An offer from Alitalia has been given to the general director of Le Centre Sheraton Hotel for a one year contract to supply 40 hotel rooms at $42 a night. The contract will offer the Alitalia crew an allowance and lower food and beverage costs. Last year they sold out 115 hotel rooms at $105 a night. Georges Villedary has to decide whether or not to sign the contract.
Identification of Issues
Georges Villedary has to decide whether or not to sign the contract with Alitalia. Not only does he has to take into consideration all the additional costs but he has to consider if the offer from Alitalia will give him the return on investment he needs.
Quantitative Analysis
The incremental revenue to take the offer from Alitalia is $105,930
This takes into consideration the cost of the rooms and food and beverage revenue the airline crew will supply to the hotel which is $757,156
The hotel would …show more content…
This option will give him more business in the future not only from the airline but from other customers as well. This option also helps them make their ROI needs and will help them with their cash flow issues. The hotel will still have rooms left over to sell at the regular rate and I believe will be able to offer Alitalia the level of service they
Identification of Issues
Georges Villedary has to decide whether or not to sign the contract with Alitalia. Not only does he has to take into consideration all the additional costs but he has to consider if the offer from Alitalia will give him the return on investment he needs.
Quantitative Analysis
The incremental revenue to take the offer from Alitalia is $105,930
This takes into consideration the cost of the rooms and food and beverage revenue the airline crew will supply to the hotel which is $757,156
The hotel would …show more content…
This option will give him more business in the future not only from the airline but from other customers as well. This option also helps them make their ROI needs and will help them with their cash flow issues. The hotel will still have rooms left over to sell at the regular rate and I believe will be able to offer Alitalia the level of service they