Question

Walt Disney reports the following information for its two Parks and Resorts divisions.

	U.S	International
	Current year	Prior Year	Current Year	Prior Year
Hotel occupancy rate	87%	83%	79%	78%

Assume Walt Disney uses a balanced scorecard and sets a target of 85% occupancy in its resorts. Using Exhibit 22.18 as a guide, show how the company’s performance on hotel occupancy would appear on a balanced scorecard report.

Short answer

U.S division will reflect good performance on the balanced scorecard. At the same time, the international division does not reflect efficient performance on the balanced scorecard.

Step-by-step solution

Definition of Occupancy Rate

The rate that reflects the percentage of rooms or space occupied by the customer from the total available space is known as the occupancy rate.

Company’s performance on the balanced scorecard

International Division: International division of the resort is not performing well according to the target established. The business entity is expecting 85% of occupancy in its resort, but the international division has an occupancy rate of 79% in the current year and 78% in the prior year.

U.S: U.S division is performing well because its occupancy rate in the prior year was 83%, only 2% less than the established rate. The occupancy rate in the current year is 87% which is more than the expected occupancy rate. Therefore, a balanced scorecard of the U.S division will reflect good performance.