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ACCT2011 Financial Accounting Assignment

Added on - 18 Sep 2019

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ACCT 2011 – WINTER 2017Group Case # 1 –Sheraton Hotel“I will give you my decision in about a week,” said Jean Lafleur, managingdirector of the Sheraton Hotel in Montreal, as he put down the phone and lookedpensively at the letter before him. The letter was from the airline Alitalia requesting aone-year contract for 40 rooms at $42 per night. In addition, the hotel would have toprovide a crew allowance of $25,000 per day. Bills are to be paid within seven daysof receipt of statement on a weekly basis. The problem facing Lafleur was a simpleone: does he take Alitalia and fill the 40 rooms at $42 or does he refuse the businessand hope that he can sell the rooms at the full rate of $105 per night. Last year hehad 115 rooms sold out.BackgroundThe Sheraton Hotel was located in the downtown area of Montreal. It wasviewed as a corporate/convention hotel. In 1987 the hotel was named winner of theCanadian Automobile Association “Four Diamond Award” and the “Four Star Award”from the Mobil Travel Guide. The hotel had 824 rooms including the SheratonTowers – a prestigious hotel within a hotel. The Towers had its own check-infacilities, lounge, and special amenities. It contained 131 rooms, including 16 suites.The balance of the hotel offered a choice of king, queen, and double beds with anadditional 24 suites and six rooms specially equipped for people with disabilities. Allrooms were equipped with a pay-TV system.The Hotel opened three restaurants. Le Point de Vue on the 37thfloor offeredGourmet French cuisine and an exceptional wine list. It had a seating capacity of 84.Le Boulevard on the third floor was open for breakfast, lunch, and dinner and had aseating capacity of 259. La Musette was a European-style “express” restaurant onthe promenade level for people in a hurry. It had a seating capacity of 60. Inaddition to the restaurants, the hotel had five lounges and 14 function rooms,including a ballroom that would accommodate 1,100 people for banquets and 2,600people for receptions. Other features of the hotel included a five-story glass-in-atrium, a glass-enclosed year-round pool and a health club with gymnasium, sauna,whirlpool, and masseuse. There was indoor parking for 500 cars and boutiques andspecialty shops on the promenade level. Other services included multilingual staffand audio-visual services. All meeting rooms had cable-TV, audio-visual facilities,and telephone jacks.1
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