Management question
Locked evidence · 2026-09-16This event makes money. But are we giving up even more valuable room business to take it?
Event pricing and group accommodation are profitable. Expected displacement makes the combined decision R7 000 worse than preserving room capacity.
What PP sees
The issue is opportunity cost, not inadequate event delivery economics or an unprofitable group room rate.
What is driving it
- 1. Expected displaced alternative contribution−R41 000
- 2. Event contribution+R24 000
- 3. Group-room contribution+R10 000
Consequence
R24 000 event + R10 000 rooms − R41 000 displacement = −R7 000.
Impact on the venue
- Net decision value −R7 000
- 20 occupied room-nights held
Reference point
Opportunity-cost recovery required
R7 000 total / R350 per occupied room-night
Net decision bridge
Management options
1. Room-rate recovery
Add R350 per occupied room-night
Net decision value R0
Improves by R7 000
Customer accepts the revised rate.
2. Event / minimum-spend recovery
Add R7 000 event revenue
Net decision value R0
Improves by R7 000
Recovery of room opportunity cost, not event delivery cost.
3. Reduce room block
Reduce guaranteed room-nights from 20 to 12
Group contribution R6 000 · displacement R24 600 · net R5 400
Improves by R12 400
Rerun through the displacement engine.
4. Use a lower-demand date
Apply the approved 40% demand factor
Displacement R4 100 · net R29 900
Improves by R36 900
Demand evidence is approved for the alternative date.
Confidence & evidence
Confidence: high
Source: PincushionDemoEstateScenario · vinteractive-1
Calculation: excel-v0.2.1-connected-port-2
Policy: fixture-1