Hubbart Formula is a bottom-up approach to pricing rooms introduced by Roy Hubbart in This approach considers operating costs, desired profits, and. The Hubbart Formula is a formula that can be used in hotel management. It is used to determine the proper average rate to set for rooms in a. Case 1a Question: Hubbart Formula (Hotel Construction): Case 1a: Luxus Hotels Ltd has constructed a bedroom hotel at a cost of $ 7,, The hotel is.

Author: Dinris Akik
Country: Guinea
Language: English (Spanish)
Genre: Health and Food
Published (Last): 12 June 2010
Pages: 355
PDF File Size: 1.63 Mb
ePub File Size: 14.77 Mb
ISBN: 564-6-16685-408-3
Downloads: 82364
Price: Free* [*Free Regsitration Required]
Uploader: Dijind

Food and Beverage department income — Rentals and other department income — Plus: This method sets the rate of a room at Rs. LWH Hotels Ltd are considering building a room hotel at a city centre location.

Calculate the average room rate by dividing rooms department revenue by the expected number of rooms to be sold. Helped me very well.

Room Rate | Establishing room rate » BNG Hotel Management Kolkata

Net Income1, x. The second item — income taxes — is the second item from the bottom of the income statement, and so on. Estimated depreciation, property taxes, and insurance Income before fixed charges Plus: She desires to know the average room rate her hotel will have to charge, given the following alternatives.


Consider a year to have days. A blind call does not identify the hotel making the call and simply asks for availability and rates on specific dates. The hotel is financed with a loan of Rs. Jeremy Harris, the owner is concerned about the ADR, construction costs, borrowing costs, and their impact on future profits.

Enter the email address you signed up with and we’ll email you a reset link. Number of hotel rooms: The action or business of promoting and selling products or services, including market research. This approach considers operating costs, desired profits, and expected number of rooms sold to determine the average rate per room.

Corporate or commercial rate: Estimate non-room operated department income or loss, that is, food and beverage department income or loss, telecommunications department income or loss and so on. It is considered a bottom-up approach because its initial item — fogmula income profit — appears at the bottom of the income statement.

Download ppt “Establishing Room Rates”. To make this website work, we log user data and share it with processors. Generally building during booming times and putting old hotels out of business. Some special room rate hubbbart are: Undistributed operating expenseRequired operated departments incomeLess: Feedback Privacy Policy Feedback.

Establishing Room Rates

The hotel will be closed during the month of January calculate 30 days and expects hubbarh average WWW. Click here to sign up. The most commonly used figure is ADR. This rate is implemented to help build occupancy. Schedule II incorporates opportunity cost.


The required rooms department income Hubnart 6plus rooms department direct expenses of payroll and related expenses, plus other direct operating expenses equals the required rooms department revenue. The guest is not charged for the room during the stay but will have to pay for dining, telephone calls etc.

Calculate undistributed operating expenses. The proposed Harris Place a 50 room, room only lodging facility is to be built in mid-Michigan. Share buttons are a little bit lower.

Establishing Room Rates – ppt video online download

Undistributed operating expense Required operated departments income 1, Less: Topic 4 Financing Strategies.

What are some of the drawbacks of using a strict square footage calculation? She desires to know the average room rate her hotel will have to charge, given the following alternatives.

To use this website, you must agree to our Privacy Policyincluding cookie policy. For example, if the average construction cost of a hotel room is Rs.