EOC Week 8: Chapter 8 Question 4

a. What were the total revenues in October 2009 and October 2010? The total revenues in October 2009 were 545,000 and 583,000 in October 2010. "Because revenue is a product of both price and number sold, yield in the hotel industry is a product of ADR and occupancy." (288)

b. What was the GOP in dollars in October 2009 and October 2010? The GOP in October 2009 was 162,000 and October 2010 was 184,550. "Gross operating profit (GOP) is, in effect, total hotel revenue less those expenses that are considered directly controllable by management." (296) 

c. What was the percentage of GOP to total revenues in October 2009 and October 2010? The percentage of GOP to total revenues in October 2009 was 29.72% and October 2010 was 31.66%

d. What was the flow-through percentage achieved by Santi’s hotel? What is your assessment of that percentage? The flow-through percentage achieved by Santi's hotel was 59.34%. This is a great percentage and it proves that the business is running efficiently. "When flow-through is high (over 50%), it reflects efficiency on the part of management in converting additional revenues into additional profits." (43)