What does change do to the sample inn projected occupancy

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Problem 1: Consider what happens to the market valuation component if we consider changes in the debt capital market. The Loan-to-Value ratio was originally set at 70%, with a 5.5% interest rate amortized over 25 years. Now, assume the Sample Inn can secure a mortgage with a Loan-to-Value ratio of only 65%, with a 5.75% interest rate amortized over 20 years. Accounting for these changes, what does this do to the market valuation for the Sample Inn? What conclusions can you draw about the relationship between the debt capital market and hotel valuations?

Problem 2: Look at the Additions to Supply sheet of the RNAADR program. Notice that the Assumed Compound Supply Growth in cell D15 is set to 0%. Thus, long-term supply is not expected to grow in the market. What is the effect of this on the Sample Inn's projected occupancy?

Problem 3: Now change the Assumed Compound Supply Growth to 0.42%. What does this change do to the Sample Inn's projected occupancy and to the market projected occupancy? Given these changes, how would you characterize the relationship between the rate of supply growth and occupancy projections?

Reference no: EM132892278

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