the hotel has ranked:

  • 1st in Occupancy
  • 4th in ADR
  • 2nd in RevPAR

The average for the competitive set last night was:

  • 92.5% Occupancy
  • $232 ADR
  • $208.50 RevPAR

Provide a detailed summary of how you feel the hotel is performing and any recommendations you may have.

You are required to present the information in a professional format that could be utilised in a hotel’s Management Meeting.

 Question 2

By now, EHA expected to be fully booked for next weekend, but they have only sold 80 rooms (all 50 standard rooms, 20 deluxe, 8 Apartments and 2 Junior Suites). It’s the annual city festival that historically fills the hotel at their full Rack Rate.

EHA has 150 bedrooms; their Rack Rate for their standard room is $350 per room per night. The cost of preparing a room for sale is $75.

As Rooms Division Manager you are analysing two strategies that have been presented to you by your team to try and boost sales for next weekend. So far, you have only sold 80 rooms an ADR of $315 per room per night.

Strategy 1: To take a last-minute group of 70 filling the hotel on a room rate of $215 per room.

The group will be double occupancy per room, some may potentially have breakfast on an ad hoc basis and all guests will be at the festival throughout the day and evening. They are visiting from South America and could potentially make this an annual trip but nothing, at this stage, is guaranteed.

Strategy 2: To open BAR rate of $295 (for a Standard Room) per night and forecast selling an extra 45 rooms at this rate.

Calculate the following for each strategy:

Please ensure you show your workings and present the information professionally.

  • Room Revenue
  • ADR
  • RevPAR
  • Critically evaluate the results of the two (2) strategies.
  • Discuss, in detail, which you would recommend using and why.
  • In your answer, explain what factors, other than rooms revenue, should be considered when making your decision

Question 3

(Approximately 300 words)

The next financial year is fast approaching and the GM has asked you to prepare your Rooms Revenue Forecast.

Explain, in detail, the process you would take to forecast your room sales and revenue. Include an explanation of any considerations you must take on board. Also describe the importance of forecasting for a hotel.

Question 4

The Financial Controller has asked you for a meeting, the commissions being paid to OTAs are increasing by the week and are well ahead of the budgeted amount. She asked you to justify the reason for utilising OTAs

In approximately 300 words, prepare a document highlighting the advantages and disadvantages    of OTAs – discuss, moving forward, how you believe EHA should react to the increasing commissions.

Question 5

A new Executive Housekeeping Manager is starting today, as part of their orientation explain in approximately 300 words the importance of EHA’s Housekeeping Department. Detail how you feel   the Housekeeping Inventories should be managed and why, giving examples. In your answer   discuss whether you believe outsourcing is an option for EHA.

Required: Title page, Table of contents, Body, References list (Introduction and conclusion is not required).

Minimum of 5 references, credible references for this assignment include journals, textbooks, government reports, industry association documents, hotel specific websites or brochures.

Breakdown of Existing EHA Services and Products


  1. Accommodation

150 Rooms, breakdown as follows:

  • 5 Accessible rooms
  •  25 Standard King rooms
  • 25 Standard King room with view
  •  25 Deluxe King rooms
  • 25 Deluxe King rooms with view
  • 30 1 Bed apartments (can interconnect with standard rooms)
  • 11 Junior Suites
  • 3 Deluxe Suites
  • 1 Penthouse

EHA is predicting an average occupancy of 90% for the first year and hopes to be the lead hotel in the CBD in terms of ADR

  1. Food and Beverage Outlets

Fine Fusion

  • Fine dining restaurant
  •  seating capacity of 90
  •  exclusive open kitchen concept
  • reservation highly recommended due to popularity
  • The Garden

Family restaurant

  • Seating capacity of 150
  •  Semi casual dining atmosphere
  • Buffet and a-la-carte
  • Reservation needed for weekends

Function Rooms (all located on the first floor)

  •  B ballroom – seating capacity of 250
  •  MV ballroom – Seating capacity of 200
  •  Both the ballrooms are separated by partition. If combined, the ballroom can accommodate 420 guests
  1. Other Facilities
  • Swimming Pool

o located at roof top a small bar is available during peak times

  • Gymnasium/Health Club

o Well-equipped gym o Sauna and spa

o Group exercise classes including yoga and Pilates as well as personalised one-onone training sessions

o The gym area has a Juice bar and Healthy Living cafe with seating for 50 guests

o The gym is open to non-residents on a membership basis and is located on the top floor with access to the roof top pool

  • Technology

o Inefficient and outdated software and hardware

  • Car Park

o located at hotel basement

o able to accommodate hotel and restaurants guests, and clients attending hotel functions

o overnight parking is at A$40, valet parking available upon request at additional cost