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MCKINSEY-STYLE PRACTICE
CASE #2
SOLAMERE HOTELS
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2016
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2
of
19
Our
client
is
Solamere
Hotels,
a
European-‐based
luxury
hotel
chain.
Solamere
has
23
properties,
with
the
majority
in
Europe’s
capital
cities.
Solamere’s
hotels
are
grouped
into
three
regions:
Northern,
Central,
and
Southern.
The
hotels
are
known
for
providing
guests
with
an
expensive
and
luxurious
experience.
Solamere
calculates
what
is
called
an
occupancy
rate
by
measuring
the
average
number
of
guests
that
are
staying
in
rooms
in
Solamere
properties,
and
dividing
by
the
total
number
of
rooms
available.
Over
the
past
two
years,
Solamere’s
occupancy
rates
across
its
properties
have
been
declining.
The
client
has
conducted
market
research
of
other
luxury
hotels,
and
competitors
seem
to
have
consistent
or
growing
occupancy
rates
over
the
same
period.
Solamere
hired
your
team
to
understand
why
their
occupancy
rates
are
dropping,
and
what
they
can
do
about
it.
What
are
the
factors
you
would
want
your
team
to
look
at
when
approaching
this
problem?
[Note
–
at
this
point,
you
should
take
a
break
approximately
1-‐minute
long
to
write
down
your
answer
to
this
question,
then
spend
between
2-‐3
minutes
giving
your
answer
to
your
interviewer
when
you
are
ready.]
2. Quantitative question
Our
client
wants
to
understand
the
financial
impact
of
the
drop
in
occupancy
rates
over
the
past
two
years.
Both
the
change
in
occupancy
and
the
price
of
the
hotels
varies
across
the
regions.
Region
Average
number
of
Revenue
per
Variable
costs
Average
number
of
occupied
rooms
2
occupied
room
per
room
occupied
rooms
today
years
ago
Northern
810
€249
€99
730
Central
1230
€296
€101
990
Southern
1020
€351
€100
1000
Based
on
this
information,
what
impact
has
the
drop
in
occupancy
had
on
Solamere’s
daily
profitability,
in
terms
of
fewer
Euros
per
day?
[Note
–
at
this
point,
you
should
take
a
break
approximately
1-‐minute
long
to
write
down
your
answer
to
this
question,
then
spend
between
2-‐3
minutes
giving
your
answer
to
your
interviewer
when
you
are
ready.]
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2016
Victor
Cheng
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Page
3
of
19
3.
Quantitative
question
Solamere
believes
that
the
Southern
Region
has
been
a
strong
spot,
having
reduced
its
occupancy
by
only
20
rooms
over
the
past
two
years.
Solamere
is
confident
that
with
the
right
strategies,
the
hotel
chain
can
increase
the
occupancy
rate
of
the
Southern
region
to
offset
the
losses
in
Northern
and
Central.
How
much
would
the
occupancy
rate
in
the
Southern
region
have
to
increase,
from
its
baseline
of
1000
rooms
filled
today,
to
offset
the
losses
from
the
drop
in
occupancy
from
the
Northern
and
Central
regions?
[Note
–
at
this
point,
you
should
take
a
break
approximately
1-‐minute
long
to
write
down
your
answer
to
this
question,
then
spend
between
1-‐2
minutes
giving
your
answer
to
your
interviewer
when
you
are
ready.
For
quantitative
questions,
tell
your
interviewer
your
math
answer,
how
you
arrived
at
it,
and
what
the
implications
of
that
answer
are
to
the
ultimate
problem
that
you
are
solving
in
the
case.]
4. Creativity question
In
addition
to
hundreds
of
boutique
hotels
and
smaller
chains,
your
client
has
two
major
competitors
with
luxury
hotels
in
similar
locations
across
Europe:
Tagg
Hotels
and
Willard
Holdings.
Your
team
took
a
market
survey
of
customers
who
stay
in
European
luxury
hotels
to
get
a
sense
for
how
Solamere
Hotels
is
perceived,
compared
to
its
competitors.
Your
team
found
the
following
results:
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2016
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[Note
–
this
is
an
open-‐ended
creativity
question.
Take
about
1
minute
to
study
the
data,
and
then
take
another
30
seconds
to
1
minute
to
write
down
your
observations
from
the
data
as
they
relate
to
the
case
problem.
