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TryOwning · Foundations · Concept 4
Ticket 1 of 10, 0 done

Pricing · 14 min

What should you charge?

Cost tells you the lowest price you can live with. Customers tell you the highest. Everything in between is a choice, and some businesses make it again every day.

HOTELROOMS TONIGHT
Ticket 01 · Warm-upTable 1

Warm-up: one more guest tonight

A quick one from the last lesson, in a new business. A hotel room would sit empty tonight, and a last-minute guest offers $120example (example number: Simplified example: what a last-minute guest pays for a room that would sit empty.) for it. Cleaning, towels and the card fee come to $30example (example number: Simplified example: cleaning, towels and the card fee for one occupied room, as in the lab later on.); the building and the staff are paid either way. What share of the $120example (example number: Simplified example: what a last-minute guest pays for a room that would sit empty.) is extra profit?

30%
0%100%
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Sources and every number (4 sources)

Sources

  • Chipotle Mexican Grill annual report (Form 10-K), fiscal 2025 · Chipotle Mexican Grill, Inc., filed with the U.S. Securities and Exchange Commission, 2025
  • Marriott International, Inc. Form 10-K for the fiscal year ended December 31, 2025 · Marriott International, Inc. (filed with the U.S. SEC), 2025
  • McDonald's Corporation annual report (Form 10-K), fiscal 2025 · McDonald's Corporation, filed with the U.S. Securities and Exchange Commission, 2025
  • Southwest Airlines Co. Form 10-K for the fiscal year ended December 31, 2025 · Southwest Airlines Co. (filed with the U.S. SEC), 2025

Every number

  • $120example (example number: Simplified example: what a last-minute guest pays for a room that would sit empty.) · Simplified example: what a last-minute guest pays for a room that would sit empty.
  • $30example (example number: Simplified example: cleaning, towels and the card fee for one occupied room, as in the lab later on.) · Simplified example: cleaning, towels and the card fee for one occupied room, as in the lab later on.
  • 75%example (example number: Worked out from the example: the price minus the per-room costs, divided by the price.) · Worked out from the example: the price minus the per-room costs, divided by the price.
  • 2.1%sec.gov ·2025 · Chipotle's menu price increase, fiscal 2025, from its annual report's results table.
  • −2.9%sec.gov ·2025 · Change in transactions at restaurants open at least thirteen months, fiscal 2025.
  • 2.9%sec.gov ·2025 · How much transactions fell at restaurants open at least thirteen months, fiscal 2025.
  • 1.2%sec.gov ·2025 · Increase in the average check at the same restaurants, fiscal 2025.
  • 1.7%sec.gov ·2025 · How much comparable restaurant sales fell, fiscal 2025.
  • 2.9%sec.gov ·2025 · Chipotle's menu price increase, fiscal 2024, from the fiscal 2025 annual report's results table.
  • 5.3%sec.gov ·2025 · Increase in transactions at comparable restaurants, fiscal 2024.
  • $2.40example (example number: Simplified example: tortilla, eggs, potatoes, cheese, salsa and the wrapper for one burrito.) · Simplified example: tortilla, eggs, potatoes, cheese, salsa and the wrapper for one burrito.
  • 30%example (example number: Simplified example: a food-cost target, the way the Restaurant track's first lesson prices a dish.) · Simplified example: a food-cost target, the way the Restaurant track's first lesson prices a dish.
  • $8example (example number: Worked out from the example: the ingredient cost divided by the food-cost target.) · Worked out from the example: the ingredient cost divided by the food-cost target.
  • $7.50example (example number: Simplified example: the cheapest breakfast burrito at cafés nearby.) · Simplified example: the cheapest breakfast burrito at cafés nearby.
  • $10example (example number: Simplified example: the priciest breakfast burrito at cafés nearby.) · Simplified example: the priciest breakfast burrito at cafés nearby.
  • $8.75example (example number: Simplified example: the price the owner picks.) · Simplified example: the price the owner picks.
  • 27.4%example (example number: Worked out from the example cost and price.) · Worked out from the example cost and price.
  • $190.33sec.gov ·2025 · Average daily rate, comparable systemwide hotels in the US and Canada, fiscal 2025.
  • 69.5%sec.gov ·2025 · Occupancy, comparable systemwide hotels in the US and Canada, fiscal 2025.
  • $132.35sec.gov ·2025 · Revenue per available room, comparable systemwide hotels in the US and Canada, fiscal 2025.
  • $132.28sec.gov ·2025 · Worked out from the annual report: the average daily rate times occupancy. The report's own figure is a few cents higher because of rounding.
  • $190example (example number: Simplified example: about what Marriott's US and Canadian hotels averaged a night in fiscal 2025.) · Simplified example: about what Marriott's US and Canadian hotels averaged a night in fiscal 2025.
  • $160example (example number: Simplified example: a lower weeknight price for the lab's quick try.) · Simplified example: a lower weeknight price for the lab's quick try.
  • $210example (example number: Simplified example: a higher weekend price for the lab's quick try.) · Simplified example: a higher weekend price for the lab's quick try.
  • $130example (example number: Simplified example: a price low enough to fill nearly every room in the lab.) · Simplified example: a price low enough to fill nearly every room in the lab.
  • $15example (example number: Simplified example: one week of drop-in classes at a small yoga studio: the lowest price tried.) · Simplified example: one week of drop-in classes at a small yoga studio: the lowest price tried.
  • $20example (example number: Simplified example: one week of drop-in classes at a small yoga studio: the middle price tried.) · Simplified example: one week of drop-in classes at a small yoga studio: the middle price tried.
  • $25example (example number: Simplified example: one week of drop-in classes at a small yoga studio: the highest price tried.) · Simplified example: one week of drop-in classes at a small yoga studio: the highest price tried.
  • 120 visitsexample (example number: Simplified example: one week of drop-in classes at a small yoga studio: visits at the lowest price.) · Simplified example: one week of drop-in classes at a small yoga studio: visits at the lowest price.
  • 100 visitsexample (example number: Simplified example: one week of drop-in classes at a small yoga studio: visits at the middle price.) · Simplified example: one week of drop-in classes at a small yoga studio: visits at the middle price.
  • 70 visitsexample (example number: Simplified example: one week of drop-in classes at a small yoga studio: visits at the highest price.) · Simplified example: one week of drop-in classes at a small yoga studio: visits at the highest price.
  • $3example (example number: Simplified example: towels, cleaning and the card fee for one visit.) · Simplified example: towels, cleaning and the card fee for one visit.
  • $1,440example (example number: Worked out from the example: the lowest price minus the cost per visit, times the visits.) · Worked out from the example: the lowest price minus the cost per visit, times the visits.
  • $1,700example (example number: Worked out from the example: the middle price minus the cost per visit, times the visits.) · Worked out from the example: the middle price minus the cost per visit, times the visits.
  • $1,540example (example number: Worked out from the example: the highest price minus the cost per visit, times the visits.) · Worked out from the example: the highest price minus the cost per visit, times the visits.
  • $12example (example number: Worked out from the example: what each visit leaves at the lowest price.) · Worked out from the example: what each visit leaves at the lowest price.
  • $17example (example number: Worked out from the example: what each visit leaves at the middle price.) · Worked out from the example: what each visit leaves at the middle price.
  • $22example (example number: Worked out from the example: what each visit leaves at the highest price.) · Worked out from the example: what each visit leaves at the highest price.
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