Dreschler Hotel Consultation

1636 words 7 pages
Dreschler Hotel Consultation

December 12, 2010

HTT230 University of Phoenix

Dreschler Hotel

Trend Analysis
I have reviewed the trend analysis for the Dreschler Hotel and competing hotels and find that in comparison to the competing market, Dreschler is well within the numbers on average. Occupancy rate as compared with like hotels appears to be almost par with an average of 99.3 index for the last six month period of 2005. This is stating that on average Dreschler is almost at the same rate of occupancy as other competing hotels. The average daily room rate comes out to a 100.8 index which is stating that the rate being charged daily is at or above what other hotels in this competing industry are charging. The same with
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Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets (http://www.sba.gov). These types of loans are easily obtained since many banks in America participate in SBA’s program and structure the loans according the requirements of this program. The SBA shares the risk with the bank if the borrower defaults. The eligibility requirements are fairly broad to accommodate the most diverse variety of small business financing needs (http://www.sba.gov).
To Convert or Not to Convert

A couple of benefits to converting this property to either a timeshare, condominium, or mixed-use property would be a) the immediate cash flow available up front from the rooms being purchased by timeshare holders; and b) therefore the owner does not have to wait for the project to generate a return on investment. Timeshare would be nice in that all rooms would hopefully be sold and utilized throughout the year. The length of time that someone holds a share for can be up to 30 years. The condominium aspect is slightly different in that the investor does not actually use the room but hopes to make an return on his investment in that room. This can pose a problem if there is not much activity in that investor’s room.
A mixed use set-up would probably be the most beneficial of the three