The balanced scorecard and benchmarking
Kestrel Hotels Co compares the housekeeping cost of its city hotel with that of a rival city hotel, using figures the rival publishes. Both hotels are open 365 nights a year.
Kestrel's hotel has 120 rooms with average occupancy of 75%. Its housekeeping cost for 2026 was $1,445,400, which includes $131,400 for laundry it does in-house.
The rival has 200 rooms with average occupancy of 80%, and its housekeeping cost for 2026 was $2,190,000. It sends its laundry to an outside firm and reports that cost elsewhere, not in housekeeping.
Kestrel compares housekeeping cost per occupied room night, excluding laundry, and has set its hotel the target of matching the rival's figure.
If Kestrel's hotel meets the target at its 2026 level of occupancy, by how much will its annual housekeeping cost, excluding laundry, fall, in $? (2 marks)