Remember,
the
client
is
trying
to
increase
the
number
of
guests
that
stay
in
Solamere
hotels.
What
can
you
learn
from
this
data
about
what
might
be
a
good
strategy
to
address
that
problem?]
5. Structuring question
Solamere
is
interested
in
studying
the
financial
benefits
of
a
partnership
with
a
car
rental
firm
to
offer
discounts
to
guests
staying
in
Solamere
properties.
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2016
Victor
Cheng
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Page
5
of
19
There
are
many
different
car
rental
firms
in
areas
where
Solamere
properties
are
located.
Some
of
these
firms
are
international,
while
others
are
regional
or
may
have
locations
in
only
one
European
country.
What
are
the
factors
that
Solamere
should
consider
when
deciding
which
car
rental
firm
–
or
multiple
firms
–
Solamere
should
partner
with
for
a
discount
for
its
guests?
[Note
–
at
this
point,
you
should
take
a
break
approximately
1-‐minute
long
to
write
down
your
answer
to
this
question,
then
spend
between
2-‐3
minutes
giving
your
answer
to
your
interviewer
when
you
are
ready.]
6. Creativity question
Stryker
Car
Rental,
a
reputable
European
car
rental
firm
with
locations
near
all
of
Solamere’s
hotels,
approached
our
client
with
a
proposal
for
a
partnership.
Stryker
offered
three
options
to
Solamere.
In
each
option,
Solamere
would
suggest
that
guests
rent
from
Stryker,
and
Stryker
would
recommend
its
customers
stay
in
Solamere
hotels.
Options:
A.
Any
Solamere
guest
who
rents
a
Stryker
car
would
receive
a
10%
discount
from
Stryker.
B. Any
Solamere
guest
who
rents
a
Stryker
car
would
receive
a
5%
discount
from
Stryker.
Additionally,
Solamere
Hotels
would
receive
a
payment
from
Solamere
of
5%
of
the
gross
revenues
from
all
cars
rented
by
Solamere
Hotel
guests.
C. Instead
of
providing
a
discount
to
customers,
Stryker
would
provide
free
transportation
from
local
airports
to
Solamere
hotels,
where
Stryker
representatives
would
be
waiting
with
rental
cars.
Additionally,
Stryker
representatives
would
retrieve
their
rental
cars
at
Solamere
hotels
and
provide
free
transportation
for
Solamere
guests
–
who
are
renting
cars
from
Stryker
-‐
to
the
airport.
Which
of
these
deals
do
you
think
would
be
best
for
our
client?
[Note
–
for
this
type
of
creativity
question,
there
is
no
single
right
answer.
Take
a
1-‐minute
break
to
select
one
of
the
options
and
write
down
your
justifications
for
why
that
option
would
be
the
best
for
our
client,
while
keeping
in
mind
the
ultimate
goal
of
this
case
–
attracting
more
customers
to
our
client’s
hotels.]
©
2016
Victor
Cheng
www.caseinterview.com
All
Rights
Reserved
Page
6
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19
7.
Quantitative
question
Solamere’s
properties
change
their
prices
based
on
expected
occupancy
rates.
The
more
demand,
the
higher
the
cost
per
room
for
all
rooms.
One
of
Solamere’s
hotels
in
Brussels
has
seen
a
steep
decline
in
their
occupancy
rate.
At
this
hotel,
average
occupancy
declined
from
90%
per
night
to
74%
per
night.
Today,
the
hotel
is
charging
an
average
of
275
euros
per
night
for
its
100
total
rooms
(of
which,
74%
are
occupied).
For
every
percentage
point
increase
in
expected
occupancy,
this
hotel
is
able
to
charge
two
percentage
points
additional
per
room
for
all
rooms
in
revenue.
Solamere’s
variable
costs
change
in
steps,
depending
on
occupancy
rate.
Above
74%,
Solamere
has
incremental
variable
costs
based
on
occupancy
rates.
What
would
the
net
impact
be
on
the
property’s
profits
if
the
hotel
were
to
recover
half
of
its
lost
occupancy?
[Note
–
for
this
question,
do
not
worry
about
regional
variable
costs
discussed
earlier
in
the
case.
Only
focus
on
the
variable
costs
listed
in
this
question.]
What if the hotel recovered all of the lost occupancy?
