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Business, 05.05.2020 07:32 jameslinimk

The hotel manager receives an offer to hold the local Bikers’ Club annual meeting at the hotel in March, which is the hotel’s low season with an occupancy rate of under 55%. The Bikers’ Club would reserve 40 suites for three nights if the hotel could offer a 55% discount, or a rate of $90 per night. The hotel manager is inclined to reject the offer because the cost per suite per night is $125. Prepare an analysis of this offer for the hotel manager. Should the offer from the Bikers’ Club should be accepted or rejected? What is the contribution margin from accepting the offer?

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