Not Understanding IR Problem Statement

[freiter1]

In the OG Online IR question bank a Multi-source reasoning question about hotel states, hotel recieves reimbursement from conference organize for 25% of the block rate per night for each unoccupied roon the conference block.

Then it gives you information on the block rate and lowest rate in the host hotel for several hotel. The question says to select yes if the hotel would lose revenue if a room is vacant.

The answer states that the hotel loses money if the ratio of the lowest rate to the block rate is less than 0.75

When I read this problem I reasoned that the hotel would lose money if the ratio is less than 0.25. I don't understand what I'm missing. Any clarification is appreciated, thanks!

[freiter1]

Ah I figured it out. So the piece of the puzzle I was over looking is that if a conference attendee does not book a room at the block rate(BR) than they booked one at the lowest rate(LR). Therefore in order to lose money

BR>LR+0.25BR which can be rewritten as 0.75BR>LR which can be simplified as 0.75>LR/BR as the solution stated.

I think what clouded my judgement is that I was thinking if a room was booked at BR than the lowest rate room the conference attendee could've booked would be booked by someone not part of the conference, in other words if a block rate wasn't booked than the hotel can't book it with someone that is not part of the conference. By this logic the reimbursement would have to be greater than the lowest rate. However, this is looking at revenue potential and it could also be argued that the hotel could not book the room that was not part of the conference...

I think my takeaway is that I was extending my scope beyond the problem statement....