What is the Hubbart Formula?
A) A pricing method which starts with the desired ingredient cost mark up and works forwards to calculate the price of the item.
B) A pricing method which starts with the desired amount of profit and works backwards to calculate the average room rate.
C) A pricing method which starts with the view that consumers assume certain price levels are associated with particular quality standards.
D) A pricing method which starts with the assumption that the level of competition is of paramount importance when establishing the price of a hotel room.

Question

Quizplus · Accepted Answer

The Hubbart Formula is a pricing method that starts with the desired amount of profit and works backwards to calculate the average room rate. It takes into account the hotel's fixed costs, variable costs, and desired profit margin to determine the ideal price for a room.

What Is the Hubbart Formula