Sheraton Hotel Redding At Sundial Bridge - Redding Record ...

The comparables illustrated rooms expense ranging between 18.9% and 30.2% of
rooms revenue; on a per-occupied-room basis, the range was between $25.34 and
$36.01. We have projected rooms expense for the subject at 23.6% of
departmental revenue in the first year (or $30.96 per occupied room), stabilizing
at 21.0% in 2016/17 (or $32.21 per occupied room).
Food and beverage expenses will consist of items necessary for the primary
operation of a hotel's restaurant and banquet facilities. The comparables illustrate
food and beverage expense ranging between 53.3% and 88.0% of food and
beverage revenue. We have projected food and beverage expense for the subject at
95.2% of departmental revenue in the first year, stabilizing at a ratio of 73.0% in
2016/17.
Telephone expense for the comparables ranged from 69.2% and 295.1% of
telephone revenue. We have projected a stabilized expense ratio of 150.0% in
2016/17.
Other income expense consists of costs associated with other income and is
dependent on the nature of the revenue. The comparables illustrated other income
expense ranging between 32.0% and 63.7% of other income. We have projected a
stabilized expense ratio of 48.0% in 2016/17.
Administrative and general expense for the comparable operations indicates a
range from 6.8% to 10.6% of total revenue, or $2,951 to $4,991 per available
room. In the first projection year, we have projected administrative and general
expense for the proposed subject property to be $3,912 per available room, or
9.5% of total revenue. By the 2016/17 stabilized year, these amounts change to
$4,640 per available room and 8.0% of total revenue.
Marketing expense for the comparable operations indicate a range from 3.9% to
10.1% of total revenue, or $2,067 to $4,680 per available room. Considering the
proposed subject property’s location in the Redding area and its need to draw
demand from other destinations, marketing expense has been forecast at $1,750
per available room, or 4.3% of total revenue in the first year. By the 2016/17
stabilized year, these amounts change to $2,076 per available room and 3.6% of
total revenue.
As previously discussed, the subject is expected to be franchised under the
Sheraton Hotel brand. Costs associated with this franchise are summarized in the
introductory chapter in this report.
Property operations and maintenance expense for the comparable operations
indicate a range from 3.3% to 4.6% of total revenue, or $1,549 to $2,573 per
February-2011 Income Capitalization Approach
Sheraton Hotel Redding At Sundial Bridge – Redding, California 78