[Note
–
at
this
point,
you
should
take
a
break
approximately
1-‐minute
long
to
write
down
your
answer
to
this
question,
then
spend
between
1-‐2
minutes
giving
your
answer
to
your
interviewer
when
you
are
ready.
For
quantitative
questions,
tell
your
interviewer
your
math
answer,
how
you
arrived
at
it,
and
what
the
implications
of
that
answer
are
to
the
ultimate
problem
that
you
are
solving
in
the
case.
]
©
2016
Victor
Cheng
www.caseinterview.com
All
Rights
Reserved
Page
7
of
19
ANSWER
KEY
Candidate
scoring
criteria:
Each
answer
is
scored
by
your
interviewer
on
a
scale
from
0
to
3.
0
–
Clearly
below
the
bar:
candidate’s
answer
is
scattered,
incomplete,
or
does
not
address
the
question.
1
–
Below
the
bar:
candidate’s
answer
partially
addresses
the
question
but
is
not
structured
and
leaves
out
key
details.
2
–
Strong:
candidate’s
answer
is
structured,
comprehensive,
communicated
effectively
and
succinctly,
and
meets
the
standards
of
an
average
consultant.
3
–
Excellent:
candidate’s
answer
is
above
the
standard
of
an
average
consultant
and
is
structured,
succinct,
creative,
and
addresses
the
problem
in
a
comprehensive
manner.
To
pass
an
interview,
a
candidate
needs
a
mix
of
answers
that
score
a
2
and
answers
that
score
a
3
throughout
the
case.
There
is
no
defined
number
that
guarantees
a
pass,
but
if
a
candidate’s
average
score
per
answer
is
a
2.5,
they
will
likely
pass
the
case.
1. What
are
the
factors
you
would
want
your
team
to
look
at
when
approaching
this
problem?
This
is
a
classic
growth
problem.
Occupancy
has
been
decreasing,
and
our
client
wants
to
understand
why
and
get
the
rate
back
up.
Note
that
the
client
has
asked
your
team
to
address
its
occupancy
problem,
NOT
a
revenue
problem
–
a
related
but
distinct
inquiry.
It
is
common
in
cases
for
the
case
prompt
to
ask
you
why
the
client
is
having
a
problem,
and
what
they
can
do
to
fix
this.
In
a
real
client
situation,
a
team
would
break
this
into
two
related
questions
–
(1)
what
is
causing
the
problem,
and
(2)
what
are
the
best
strategies
to
fix
it?
That
is
a
good
approach
for
this
problem
to
show
your
interviewer
you
think
like
a
consultant.
Then, depending on what we find out, I want to look for growth strategies across the same dimensions:
Other acceptable factors would be structuring your answer to look at:
-‐Competition – what are the best practices of other luxury hotels?
-‐Industry trends – what is changing in the broader hospitality industry?
The
best
way
to
score
your
own
answer
on
a
structuring
problem
as
you
complete
this
practice
case
is:
if
you
had
90%
or
more
of
the
above
factors,
and
your
answer
was
organized
and
succinct,
you
likely
scored
a
‘3’.
Score
2
-‐
If
your
answer
had
between
66%
and
90%
of
the
factors
in
the
sample
answer
above,
your
answer
was
likely
a
‘2’
–
or
Strong.
Score
1
-‐
If
your
answer
had
between
50%
and
66%
of
the
factors
in
the
sample
answer
above,
your
answer
was
likely
a
‘1’
–
or
Below
the
bar.
Score
0
-‐
If
your
answer
had
less
than
50%
of
the
above
factors,
your
answer
was
likely
a
‘0’
–
or
Clearly
Below
the
bar.
Your
interviewer
will
also
be
grading
you
on
how
succinct
you
are
and
how
effective
you
are
as
a
communicator.
This
will
affect
your
score.
For
example,
if
you
had
100%
of
the
above
factors,
but
you
took
5
minutes
to
explain
your
answer,
and
jumped
around
between
categories,
you
would
not
get
a
‘3’
–
even
though
you
addressed
all
of
the
right
factors.
Jumping
around
between
categories,
or
repeating
factors
can
turn
a
‘3’
answer
into
a
‘0’.
Likewise,
if
you
provided
only
60%
of
the
above
answers
but
did
so
in
a
succinct,
organized
manner,
your
interviewer
may
bump
the
score
for
your
answer
up
to
a
‘2’.
