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Statement of Estimated Annual Operating Results Introduction
On the basis of management's best estimate, we have prepared the Statements of Estimated Annual Operating Results which we believe can be generated by the operation of a facility of the type and calibre proposed. We are of the opinion that sufficient present and potential support for a 152 guest room hotel is available. 200 guest rooms may be possible, but we will use 1
In this section we provide a 10 year pro forma of estimated income and expenses. The statement, expressed in current value dollars, reflect annual operating results at a stabilized occupancy level which we estimate to be 55% per cent. They form the basis for our estimates of income and expense in the initial years of operation.
In addition, to assist you in evaluating your project on a short-term basis for internal management purposes and to enable you to prepare cash flow statements for the short-term period, we have prepared projections of estimated income and expenses for the 152-guest room hotel reflecting its first 10 full years of operation.
Since these estimates are based upon assumptions about circumstances and events that have not yet transpired, they are subject to variations that may arise as the future operations and related factors actually occur. Accordingly, we cannot provide any assurances that the estimates will be representative of the results that will actually be obtained during the initial 10 years of operation.
The 10 year statement of estimated income and expenses is based on assumptions which reflect management's best estimate of the results of operations as well as current and local conditions. The assumptions used in devleoping the accompanying estimates of income and expenses were' selected by us from a wide range of varying potentials of sales, operating costs, expenses, and other key variables that may bear upon the outcome of the plans and objectives of the prospective enterprise. In selecting the specific factors used in preparing these estimates, careful consideration was given to those that appeared to have a more likely degree of provability. For purposes of this statement, we have used the year 1987 as the first complete year of operation of the proposed hotel.
Rooms Department
Rooms revenue for a representative year was computed in accordance with the estimated annual average rate of $65.00 per occupied room per day, expressed in 1985 dollars.