Question

Last month, Ginger's hotel ran an occupancy rate of 85%. Her competitive set had 150,000 room nights included within it that were available for sale during that month. During that month, the competitive set sold a total of 115,000 rooms. What was the approximate occupancy rate INDEX last month for Ginger's hotel?

Answer 1

Occupancy Index=111

Explanation:

Occupancy Index is defined ad the measure of a hotel's occupancy rate divided by the occupancy rate of the competitive hotel multiplied by 100:

`INDEX=(Property \ OCC)/(Competitive \ OCC)* 100`

-The occupancy rate of the competitive set is calculated as:

`Competitive \ Occupancy\ Rate=(Rooms \ Sold)/(Rooms \ Available)\\\\=(115000)/(150000)\\\\=0.7667\\\\=76.67\%`

The occupancy index is then calculated as follows:

`INDEX=(Porperty \ OCC)/(Competitive \ OCC)* 100\\\\\=(0.85)/(0.7667)* 100\\\\=110.8647\approx 111`

Hence, the occupancy index is approximately 111