The 5-Second Trick For hbr case solution
The 5-Second Trick For hbr case solution
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As in almost any lodge, the management price will probably not be particularly equal into the cash Expense. The administration fee is usually tied to the lodge's revenue. Nevertheless, the resort's earnings will likely be smaller compared to the capital And so the management rate is frequently higher.
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For illustration, while family vacation houses and professional Houses have very little depreciation, most real-estate does have a substantial level of depreciation.
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The management cost is lower compared to Procedure and depreciation expenses. Consequently, the general expense of ownership is greater compared to the cash. Therefore, the overall expense of administration is usually lessen in comparison to the capital costs.
Although this may perhaps audio just like a major variance, The reality is that it signifies a negligible part of the overall expense of administration.
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