Problem (Worth 10 points)

4 Step Process for Feasibility Study

Based on the following information, use the 4-step process described in the text to perform a supply and demand analysis for a proposed new hotel. Use 60% as the normal occupancy and extend for 4 years. When calculating rooms, round up to the nearest whole room number (hence 65.4 rooms becomes 66 rooms). Round occupancy rates to the nearest whole percentage (.824 would be 82% and .796 would be 80%). For growth rate, go out 1 decimal point rounded (.03467 would be 3.5% and .0561 would be 5.6%).

Competitive Hotels (Existing)

Hotel # Rooms Occupancy

#1 110 80%

#2 90 90%

#3 125 52%

#4 175 72%

Demand sources and growth rates are business traveler 4%, vacation traveler 2% and other travelers 1%. The visitor base breakdown is 40% business, 45% vacation and 15% other. Your work should be presented in a professional manner consistent with business reports that your client could use to obtain funding from a bank (for example).