As a managing partner of the Spartan Consulting firm, you are responsible for putting together the information provided by your consultants’ fieldwork. One of the major projects your office is involved with is a lodging feasibility study for a hotel catering to business travelers. The research has been conducted, and you must use it to put together the actual feasibility study.

1. There are already 200 rooms in the area, and the average occupancy is presently 84%. The expected growth in demand is 10% per year. Thus, in year two, an average of 184.8 rooms are expected to be sold on a daily basis.
2. The proposed hotel would have 200 rooms. It would get 90% of the fair share the first year, 100% the second year, and 110% in years three to five.
Average occupancy is 1.1.
3. The room rate is projected to be 150 and is expected to increase 5% each year.
4. Assume 360 operating days in the year.
5. The hotel would have a restaurant with 40 seats functioning mainly as a convenience for guests at breakfast. Due to buffet service, a seat turnover of 2.5 is possible. The average check is $3.99 the first year and $4.30 the second; it then increases 5% a year for years three to five.
6. Lunch is the least busy meal of the day; only 10% of the guests eat lunch.
Average check is $5.95. Dinner will be enjoyed by 35% of the guests, and the average check is projected to be $9.50 each week day. On Friday and Saturday, some local residents are projected to dine in the restaurant; this is estimated to increase demand by 10% for Friday and Saturday. (Assume 52 weekends each year.)
7. According to Spartan Consulting figures, the total other revenue (all revenues other than rooms and food and beverage) is 4% of total revenue.
8. Room expenses are projected at 25% of room revenue; food and beverage department expenses are projected to be 60% of food and beverage revenues; other expenses are estimated to be 2% of total revenues.
9. Annually, administrative and general expense is estimated to be $400,000, marketing to be $300,000, and property operation and maintenance and energy costs to be $500,000.
Required:
Prepare pro forma operating statements for the lodging feasibility study for 5 years based on the above information. Round all amounts to the nearest dollar.