We are missing CAPITAL BUDGET ANALYSIS (Need to compute the Payback Period of Conference room, Helath Club and Leisure Club)

5. Capital Budget/ Expansion Analysis

With your strategic goals and position statement in mind, select 3 items from the "extra facilities", or "EMS" decision tab on HOTS. Perform a Payback Period analysis for each of the items selected and discuss why you would or would not choose to invest in the facilities you've analyzed.

Mission Statement We strive to provide our guests with high quality service and affordable accommodation while creating an environmental-conscious_organization that meets the demands and challenges of the fast-changing industry. Positioning Statement For local and international guests who are looking for affordable accommodation without compromising quality, our hotel can provide excellent yet simplified amenities and services that strive to meet every customer's needs. We believe that bringing comfort and modesty can make every staycation matter and memorable. We have a strong focus on enhancing the experience of our guests in giving them the perfect balance of relaxation and enjoyment through our clean rooms, great food and drinks, and friendly staff. Goals: 1. Achieve a 4-Star rating by Year 5 a. Upgrade some rooms to suites to cater to upscale clients b. Build Health Club and Leisure Club - spa, sauna, massage services c. Make more sustainability and environmental-friendly practices -waste reduction, energy-saving options, source local 2. Achieve Net Income of $300,000 by Year 5 a. Increase rooms by 25 (total of 150 rooms) b. Develop advertising strategies to boost revenue. c. Upsell and Cross sell amenities and other services 3. Raise Average Occupancy to 80% by Year 5 a. Develop a Loyalty Program b. Offer packages and promotions c. Advertise and work around major events in the community4. Achieve at least 80% overall guest satisfaction by Year 5 a. Acknowledge and respond to feedback and reviews. b. Offer complimentary services c. Take care of staff to limit fast turnovers and avoid staff shortage. Sufficient staffing equals efficient delivery of services. 5. Set up extra facilities to add value to rooms and services a. Build Conference Rooms and Facilities b. Offer Internet Services c. Create additional parking space Key Area Projections - Table KEY ROOMS GROSS PERFORMANCE OPERATING NET RETURN ON OWNER'S TURNOVER ROOM RATE PROJECTIONS REVENUE INCOME occ % STAFF MARKET AVERAGE EQUITY SHARE PROFIT ($) YEAR 0 $1,316,923.65 -794,436 -$794,436 -15.1% 33.2% 68.5% 4.05% $86.94 YEAR 1 $1,896,406.41 $31,000.80 $21,700.56 4% 39.84% 55% 4.86% $104.33 Occupancy Rate projected increase is 20% *Rooms Rate projected increase is 20% Income Statement for Year 1 Revenue Rooms 1,896,406.41 60% F&B 1,232,664.17 39% Other Operated Department 31,606.77 1% Total Revenue 3,160,677.35 100% Expenses Rooms 474, 101.60 25% F&B 616,332.08 50% Other Operated Department 20,544.40 65%Administrative 81 General Sales & Marketing Maintenance {up by 15% from Y0) Utilities Property Taxes 6 Insurance Bank Charges Interest Depreciation Total Expenses Income Before Taxes Taxes 30% Net. Income Capital Budget;l Expansion Analysis 316,057.73 189,640.64 515262.10 216,141 199,940 10,890 21,398 549,359 3,129,676.55 31 ,000.80 9300.24 21,700.56 10% 5%