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Should a hotel in Bangkok raise its prices?
You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.
Case timer
00:00
1. Read the prompt aloud
Read it slowly, then pause. Let the candidate ask questions before they structure.
An illustrative 300-room hotel in Bangkok runs at 75 percent occupancy with an ADR of THB 4,000. Each occupied room night costs THB 600 in cleaning, laundry, amenities, and energy. Management thinks a 10 percent price increase would lower occupancy to 70 percent. What are RevPAR and yearly rooms revenue today, and does the price increase raise profit?
2. Answers to clarifying questions
This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.
3. A model structure
Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.
- Compare contribution per available room before and after
- RevPAR = occupancy x ADR
- Contribution per available room = occupancy x (ADR minus variable cost per occupied room)
4. The working, step by step
Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.
Step 1: RevPAR today
What a strong candidate does: 75 percent of THB 4,000.
RevPAR today (THB): 0.75 × 4,000 = 3,000
Step 2: Yearly rooms revenue
What a strong candidate does: 300 rooms x 365 nights x THB 3,000, in THB millions.
Rooms revenue (THB millions): 300 × 365 × 3,000 ÷ 1,000,000 = 329
Step 3: RevPAR after the increase
What a strong candidate does: ADR of THB 4,400 at 70 percent.
RevPAR after (THB): 0.7 × 4,400 = 3,080
Step 4: Contribution per available room today
What a strong candidate does: Occupancy x (ADR minus 600).
Contribution per available room today (THB): 0.75 × (4,000 - 600) = 2,550
Step 5: Contribution per available room after
What a strong candidate does: Fewer rooms to clean, higher price.
Contribution per available room after (THB): 0.7 × (4,400 - 600) = 2,660
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
Yes, the hotel should raise prices by 10 percent if the occupancy estimate holds, because contribution per available room rises from THB 2,550 to THB 2,660. First, RevPAR rises from THB 3,000 to THB 3,080 even with occupancy falling to 70 percent. Second, fewer occupied rooms also save THB 600 of cleaning and energy per night. The risk is that the lost guests are loyal corporate clients who also spend in the restaurant and spa. As a next step, test the new rate in quieter periods and compare it with competitors' prices.
Score the candidate
Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.
This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?
Total
0 out of 25
Score all five criteria to see the band and the feedback template.