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.
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Question is too vague. $20 million per year? Month? What is the current demand for hotel rooms?
Hotel costs are $20M/yr to operate and there are 400 rooms in the hotel.
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.
Last edited by abysmalgnat; Jan 21st 2013 at 06:50 PM.
Where is 4000p?
400 rooms a year over 10 years.
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