As a consultant for the Feasibility Company, you are to estimate the undersupply of rooms for the greater Remington area. Remington has five hotels with current occupancies as follows:

Hotels Number of Rooms Average Daily Occupancy Alpha 200 68%

Beta 250 78%

Charlie 150 72%

Delta 200 84%

Echo 180 92%

Expected annual growth in demand is as follows:

Sales Mix Annual Compound Growth Business 50% 10%

University 20% 6%

Government 20% 8%

Convention 5% 2%

Tourist 5% 2%

Assume that a 65% average occupancy is reasonable for hotels in this area to make reasonable profits.

Required:

1. What is the average daily demand for room nights at this time?

MS What is the average annual growth rate?

What is the projected average daily demand 5 years hence?

Based on the above information, calculate how many more rooms the entire area could support and still achieve a 65% daily occupancy in 5 years.

ie a