Marriot Hotel, a public listed company owns a chain of hotels and resorts throughout Malaysia. The company has

Question

Marriot Hotel, a public listed company owns a chain of hotels and resorts throughout Malaysia. The company has appointed you to value one of its hotels for the purpose of securities commission. The tenure is freehold, built on a 20,000 sq. metre site. The building is of high-quality construction and finishes, with stylish designed rooms and luxurious suites. Facilities provided include a swimming pool, fitness centre, tennis court and spa. The Hotel Management has furnished you the following information: Room Type No. of rooms Room rate Superior 200 RM200 Deluxe 100 RM300 Suite 15 RM 600 Average occupancy for the past three years is as follows: Weekends: 85% Weekdays: 53% An analysis of trading operations for the past three years revealed the following: Other income Food and beverage 40% of room revenue Telephone and fax RM 60,000 per annum Banquet hall RM 380,000 per annum Annual Purchase Pillow and mattress RM 200,000 per annum Furniture RM 500,000 per annum Bed sheets RM 100,000

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a. Gross Income of the Hotel: Particulars Amount(Rm) Amount(Rm) Revenue Room Revenue(i+ii)(6,983,600+10,928,100) 17,911,700 Food and Beverage 40% of 17,911,700 7,164,680 Telephone & Fax 60,000 Banquet hall 380,000 Total Revenue 25,516,380 Less: Purchases Pillow and mattress 200,000 Furniture 500,000 Bedsheets 100,000 Consumables 800,000 Gross Income (Revenue-Consumables) 24,716,380 Workings: (i) Computation of income from Room Renting for Weekends: Room Type (a).No of Rooms (b)*No of days (c).Occupancy Rate (d). Total Rooms rent on Weekends (axbxc) (e) Room Rate (f) Room Rent on weekends (d*e) Superior 200 104 85% 17,680 200 3,536,000 Deluxe 100 104 85% 8,840 300 2,652,000 Suite 15 104 85% 1,326 600 795,600 Total 6,983,600 (ii)Computation of income from Room Renting for Weekdays: Room Type (a).No of Rooms (b)*No of days (c).Occupancy Rate (d). Total Rooms rent on Weekdays (axbxc) (e) Room Rate (f) Room Rent on weekdays (d*e) Superior 200 261 53% 27,666 200 5,533,200 Deluxe 100 261 53% 13,833 300 4,149,900 Suite 15 261 53% 2,075 600 1,245,000 Total 10,928,100 *The year has 365 days : Weekdays =261 days Weekend days=52 *2 (Saturday & Sunday)=104 days. b.5 Operating expenditure of the hotel. Food & Beverage direct ops cost is maintained between 30–40% of F&B Revenue. (apart from direct ingredients, it includes hiring equipment, fuel, music & entertainment, cleaning material/agents, etc) Manpower & Welfare cost is maintained between 18–22% of Total Revenue Room division

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Marriot Hotel, a public listed company owns a chain of hotels and resorts throughout Malaysia

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Archived Solution

Particulars	Amount(Rm)	Amount(Rm)
Revenue
Room Revenue(i+ii)(6,983,600+10,928,100)	17,911,700
Food and Beverage 40% of 17,911,700	7,164,680
Telephone & Fax	60,000
Banquet hall	380,000
Total Revenue		25,516,380
Less: Purchases
Pillow and mattress	200,000
Furniture	500,000
Bedsheets	100,000
Consumables		800,000
Gross Income (Revenue-Consumables)		24,716,380

Room Type	(a).No of Rooms	*(b)No of days**	(c).Occupancy Rate	(d). Total Rooms rent on Weekends (axbxc)	(e) Room Rate	(f) Room Rent on weekends *(de)**
Superior	200	104	85%	17,680	200	3,536,000
Deluxe	100	104	85%	8,840	300	2,652,000
Suite	15	104	85%	1,326	600	795,600
Total						6,983,600