Cash Flow Imrovement Recommendation Improve Revpar Index by 2 index points within the next year. Discussion The property is currently underperforming the competitive set. The metrics are given below. The hotel has recently completed a full renovation and feels strongly that they will be able to leverage their new product for both pricing and attracting new group business. Relevant Data Steps: Available Rooms 350 1. Calculate the occupancy percentage if the INDEX were to increase by 2 points. 2. Calculate the number of new room nights based on number 1. above. Hotel Market Index 3. Multiply the number of new room nights by the CURRENT ADR. Occupancy 75.0% 82.0% 91.5 4. Multiply the new revenue by the profit flow through % ADR $187.50 $193.00 97.2 RevPar $140.63 $158.26 88.9 1. Calculate the ADR if the INDEX were to increas by 2 points. 2. Multiply ALL room nights (the existing and the new calculated above) by the change in ADR. Increases in occupancy will flow through to profit at 77% 3. Multiply this new revenue by the flow through % on ADR. Increase in Occupied Rooms 1. Calculate the total improvement in profit based on these two changes. Increase in Revenue