Compute management fee both as percentage of total revenue

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Reference no: EM132102098

1. What is the total franchise fee 1) on a per available room basis and 2) as a percentage of rooms revenue for a 300-room hotel that recorded an occupancy percentage of 75% with a $95.00 average room rate? The franchise fee for the hotel was based on the following fee structure. The initial fee is based on a minimum fee of $25,000 plus $150 per room in excess of 100 rooms. The hotel is required to pay a 3% of rooms revenue royalty fee, a 2% of rooms revenue reservation fee, a marketing fee of $0.50 per available room per day, and a $3.00 per occupied room frequent traveler fee (frequent travelers represent 15% of total rooms occupied).

2. A 220-room independent hotel recorded an occupancy percentage of 66.2% and an average room rate of $133.75. The hotel’s rooms revenue ratio to total revenue was 56.5%, and GOP was 32.4%. What is the management fee for the hotel based on a structure that required the owner to pay the managing company 1.6% of gross revenue and 8% of GOP? Compute the management fee both 1) as a percentage of total revenue and 2) on a per occupied room basis.

Reference no: EM132102098

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