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2016
Victor
Cheng
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10
of
19
2. Based
on
this
information,
what
effect
has
the
drop
in
occupancy
rates
had
on
Solamere’s
daily
profitability?
This
is
a
straightforward
quantitative
question
that
requires
basic
algebra.
The
trick
is
to
round
numbers.
Most
important,
as
for
all
quantitative
questions,
tell
your
interviewer
the
implications
of
your
answer.
Region
Average
number
of
Revenue
per
Variable
costs
Average
number
of
occupied
rooms
2
occupied
room
per
room
occupied
rooms
today
years
ago
Northern
810
€249
€99
730
Central
1230
€296
€101
990
Southern
1020
€351
€100
1000
To
calculate
the
impact
on
profit,
we
can
compare
the
reduction
in
revenue
in
each
of
the
three
regions,
LESS
the
reduction
in
variable
costs.
For
the
Northern
region,
there
were
80
fewer
rooms
(810
rooms
2
years
ago
–
730
rooms
today),
at
~€250
per
room
–
or
a
decline
of
~€20,000
in
revenue.
In
the
Central
region,
240
fewer
rooms
at
~€300
per
room
for
a
loss
of
~€72,000.
In
the
Southern
region,
there
were
20
fewer
rooms
–
at
€350
each,
so
€7,000.
In
total,
the
decline
in
occupancy
has
reduced
revenues
by
~
€100,000
per
night
(rounding
from
€99,000
is
fine).
However,
variable
costs
are
also
reduced.
Variable
costs
are
about
the
same
across
each
region
-‐
€100
per
room
–
and
there
were
~340
fewer
rooms
in
total.
That
means
we
can
reduce
the
impact
on
profitability
to
our
client
by
€100
*
340,
or
€34,000
per
night,
leaving
a
net
impact
on
profitability
of
€66,000
per
night.
Implications:
That
is
a
significant
decline
in
profitability
–
about
€24
million
per
year.
But
it’s
worth
noting
that
the
Southern
region
had
almost
no
drop
in
occupancy.
And
more
than
70%
of
the
drop
was
from
the
Central
region.
Are
there
lessons
that
the
other
two
regions
can
learn
from
what
the
southern
region
is
doing
to
keep
their
occupancy
rates
high?
For
a
quantitative
question,
you
likely
scored
a
‘3’
if
you
did
three
thing:.
(A)
you
solved
the
math
correctly;
(B)
you
identified
the
implications
of
the
quantitative
answer
and
told
your
interviewer
before
they
asked
you;
and
(C)
you
communicated
in
a
succinct,
organized
manner.
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2016
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11
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19
To
score
your
own
answer,
you
can
assign
a
point
for
each
of
the
above
criteria.
Did
you
correctly
solve
the
math
question?
–
Add
1
point.
Did
you
identify
the
implications
of
the
math
answer?
–
Add
1
point.
Did you communicate your answer in an organized, succinct manner? – Add 1 point.
Combine the number of points you have to get your score.
3.
How
much
would
the
occupancy
rate
in
the
Southern
region
have
to
change
to
offset
the
losses
from
the
drop
in
occupancy
from
the
Northern
and
Central
regions?
We
can
use
the
information
we
learned
in
the
first
math
problem
to
solve
this
one.
Note
–
don’t
worry
about
compounding
percentage
increases
for
these
types
of
questions.
The
goal
is
to
make
it
simple,
not
complicated.
First,
I
want
to
calculate
the
losses
from
the
Northern
and
Central
regions.
Our
client
is
losing
€61,000
per
night
from
those
two
regions
(80
rooms
*
~€250
per
room
+
240
rooms
*
~€300
per
room)-‐(320
rooms
&
~€100
in
variable
costs)
=
~€60,000.
To
offset
these
losses,
when
Southern
occupancy
increases
by
1%,
we
have
10
more
rooms
filled,
at
€350
per
room,
less
the
€1000
variable
costs
(10
rooms
X
€100
per
room)
for
a
net
impact
of
+€2500.
We
need
to
make
up
€60,000,
and
€60,000/€2500
=
24
–
so
if
we
increase
the
occupancy
of
the
Southern
Region
by
24%,
we
would
make
up
for
the
losses
in
the
other
two
regions.
Implications:
However,
this
would
be
a
significant
increase
in
occupancy,
and
it’s
unclear
whether
this
is
possible.
