A B C D E F G H 1 Strategic Capital Partners 2 Capital Project Request 4 Hotel Marriott Tapitio Pass 5 GM Hugo Gryll 7 Project Name Build Market adjacent to the Front Desk Project Description: Franchisor has approved a new "grab and go" market place as a replacement for both a gift shop and room service. This is based on a long term study of guest preferences, and the fact that room service looses considerable money in 9 every one of the hotels. Our project will utilize a portion of the gift shop space adjacent to the front desk, and the space will be cashiered by the front desk associates. The remaining space form the gift shop will be repurposed to a business/shipping center that will be leased. A local operator has signed a letter of intent to lease space for 10 years. 10 Proforma Assumptions: Our proforma assumptions include the labor and other expense savings from the elimination of room service, the 11 lease income from the existing gift shop and the incremental sales and profit of the market based on the data supplied from the Franchisor. This data is based on results from 750 existing units, and is sized based on our occupancy. 12 13 Risk Low 14 15 Cash Flow Proforma 18 Period Amount 17 Capital Investment (65,000) 18 Incremental Cash Flow 27,500 19 Incremental Cash Flow 30,000 20 Incremental Cash Flow 32,500 21 Incremental Cash Flow 35,000 22 Incremental Cash Flow 37,500 23 24 For Asset Manager Use: 25 Discount Rate NPVB C D E F G H 1 Strategic Capital Partners 2 Capital Project Request 4 Hotel Marriott Tapitio Pass 5 GM Hugo Gryll 7 Project Name Install automated parking gates Project Description: 9 This project will install automated parking gates at the two entrances to our parking lot. The office park that surrounds the hotel has continued to grow, and non-guests are frequently using our parking facilities. We have analyized paid parking within our competitive set, and 3 of our 5 competitive hotels currently charge for parking. We have received Franchisor approval to begin charging for parking. 10 Proforma Assumptions: The proforma assumes the gates will be installed in 3 days. Revenue assumptions are based on pricing competitively 11 with our competitors who currently charge for parking, and based on our average overnight vehicle counts for past 2 years. This amount has also been discounted by 20% to account for potential disputes and potential inclusion of no cost parking for certain groups. 12 13 Risk Moderate 15 Cash Flow Proforma 18 Period Amount 17 Capital Investment (65,000) 18 Incremental Cash Flow 15,000 19 Incremental Cash Flow 17,500 20 Incremental Cash Flow 20,000 21 Incremental Cash Flow 22,500 22 Incremental Cash Flow 25,000 23 24 For Asset Manager Use: 25 Discount Rate 28 NPV 27B C D E F G H 1 Strategic Capital Partners 2 Capital Project Request A Hotel Marriott Tapitio Pass 5 GM Hugo Gryll B 7 Project Name Upgrade Guest Room Locking System Project Description: This project will install the Franchisor approved guest room locking system and will allow guests to use their 9 smartphones to bypass the front desk and unlock their doors. The Franchisor has tested this system in 250 hotels for the past 2 years and is scheduled to rollout globally within the next 3 years. This upgrade will be a mandatory brand standard beginning in 4 years, however there are incentives being given by the locking system vendor to install earlier. Based on the hotel results for those hotels piloting the system, they have been able to reduce front desk guest service agent man hours by 40%. The system is enormously popular with guests. 10 Proforma Assumptions: 11 The system will take 2 weeks to install and will be done by floor. We do not anticipate having any guest rooms out of service during the conversion. We will be taking advantage of the vendor preferred pricing and are assuming the 40% staffing reduction which has been achieved by the pilot hotels. We are assigning this project a low risk based on the Franchisor experience in the pilot hotels. 12 13 Risk LOW 14 15 Cash Flow Proforma Period Amount 17 Capital Investment (155,000) 18 Incremental Cash Flow 65,000 19 Incremental Cash Flow 66,950 20 Incremental Cash Flow S 68,959 21 Incremental Cash Flow S 71,027 22 Incremental Cash Flow 73,158 23 24 For Asset Manager Use: 25 Discount Rate 28 NPV 37A B C D E F G H Strategic Capital Partners 2 Capital Project Request 3 4 Hotel Marriott Tapitio Pass 5 GM Hugo Gryll 7 Project Name Convert Bar to Meeting Space Project Description: This project will convert our existing "high energy" bar to meeting space. The popularity of the bar has eroded in recent years following the opening of several other clubs nearby. The cost of live 9 entertainment and the security and liability concerns have also continued to rise. This plan will transition the 3,500 square feet into a multi-use meeting room. The space is adjacent to the lobby and has a wall of windows overlooking the pool area. 10 Proforma Assumptions: The proforma assumes a 3 month construction period, a 20% capture of the bar revenue in the lobby bar (this is based on our observation of how many in-house guests were utilizing the bar during the 11 past year), and meeting room revenue based on our historical 3 year average per square foot for the other meeting space in the hotel. Based on planner comments, we feel this space will be in high demand. 12 13 Risk Low 14 15 Cash Flow Proforma 16 Period Amount 17 Capital Investment (127,500) 18 Incremental Cash Flow 35,000 19 Incremental Cash Flow 37,500 20 Incremental Cash Flow 40,000 21 Incremental Cash Flow 42,500 22 Incremental Cash Flow 45,000 23 24 For Asset Manager Use: 25 Discount Rate 28 NPV