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# Over the last five years, demand for hotel rooms in Cenopolis has

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Director
Joined: 10 Feb 2006
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Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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Updated on: 09 Apr 2018, 06:16
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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 into 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 ?

(A) Whether the population of Cenopolis is expected to grow in the next several years.

(B) Whether demand for office space in Cenopolis is projected to increase in the near future.

(C) Whether the increased demand for hotel rooms, if met, is likely to lead to an increase in the demand for other travel-related services.

(D) Whether demand for hotel rooms has also increased in other cities where Centennial owns office buildings

(E) Whether, on average, hotels that have been created by converting office buildings have fewer guest rooms than do hotels that were built as hotels.

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Originally posted by alimad on 11 Jun 2008, 07:53.
Last edited by hazelnut on 09 Apr 2018, 06:16, edited 2 times in total.
Manager
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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11 Jun 2008, 09:40
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.
Director
Joined: 05 Jan 2008
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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11 Jun 2008, 10:16
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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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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11 Jun 2008, 16:15
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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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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11 Jun 2008, 16:28
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.
Intern
Joined: 17 May 2008
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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11 Jun 2008, 16:59
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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Director
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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14 Jun 2008, 20:56
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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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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15 Jun 2008, 06:29
B it should be .....
Pl post the OA as B
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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09 Oct 2010, 11:46
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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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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13 Dec 2010, 00:55
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.

Manager
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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13 Dec 2010, 22:00
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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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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06 Jan 2011, 13:43
I could make a case in favor of E.
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Joined: 22 May 2011
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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01 Aug 2011, 01:11
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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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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04 Feb 2016, 05:14
I feel the "Option E" goes beyond the argument. It might sound true in real life scenario.
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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24 Sep 2016, 04:35
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 into hotels in order to maximize it's revenue from these properties.

Type -Evaluate
Boil it down - Plan to convert several unoccupied office buildings it owns in Cenopolis into hotels in order to maximize it's revenue from these properties.
Pre-Thinking - Whether these office buildings are likely to remain unoccupied in the near future

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

A.Whether the population of Cenopolis is expected to grow in the next several years. Irrelevant
B.Whether demand for office space in Cenopolis is projected to increase in the near future. Correct
C.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
D.Whether demand for hotel rooms has also increased in other cities where Centennial owns office buildings. Irrelevant
E.Whether, on average, hotels that have been created by converting office buildings have fewer guest rooms than do hotels that were built as hotels. Out of scope

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Manager
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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04 Oct 2016, 10:38
Both B and E seem ok to me.

The slight difference is that B recognize Centennial Co. as a real state developer, and not as a hotel builder. The masterplan was to build office buildings and get revenue out of them.

Therefore, turning this entire plan into something else is secondary.

Now, if the masterplan has a slightly chance to work, let's stick to it.
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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07 Dec 2016, 01:40
I could not decide between B and E and ended up choosing E.

I do not think B is 100% clear, the question mentions that demand for hotel rooms is increasing significantly, whereas choice B just says "Whether demand for office space in Cenopolis is projected to increase in the near future." - even if demand for office space does increase, what if it just increases by a little bit and not significantly? If office space demand only increases a little bit then it does not justify not converting the office buildings into hotels.
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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17 Dec 2016, 23:11
What would you want to know if you were the developer? I, for one, would want to know if I am maximizing my potential revenues by converting space to hotel rooms. Clearly B.
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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03 Jan 2017, 15:44
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.
(Out Of Scope) since we are not considering the factors that have led to the rise in the demand.
Whether demand for office space in Cenopolis is projected to increase in the near future.
Most appropriate answer since if the demand for the office space also rises then ther is n need for additional investment for converting the building to hotel.Although the statistics are not provided to make it a concrete choice ,it is still the most appropriate answer choice.
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 the arguments)
Whether demand for hotel rooms has also increased in other cities where Centennial owns office buildings
(Out Of Scope as only Cenopils hotel demands are discussed)
Whether, on average, hotels that have been created by converting office buildings have fewer guest rooms than do hotels that were built as hotels.
The choice provides a valid arument but it is irrelevant in the current scenario as the builder will anyway save money in converting the already existing building rather than building new ones as Hotels
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Re: Over the last five years, demand for hotel rooms in Cenopolis has [#permalink]

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06 Jun 2017, 20:03
I think E is wrong.
It is because the plan is about converting, not building new ones. Also, we cannot know anything about fewer guest rooms. We do know converting is enough to maximize the revenues; building new ones may or may not maximize the revenues.
Re: Over the last five years, demand for hotel rooms in Cenopolis has   [#permalink] 06 Jun 2017, 20:03

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