CapitalPrioritizationCaseStudyData.xlsx

Project 1

Strategic Capital Partners
Capital Project Request
Hotel	Marriott Tapitio Pass
GM	Hugo Gryll
Project Name	Convert Bar to Meeting Space
Project Description:This project will convert our existing "high energy" bar to meeting space. The popularity of the bar has eroded in recent years following the opening of several other clubs nearby. The cost of live entertainment and the security and liability concerns have also continued to rise. This plan will transition the 3,500 square feet into a multi-use meeting room. The space is adjacent to the lobby and has a wall of windows overlooking the pool area.
Proforma Assumptions:The proforma assumes a 3 month construction period, a 20% capture of the bar revenue in the lobby bar (this is based on our observation of how many in-house guests were utilizing the bar during the past year), and meeting room revenue based on our historical 3 year average per square foot for the other meeting space in the hotel. Based on planner comments, we feel this space will be in high demand.
Risk	Low
Cash Flow Proforma
	Period	Amount
Capital Investment	0	$ (127,500)
Incremental Cash Flow	1	$ 35,000
Incremental Cash Flow	2	$ 37,500
Incremental Cash Flow	3	$ 40,000
Incremental Cash Flow	4	$ 42,500
Incremental Cash Flow	5	$ 45,000
For Asset Manager Use:
Discount Rate
NPV

Project 2

Strategic Capital Partners
Capital Project Request
Hotel	Marriott Tapitio Pass
GM	Hugo Gryll
Project Name	Build Market adjacent to the Front Desk
Project Description: Franchisor has approved a new "grab and go" market place as a replacement for both a gift shop and room service. This is based on a long term study of guest preferences, and the fact that room service looses considerable money in every one of the hotels. Our project will utilize a portion of the gift shop space adjacent to the front desk, and the space will be cashiered by the front desk associates. The remaining space form the gift shop will be repurposed to a business/shipping center that will be leased. A local operator has signed a letter of intent to lease space for 10 years.
Proforma Assumptions:Our proforma assumptions include the labor and other expense savings from the elimination of room service, the lease income from the existing gift shop and the incremental sales and profit of the market based on the data supplied from the Franchisor. This data is based on results from 750 existing units, and is sized based on our occupancy.
Risk	Low
Cash Flow Proforma
	Period	Amount
Capital Investment	0	$ (65,000)
Incremental Cash Flow	1	$ 27,500
Incremental Cash Flow	2	$ 30,000
Incremental Cash Flow	3	$ 32,500
Incremental Cash Flow	4	$ 35,000
Incremental Cash Flow	5	$ 37,500
For Asset Manager Use:
Discount Rate
NPV

Project 3

Strategic Capital Partners
Capital Project Request
Hotel	Marriott Tapitio Pass
GM	Hugo Gryll
Project Name	Install automated parking gates
Project Description:This project will install automated parking gates at the two entrances to our parking lot. The office park that surrounmds the hotel has continued to grow, and non-guests are frequently using our parking facilities. We have analyized paid parking within our competitive set, and 3 of our 5 competitive hotels currently charge for parking. We have received Franchisor approval to begin charging for parking.
Proforma Assumptions:The proforma assumes the gates will be installed in 3 days. Revenue assumptions are based on pricing competitively with our competitors who currently charge for parking, and based on our average overnight vehicle counts for past 2 years. This amount has also been discounted by 20% to account for potential disputes and potential inclusion of no cost parking for certain groups.
Risk	Moderate
Cash Flow Proforma
	Period	Amount
Capital Investment	0	$ (65,000)
Incremental Cash Flow	1	$ 15,000
Incremental Cash Flow	2	$ 17,500
Incremental Cash Flow	3	$ 20,000
Incremental Cash Flow	4	$ 22,500
Incremental Cash Flow	5	$ 25,000
For Asset Manager Use:
Discount Rate
NPV

Project 4

Strategic Capital Partners
Capital Project Request
Hotel	Marriott Tapitio Pass
GM	Hugo Gryll
Project Name	Upgrade Guest Room Locking System
Project Description:This project will install the Franchisor approved guest room locking system and will allow guests to use their smartphones to bypass the front desk and unlock their doors. The Franchisor has tested this system in 250 hotels for the past 2 years and is scheduled to rollout globally within the next 3 years. This upgrade will be a mandatory brand standard beginning in 4 years, however there are incentives being given by the locking system vendor to install earlier. Based on the hotel results for those hotels piloting the system, they have been able to reduce front desk guest service agent man hours by 40%. The system is enormously popular with guests.
Proforma Assumptions:The system will take 2 weeks to install and will be done by floor. We do not anticipate having any guest rooms out of service during the conversion. We will be taking advantage of the vendor preferred pricing and are assuming the 40% staffing reduction which has been achieved by the pilot hotels. We are assigning this project a low risk based on the Franchisor experience in the pilot hotels.
Risk	Low
Cash Flow Proforma
	Period	Amount
Capital Investment	0	$ (155,000)
Incremental Cash Flow	1	$ 65,000
Incremental Cash Flow	2	$ 66,950
Incremental Cash Flow	3	$ 68,959
Incremental Cash Flow	4	$ 71,027
Incremental Cash Flow	5	$ 73,158
For Asset Manager Use:
Discount Rate
NPV