Question

(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?

Answer 1