In 2017 the Pacifica Hotel obtained an occupancy percentage of 78% and an ADR of $159.00. In 2018, management lowered the nightly rates to attract more business to the property and achieved an occupancy percentage of 81% and an ADR of $154.00. Describe the effect of using this strategy using the key ratios. Should management lower the rates again in 2019? Why?

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.