Sheraton Wall Case

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SHERATON MONTREAL

(Braithwaite) “I will give you my decision in about a week,” said Georges Villedary, directeur general of the Le Centre Sheraton, Montreal, as he put down the phone and looked pensively at the letter before him. The letter, dated March 15, 1994, was from Alitalia requesting a one-year contract for 40 room at $42 per night. In addition, the hotel would have to provide a crew allowance of $25,000 per day. Bills are to be paid within seven days of receipt of statement on a weekly basis. The problem facing Georges was a simple one: does he take Alitalia and fill the 40 rooms for 365 days at $42 or does he refuse the business and hope that he can sell the rooms at the full rack rate of $105.00? Last year he had 115 nights sold out.

General Background of the Hotel Le Centre Sheraton was located in the downtown area of Montreal. It was viewed as a corporate/convention hotel. In 1987 the hotel was named winner of the Canadian Automobile Association “Four Diamond Award” and the “Four Star Award” from the Mobil Travel Guide. The hotel had 824 rooms including the Sheraton Towers – a prestigious five-storey hotel within a hotel. The Towers had its own check-in facilities, 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 an additional 24 suites and six rooms specially equipped for people with disabilities. All rooms were equipped with a pay-TV system. The hotel operated three restaurants. Le Point de Vue on the 37th floor offered gourmet 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 a seating capacity of 259. La Musette was a European-style “express” restaurant on the promenade level for…...

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