02-25-1999 - Laserfiche WebLink

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IForecast of Future Performance i I Our review of the original 10 year forecast of revenues and expenses found some areas that were modified or updated. The most significant issue is seen in the separation of the hotel revenues/expenses from the existing business. The previous I direction had been to simulate the financial expectations of the project as a hybrid full service hotel with rooms, food, beverage, bowling and other income. At the request of Mr. Hall was have treated the hotel as an independent entity (limited service hotel) in Iour financial forecast. . . While the forecast of revenues and expenses show only the hotel, we remind the J reader of this update that the existing Mermaid business base will add to the attractiveness of the project. I The other change that will effect our forecast is seen in the number of guest rooms of the Americlnn. The hotel currently is planned with 105 guest rooms, not the original 135. This reduction in guest rooms called for a change in the customer. mix . The two I group segments will not be expected to capture the higher percentages of annual business that they were originally forecast with. i With our knowledge of the market, the project and lodging situation we prepared a five year forecast of revenues and expenses for the subject project. Our update includes a review of the hotels ability to achieve market penetration and room rates by segment. • IWith all of the conclusions combined we estimate that the new Americlnn will achieve the following financial results: i IUPDATED FINANCIAL FORECAST-105 GUEST ROOMS Occupancy ADR Room Revenue Total Revenue - Net Operating Income Year 1 - 64.0% $58.80 $ 1,437,341 $ 1,535,453 $396,620 Year 2 67.0 % $61.50 $ 1,579,102 $ 1,687,028 $457,361 Year 3 69.0 % . $64.00 . $ 1,692,432 $ 1,808,787 .$518,652 1 Year 4 71.0 % Year 5 72.0 % $66.00 $ 1,795,910 $ 1,918,358 $557,380 $67.00 $ 1,848,798 $ 1,975,730 $575,859 Prepared by: Marketing & Development Associates IThis supplement to the original report represents our best judgment and professional opinion based on the assignment. Our report may be regarded as objective and iI ndependent by any prospective investors or lenders who read this report. The content of this report will focus on the changes that occurred regarding the lodging trends of the market area. We have based our conclusions on the sum of the data I • that we have reviewed, not just on the data that is included in this report. I