If
our
occupancy
in
the
southern
region
was
close
to
90%,
it
would
be
impossible
to
increase
the
occupancy
by
another
24
percentage
points
without
building
more
capacity,
and
that
would
lead
to
more
costs.
What
our
client
may
be
able
to
do
is
increase
the
rates
for
these
rooms.
If
the
Southern
Region
could
charge
higher
rates
as
occupancy
increased,
that
would
increase
revenues,
and
make
up
for
losses
in
other
regions.
For
a
quantitative
question,
you
likely
scored
a
‘3’
if
you
did
three
things:
(A)
you
solved
the
math
correctly;
(B)
you
identified
the
implications
of
the
quantitative
answer
and
told
your
interviewer
before
they
asked
you;
and
(C)
you
communicated
in
a
succinct,
organized
manner.
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2016
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19
To
score
your
own
answer,
you
can
assign
a
point
for
each
of
the
above
criteria.
Did
you
correctly
solve
the
math
question?
–
Add
1
point.
Did you identify the implications of the math answer? – Add 1 point.
Did you communicate your answer in an organized, succinct manner? – Add 1 point.
Combine the number of points you have to get your score.
This
is
an
insight
and
creativity
question
that
offers
an
opportunity
to
impress
the
interviewer
on
your
ability
to
think
outside
the
box,
while
communicating
in
a
structured
manner.
A
general
rule
for
this
type
of
question
–
“what
can
you
conclude
from
this
data,”
(as
opposed
to
“what
is
the
quantitative
answer
based
on
this
data”)
–
is
that
there
is
something
counterintuitive
in
the
data.
Your
interviewer
is
unlikely
to
present
you
a
chart
showing
revenues
increasing,
and
the
key
takeaway
is
that:
“revenues
increased.”
The
counterintuitive
takeaway
from
this
data
was
that
while
only
13%
of
customers
surveyed
cared
about
partnerships
with
car
rental
firms,
that
13%
could
represent
the
Solamere
guests
who
are
no
longer
staying
at
our
client’s
hotels.
For
these
questions,
it
is
fine
to
ask
for
30
seconds
to
review
the
data.
Write
down
your
conclusions
as
you
review
the
data,
then
organize
them
with
a
governing
thought
before
giving
your
answer.
First,
it
seems
like
there
are
tiers
of
luxury,
and
Tagg
hotels
are
perceived
to
be
at
a
higher
tier
than
our
client.
Guests
perceive
Tagg
to
be
a
more
luxurious
experience,
have
better
locations,
AND
be
less
cost
competitive
–
which
strengthens
the
idea
that
their
hotels
are
more
luxurious
than
our
client’s.
We
want
to
keep
this
in
mind
if
we
think
our
strategy
to
increase
growth
is
to
increase
the
luxury
experience
–
Tagg
already
beats
our
client.
Second,
guests
prioritize
food
and
location,
with
the
luxurious
experience
also
being
important
and
potentially
a
subset
of
the
first
two
categories.
Our
client
leads
in
none
of
these
categories
and
is
at
a
disadvantage
to
the
two
competitors.
Third,
the
category
that
our
client
leads
in
–
price
competitiveness
–
is
only
prioritized
by
half
of
surveyed
guests,
and
may
not
be
important
to
guests
looking
for
luxury
hotels.
This
would
suggest
to
me
that
our
problem
is
unlikely
to
be
that
our
prices
are
too
high.
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Fourth,
while
only
13
percent
of
surveyed
guests
cared
about
partnerships
with
car
rental
firms
and
travel
agencies,
our
client
is
WAY
behind
in
this
category.
I
suspect
we
are
not
partnering
with
other
firms
at
all,
and
if
we
are,
our
guests
are
unaware.
This
is
only
valued
by
a
fraction
of
guests.
However,
my
hypothesis
is
that
because
this
is
the
category
where
there
is
a
clear
separation,
this
is
driving
customers
away
from
our
hotel.
What
we
would
need
to
find
out
to
prove
or
disprove
this
hypothesis
is:
who
are
the
13%
who
care
about
this
category?
Are
they
former
Solamere
customers?
For
creativity
questions,
there
is
no
single
right
answer.
Any
of
the
following
insights
would
be
also
be
acceptable
and
could
lead
to
a
‘3’
score:
-‐Competitor
Willard
has
a
unique
value
proposition
by
providing
great
food,
yet
still
not
being
considered
a
luxurious
property
–
what
is
driving
the
disconnect,
and
what
can
our
client
learn?
