Question: How much would the Hilton have to charge on average per room to break-even?

-Startup costs are $500M

-Hotel costs $20M to operate

-Assuming a 10 year horizon.

Any thoughts would be much appreciated.

Printable View

- January 15th 2013, 05:59 PMphi1234Break-even point (price)
Question: How much would the Hilton have to charge on average per room to break-even?

-Startup costs are $500M

-Hotel costs $20M to operate

-Assuming a 10 year horizon.

Any thoughts would be much appreciated. - January 15th 2013, 07:55 PMrichard1234Re: Break-even point (price)
Question is too vague. $20 million per year? Month? What is the current demand for hotel rooms?

- January 21st 2013, 12:48 PMphi1234Re: Break-even point (price)
Hotel costs are $20M/yr to operate and there are 400 rooms in the hotel.

- January 21st 2013, 05:35 PMabysmalgnatRe: Break-even point (price)
Let's assume each room is charged at $P per year, then,

4000P=500+10(20)

So 4000P=700

P=$175,000 per room per year to break even, assuming full occupancy. - January 23rd 2013, 11:41 PMcobemuathuRe: Break-even point (price)
Where is 4000p?

- January 25th 2013, 04:52 AMabysmalgnatRe: Break-even point (price)
400 rooms a year over 10 years.