Using the information given below and with the aid of data discussed in class, calculate a rooms supportable estimate and a three-year financial projection to the point of income before fixed charges for the following hypothetical lodging development project. Assume the property will take two years to build, and its first full operational year is 2017 and all work must be shown on how each calculation was determined.

This assignment must be completed and uploaded to Canvas no later than 5pm on Monday, December 4, 2017.

Competing Lodging Demand Profile Data:

Property No. of Rooms A.A.O. Market Segmentation

A 340 71% C/B=40%, G/C/C=30%, T/T=30%

B 200 63% C/B=60%, G/C/C=20%, T/T=20%

C 250 80% C/B=50%, G/C/C=10%, T/T=40%

D 225 79% C/B=30%, G/C/C=50%, T/T=20%

Com/Bus. Growth Categories Percent Growth

Comm. Leasing Activity 6

Population 2

Labor and Employment 2

Transportation 4

Retail sales 1

Eating & Drinking Sales 3

Group/Conf./Convention Growth Categories:

Conference Growth 3

Convention Growth 5

Tourist/Transient Growth Categories:

Local Attraction Attendance 7

Local highway traffic 1

Interstate traffic growth 3

Financial Projection Data:

Number of rooms in proposed property: 250

Average rate in todays dollars for all three years: $85.00

First through third year projected occupancy: 67%

Revenue Percentage Assumptions:

Food Revenue:

One restaurant with 175 seats, open all year, one breakfast meal service with an average check for $9.00 and a turn-over rate of 1.3. There is no room service.

Beverage Revenue:

30% of food revenue

Telecommunications Revenue:

$2.50 per occupied room.

Other Revenue:

5% of room revenue.

Expense Percentage Assumptions:

Rooms:

Room Pay/Rel 15

Other 5

Food & Beverage:

Food Cost 32

Bev. Cost 21

Pay/Rel 19

Other 5

Telephone Expenses:

Assume telecommunications expenses are 25 percent greater than telephone revenue.

Undistributed Operating Expense Percentages:

A&G 5

Marketing 3

P.O.M. 4

Energy 3

Mgt. Fee 5