-‐Because
our
client
is
considered
more
cost
competitive,
could
we
target
lower
income
–
non
/
luxury
customers?
Would
that
damage
our
brand?
-‐Could
we
advertise
to
customers
currently
choosing
Willard
hotels
that
Solamere
hotels
are
in
better
locations?
We
strongly
beat
Willard
in
guest
perception
and
this
is
valued
by
many
guests.
Score 2 -‐ If you had three of the above insights, score a ‘2’.
Score 1 -‐ If you had two of the above insights, score a ‘1’.
Score 0 -‐ If you had one or fewer of the above insights, score a ‘0’.
5.
What
are
the
factors
that
Solamere
should
consider
when
deciding
which
car
rental
firm
–
or
multiple
firms
-‐
Solamere
should
partner
with
for
a
discount
for
its
guests?
In
an
actual
client
setting,
consultants
would
help
a
client
answer
this
question
by
creating
a
scorecard
for
reviewing
car
rental
firms.
Each
score
card
would
have
factors
and
a
weight
for
each
factor,
and
would
produce
a
numerical
score
to
compare
options.
An
excellent
answer
would
be
showing
your
interviewer
that
you
would
operate
in
the
same
way.
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2016
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*******
SAMPLE
EXCELLENT
RESPONSE
THAT
WOULD
SCORE
A
‘3’
******
When
picking
a
car
rental
firm
to
partner
with
our
client,
there
are
four
factors
that
I
would
want
to
evaluate
for
each
of
our
potential
partners.
The
goal
of
this
partnership
would
be
to
give
guests
an
incentive
to
choose
Solamere
hotels.
Of
these
factors,
‘A’
is
the
most
important
and
would
have
the
most
weight
in
our
decision-‐making
criteria.
Other acceptable factors would be structuring your answer to look at:
-‐What rental car firms firms the competitor hotels are partnered with
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2016
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The
best
way
to
score
your
own
answer
on
a
structuring
problem
as
you
complete
this
practice
case
is:
if
you
had
90%
or
more
of
the
above
factors,
and
your
answer
was
organized
and
succinct,
you
likely
scored
a
‘3’.
Score
2
-‐
If
your
answer
had
between
66%
and
90%
of
the
factors
in
the
sample
answer
above,
your
answer
was
likely
a
‘2’
–
or
Strong.
Score
1
-‐
If
your
answer
had
between
50%
and
66%
of
the
factors
in
the
sample
answer
above,
your
answer
was
likely
a
‘1’
–
or
Below
the
bar.
Score
0
-‐
If
your
answer
had
less
than
50%
of
the
above
factors,
your
answer
was
likely
a
‘0’
–
or
Clearly
Below
the
bar.
Your
interviewer
will
also
be
grading
you
on
how
succinct
you
are
and
how
effective
you
are
as
a
communicator.
This
will
affect
your
score.
For
example,
if
you
had
100%
of
the
above
factors,
but
you
took
5
minutes
to
explain
your
answer,
and
jumped
around
between
categories,
you
would
not
get
a
‘3’
–
even
though
you
addressed
all
of
the
right
factors.
Jumping
around
between
categories,
or
repeating
factors
can
turn
a
‘3’
answer
into
a
‘0’.
Likewise,
if
you
provided
only
60%
of
the
above
answers
but
did
so
in
a
succinct,
organized
manner,
your
interviewer
may
bump
the
score
for
your
answer
up
to
a
‘2’.
6. Which of these deals do you think would be best for our client?
Any
of
these
options
could
reasonably
be
the
‘best’
for
our
client.
What
is
important
is
that
you
pick
an
answer
that
you
can
defend
with
data
from
the
case.
What
you
DON’T
want
to
do
is
overly
hedge
and
say,
“we
do
not
have
enough
information
to
know
which
of
these
is
the
best,”
or
“all
of
these
have
some
strong
points
but
we
need
more
data
before
selecting
the
best
answer.”
Be
decisive.
Frame
things
in
terms
of
a
hypothesis.
Be
willing
to
defend
your
answer
if
the
interviewer
pushes
back
to
test
your
convictions,
which
they
likely
will.
