The principal question of the case study is whether Skyview Manor should stay open during the off-season or not. Currently, Skyview Manor is operating during the skiing season which opens a total of 120 hotel operating days but if they remain open the hotel will operate 365 days a year.
The manager of the hotel, Mr. Kacheck, is worried about off-season losses. Mr. Kacheck proposed following ideas in order to increase the occupancy and decrease the losses. * Stay open in the off-season and advertise * Stay open in the off-season, advertise, and add a heated/covered pool * Stay open in the off-season and add a heated/covered pool (no advertising) * Stay open in the off-season, advertise and add a seasonal pool
To begin…show more content… Variable expenses are calculated on a per unit basis due to weekday room rentals maintaining same occupancy rates of approximately 80% and weekend room rentals decreasing to approx 90%. Fixed expenses remain the same from question #1 ($118,913.00). A contribution margin income statement follows: Skyview Manor
Contribution Margin Income Statement
