John M. Smith is considering the purchase of either the Seaside resort or the Desert Inn & Suites. He has gathered the following information on the two properties:

Desert Inn &

Seaside Resort Suites Number of rooms 225 250 Current daily occupancy 75% 68%

Demand growth rate for next 4 years 6% 8%

Required:

1. Calculate the projected number of room nights to be sold each year for the next 4 years for each property.

2. Calculate the daily paid occupancies at the end of each of the next 4 years for each property, assuming no additional rooms are constructed.

3. Advise Mr. Smith as to which property should be purchased if his investment time frame is 4 years.