*******
SAMPLE
EXCELLENT
RESPONSE
THAT
WOULD
SCORE
A
‘3’
******
My
hypothesis
is
that
choice
C
would
be
the
best
offer
for
our
client
to
pursue.
What
we
are
trying
to
do
is
increase
Solamere
hotels’
occupancy
rates,
and
I
believe
that
choice
C
would
best
help
with
that
for
these
three
rationale:
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A. Convenience
matters
to
our
customers
a. Based
on
our
customer
survey,
we
know
that
79
percent
of
luxury
customers
find
it
important
that
hotel
locations
are
near
desirable
city
sights.
This
suggests
they
care
about
convenience.
If
Solamere
guests
had
free
transportation
to
and
from
the
airport,
and
could
pick
up
rental
cars
at
our
hotel,
that
would
provide
convenience.
B. Our
customers
are
not
very
price-‐sensitive
a. Options
A
&
B
provide
cost
savings
to
our
customers.
But
the
savings
are
relatively
small
–
10%
in
option
A.
And
we
know
that
our
customers
are
staying
in
luxury
hotels
and
that
only
51%
of
luxury
guests
said
that
the
hotel
being
cost
competitive
was
a
priority
of
theirs.
b. Further,
option
B
provides
additional
revenue
to
our
hotel,
but
our
client
hired
us
to
increase
occupancy
rates,
not
revenue.
C. Relationship
could
expand
to
provide
other
benefits
a. If
the
car
rental
firm
is
offering
transportation
to
and
from
the
airport,
could
they
provide
additional
transportation
benefits
to
our
guests?
Perhaps
transportation
to
and
from
other
city
sights
that
are
not
near
our
hotel,
or
to
four-‐star
restaurants
–
both
of
which
we
know
are
important
to
guests.
Score 3 – If your answer had at least three rationale, using data from the case, to justify your selection;
Score 2 – If your answer had at two rationale, using data from the case, to justify your selection;
Score 1 – If your answer had at one rationale, using data from the case, to justify your selection;
Score 0 – If your answer had no rationale that used data from the case to justify your selection.
7.
What
would
the
net
impact
be
on
the
Brussels
property’s
profits
if
the
hotel
were
able
to
recover
half
of
the
lost
occupancy?
What
if
they
recovered
all
of
the
lost
occupancy?
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Revenue
per
room
was
€275,
with
a
new
cost
of
~€315
per
night
for
all
of
the
82
rooms
(when
rounding).
The
new
revenue
per
night
would
be
€315
*
82
rooms
or
~€26,000
per
night.
Before
this
recovery,
the
hotel
was
making
€275
while
filling
74
rooms,
or
~€20,000
per
night.
We
know
that
the
increase
in
rooms
has
led
to
additional
variable
costs
of
€5,000
per
night,
so
there
is
a
net
impact
of
€1,000
per
night
(€26,000
per
night
-‐
€20,000
per
night
-‐
€5,000
in
additional
variable
costs
for
having
80%+
in
occupancy).
Second,
to
calculate
the
impact
of
recovering
all
lost
occupancy:
revenue
will
increase
from
€275
by
30%,
or
~€350
per
room,
and
90
rooms
will
be
sold.
Total
revenue
will
be
€31,500,
with
additional
variable
costs
of
€11,000
per
night.
New
revenue
will
be
€20,500
per
night.
The
implications
of
this
number
are
that
increasing
occupancy
not
help
our
profitability
because
of
the
high
variable
costs.
I
would
want
to
understand
why
these
increased
variable
costs
are
so
high
for
the
client,
and
what
we
could
do
to
lower
them.
If
it
is
not
possible
to
lower
the
variable
costs,
I
would
suggest
the
client
keep
occupancy
at
its
reduced
level.
For
a
quantitative
question,
you
likely
scored
a
‘3’
if
you
did
three
things:
(A)
you
solved
the
math
correctly;
(B)
you
identified
the
implications
of
the
quantitative
answer
and
told
your
interviewer
before
they
asked
you;
and
(C)
you
communicated
in
a
succinct,
organized
manner.
To
score
your
own
answer,
you
can
assign
a
point
for
each
of
the
above
criteria.
Did
you
correctly
solve
the
math
question?
–
Add
1
point.
Did
you
identify
the
implications
of
the
math
answer?
–
Add
1
point.
Did you communicate your answer in an organized, succinct manner? – Add 1 point.
Combine the number of points you have to get your score.
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2016
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2016
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