(4) How much would the 2 Bedroom Suite Off-Peak per day rate need to be to have
ID: 2608708 • Letter: #
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(4) How much would the 2 Bedroom Suite Off-Peak per day rate need to be to have the same off-peak maximum revenue as the 1 Bedroom Suite?
Beachfront Guest House Effective May 1, 2016 Peak Rentals Off-Peak Rentals Rental Type No. Units Per Day Maximum Revenue Per Day Maximum Revenue Discount Rate Studio Apartment 6 $ 149.95 $ 899.70 $ 112.50 $ 675.00 25.0% 1 Bedroom Suite 4 $ 250.45 $ 1,001.80 $ 174.00 $ 696.00 30.5% 2 Bedroom Suite 2 $ 450.00 $ 900.00 $ 247.55 $ 495.10 45.0% Questions & Answers Assume all 12 units are rented as you answer the following questions: (1) Which rental type generates the most maximum revenue for peak rental periods? One bedroom suites generate the most revenue for peak rental periods. (2) Which rental type generates the most maximum revenue for off-peak rental periods? One bedroom suites generate the most revenue for off-peak rental periods (3) Why is there a difference? There is not a difference in this instance. However, in the off peak season the studio apartments generate the second highest amount of revenue vs the 2 bedroom suites during the peak season. This is due to the 2 bedroom suites having a higher discount rate during the off peak season. (4) How much would the 2 Bedroom Suite Off-Peak per day rate need to be to have the same off-peak maximum revenue as the 1 Bedroom Suite?Explanation / Answer
4.
One bedroom off peak maximum revenue=$696
No. Of units in 2 bedroom suite =2
2 Bedroom Suite Off-Peak per day rate=$696/2
=$348 per day
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