The luxury Swiss Chalet hotel general manager (GM) reported to her owner that the hotel's Occupancy Index for the calendar year 2019 was 1.25. Based upon only this information alone, what MUST be correct?

Here's the options:

a. the Swiss Chalet had higher occupancy than its competitive set in 2019

b. the Swiss Chalet had lower occupancy than its competitive set in 2019

c. the Swiss Chalet had identical occupancy to its competitive set in 2019

d. the Swiss Chalet had 2.5% higher occupancy than ALL of its competitors combined

a

Explanation:

Note that hotels employ a method that allows them measure the percentage of available rooms they sold during a specified period of time.

First, Occupancy is calculated by using the formula

= Rooms Sold / Rooms Available.

Second, the Occupancy Index is calculated by the Formula

Occupancy/ competitive set Occupancy * 100.

By standard practice, if the the hotel's Occupancy Index is 1.25 it means it has a higher occupancy than its competitive set.

answer; capital structure decision;