Forecasting with Indices

Forecasting with Indices

QRB/501

In 2005 Proccanti Group landed the management contract for the Holiday Inn Downtown Decatur. This hotel is located in the heart of Decatur, GA in walking distance to a variety of local eateries and city government offices. The hotel has 184 hotel rooms and 15,000 square feet of meeting space. The hotel is trying to determine what their forecasted occupancy and revenue will be for December 2010 so that they can budget accordingly. The management company understands that the economy has created a significant increase in revenue but they will to determine approximately where their occupancy and revenue will be for December 2010.

Monthly Hotel Sales for the Months of December |

ATLDC | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |

Occupancy | 83.5% | 85.9% | 86.8% | 74.3% | 72.2% | ??? |

Revenue | $308,031.50 | $322,210.90 | $333,659.20 | $248,756.40 | $226,058.20 | ??? |

Currently the Proccanti Group is concerned about the month of December’s revenue. They have sent emails to the General Manager and the Director of Sales expressing their concerns for the revenue growth for the hotel.

Monthly Hotel Sales for the Months of December |

ATLDC | 2005 | 2006 | 2007 | 2008 | 2009 | *2010 |

Occupancy | 83.5% | 85.9% | 86.8% | 74.3% | 72.2% | 74.40% |

Revenue | $308,031.50 | $322,210.90 | $333,659.20 | $248,756.40 | $226,058.20 | $237,361.11 |

| *indicates current budgeted monthly sales | |

They have asked the Director of Sales to implement a rate strategy that will show potential growth for December 2009. They have requested at least a 10% increase in revenue and a 6% increase in occupancy.

Monthly Hotel Sales for the Months of December |

ATLDC | 2005 | 2006 | 2007 | 2008 | 2009 | *2010 |

Occupancy | 83.5% | 85.9% | 86.8% | 74.3% | 72.2% | 76.50% |

Revenue | $308,031.50 | $322,210.90 | $333,659.20 | $248,756.40 | $226,058.20 | $248,664.02 |

| *indicates the expected increase from management company...