Over the last five years, demand for hotel rooms in : GMAT Critical Reasoning (CR)
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# Over the last five years, demand for hotel rooms in

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11 Jun 2008, 06:53
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Over the last five years, demand for hotel rooms in Cenopolis has increased significantly, as has the average price Cenopolis hotels charge for rooms. These trends are projected to continue for the next several years. In response to this economic forecast, Centennial Commerical, a real state developer, is considering a plan to convert several unoccupied office buildings it owns in Cenopolis inot hotels in order to maximize it's revenue from these properties.

Which of the following would it be most useful for Cenennial Commerical to know in evaluating the plan it is considering ?

Whether the population of Cenopolis is expected to grow in the next several years.
Whether demand for office space in Cenopolis is projected to increase in the near future.
Whether the increased demand for hotel rooms, if met, is likely to lead to an increase in the demand for other travel-related services.
Whether demand for hotel rooms has also increased in other cities where Centennial owns office buildings
Whether, on average, hotels that have been created by converting office buildings have fewer guest rooms than do hotels that were built as hotels.
[Reveal] Spoiler: OA

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11 Jun 2008, 07:02
B it is.
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11 Jun 2008, 08:14
Over the last five years, demand for hotel rooms in Cenopolis has increased significantly, as has the average price Cenopolis hotels charge for rooms. These trends are projected to continue for the next several years. In response to this economic forecast, Centennial Commerical, a real state developer, is considering a plan to convert several unoccupied office buildings it owns in Cenopolis inot hotels in order to maximize it's revenue from these properties.

Which of the following would it be most useful for Cenennial Commerical to know in evaluating the plan it is considering ?

Whether the population of Cenopolis is expected to grow in the next several years.
-doesnt affect the plan
Whether demand for office space in Cenopolis is projected to increase in the near future.
-no sense converting office space into hotels in case the demand for office space would increase in the near future.
Whether the increased demand for hotel rooms, if met, is likely to lead to an increase in the demand for other travel-related services.
-out of scope of plan
Whether demand for hotel rooms has also increased in other cities where Centennial owns office buildings
-other cities is out of scope of the plan
Whether, on average, hotels that have been created by converting office buildings have fewer guest rooms than do hotels that were built as hotels.
-fewer guest rooms or not - here some revenue is better than having none at all from unoccupied office space.

B.
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11 Jun 2008, 08:40
Over the last five years, demand for hotel rooms in Cenopolis has increased significantly, as has the average price Cenopolis hotels charge for rooms. These trends are projected to continue for the next several years. In response to this economic forecast, Centennial Commerical, a real state developer, is considering a plan to convert several unoccupied office buildings it owns in Cenopolis inot hotels in order to maximize it's revenue from these properties.

Which of the following would it be most useful for Cenennial Commerical to know in evaluating the plan it is considering ?

Whether the population of Cenopolis is expected to grow in the next several years.
Whether demand for office space in Cenopolis is projected to increase in the near future.
Whether the increased demand for hotel rooms, if met, is likely to lead to an increase in the demand for other travel-related services.
Whether demand for hotel rooms has also increased in other cities where Centennial owns office buildings
Whether, on average, hotels that have been created by converting office buildings have fewer guest rooms than do hotels that were built as hotels.

I think it is E. Although not the best, E is the only answer choice that talks about 'conerverting office buildings'. We're not so much concerned about 'office space' - even if the demand for office space increased, who know what the revenue is like for office space.
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11 Jun 2008, 09:16
B for me

The offices are vacant due to no or low demand. If demand increased then the offices will not be vacant.

I used POE too
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11 Jun 2008, 09:21
I said B as well
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11 Jun 2008, 15:15
B looks the best.

If the demand for offices increase as well, it would not be a clever idea to convert those building into Hotels.
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11 Jun 2008, 15:28
The plan calls for maximizing revenues by converting office buildings to hotels. I think they need to know if there can be enough number of rooms to maximize the revenues. So it is E for me.
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11 Jun 2008, 15:59
I think it should be E.

As for B, it is possible for the demand for offices to increase while price remains constant, which does not appeal to the expected trend.
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14 Jun 2008, 16:18
whats the OA?
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14 Jun 2008, 19:56
It should be 'B'.
Whether the demand for office space is increased will justify the developer's plan to convert the unoccupied office building to a new hotel.
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15 Jun 2008, 05:29
B it should be .....
Pl post the OA as B
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09 Oct 2010, 10:46
A bit late, but yeah the answer is B.

I dig up this thread as I was looking for the problem typed. In appears in GMATPrep, and I don't want to retype all my problems.
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12 Dec 2010, 23:55
This is a GMAT Prep question and the OA is B.

If the demand for office space goes up - it may generate more revenue than hotel rooms. If the demand for office space space doesnt rise - a hotel is the viable option.

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13 Dec 2010, 06:44
+1 for B
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13 Dec 2010, 15:08
+1 B
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13 Dec 2010, 21:00
I will go for - B

In Argument, its mentioned "Un occupied " office space... nowhere its mentioned that cenpolis will convert all his occupied offices also into hotels.... So defintly office demands are not more and revenues generating through occupied offices is also OK. So, before converting their unoccupied office space into hotel....demand of office in future should be checked by the business.....
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06 Jan 2011, 12:43
I could make a case in favor of E.
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01 Aug 2011, 00:11
I will go for - B

The aim of the plan is to maximize its revenues.

If the demand for office space in Cenopolis is projected to increase in the near future, Centennial Commercial needs not to spend its money to convert its office buildings into hotels.

Converting into hotel costs a lot(purchasing furniture, hiring employees, promoting hotel, renovating, and so on.)

Compare to the situations.

Just lenting Office facilities without further investment(in the near future, the demand for office space in Cenopolis would increase) or converting into hotel.

What if you are a CEO of Centennial Commercial, which way would you choose to maximize its revenues?

e) it's too complicate to calculate. we need lots of information to know e) is correct or not.
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03 Feb 2016, 20:53
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Re: Over the last five years, demand for hotel rooms in   [#permalink] 03 Feb 2016, 20:53

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