Final answer:
The statement regarding complimentary rooms is true and represents common practice in the hospitality industry. The location quotient provides insight into the concentration of hotels within an area, which can impact business negotiations. Additionally, testing for price differences in hotel rooms across cities would involve statistical analysis at a designated significance level.
Step-by-step explanation:
The statement that 'One complimentary room per 50 room nights sold is a widely quoted industry measure used when negotiating convention and group business' is true. This hospitality industry guideline is known as the 'comp policy,' which hoteliers often use to attract large groups or convention business. Essentially, for every 50 rooms booked by a group, one room is provided at no charge as a courtesy. Thus, hotels use this as an incentive to secure group bookings.
Understanding the location quotient can further assist in providing context for such business negotiations. For instance, if a town has a higher concentration of hotels compared to the state average, indicated by a location quotient greater than 1, this might signal a robust or overly saturated hotel market. Such insights can influence business strategies when negotiating group rates and complimentary room policies.
Finally, when testing hotel prices across multiple cities, as alluded to with the mention of Table 10.33, a statistical analysis such as an ANOVA (Analysis of Variance) would be performed. Testing at a 1 percent significance level is stringent and would ensure only highly significant results would lead to a conclusion that there are differences in hotel pricing among the cities.