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Super 8 Motel Guelph Case Solution & Answer

Super 8 Motel Guelph Case Solution

Introduction

Mr. Ismail, a homeowner of the hotel and general administrator of the 36-room Super 8 hotel located in Guelph, Ontario, has been granted $ 2.9 million for the hotel. After heading to the hotel for nearly two Mr. Ismail and his family experienced the choice to either sell or keep operating the hotel. If they opt to sell the hotel; Ismail would be required to decide whether the $ 2.9 m offer is a reasonable sale price for their hotel. The choice needs to be made when there is crucial variability in the domestic market. Recently opened hotels in your region will increase the distribution of accessible rooms by more than 70% over the next two years. This crucial increase in the distribution of available rooms could have a crucial impact on the level of comfort and rooms and, as a result, on the sale and sales run of the Super 8 hotel. Like many recognized businesses, a hotel’s financial disclosure shows personal and strategy problems (e.g. over exceed of salaries, rewards, and administrative charges) that make it difficult to know the exact revenue and cash movement directly related to the hotel’s performance. Also, the sale of this possession could affect the cost of Dean’s nearest building. Dean has 14 days to decide whether to accept a $2.9 million offer for a hotel or not, to keep the hotel and future cash movement operated by the hotel.

How much do you estimate how important a motel is? Is an offer of $ 2.9 m at the fair sale price for this place?

Based on my calculation the loss is coming in the sense that the offer price which they are offering of $ 2.9m is higher than the current sum of PV (DCF Value: Super 8 Motel), which is $14,715,356, therefore by subtracting 2.9 million from $14,715,356, showing the net loss of ($11,815,356). Therefore I would suggest the family to not sell the hotel. And if the offer price is equivalent to the PV (DCF Value: Super 8 Motel), then the family could think of selling the hotel. But right now I can clearly say that $2.9million is not a fair selling price for the property of the family.

Given what you know about the Guelph market, what degree of certainty do you have in any forecast completed for the Super 8 Motel – Guelph? Why?

Dean and his family were faced with the decision to sell or keep the hotel. If they were going to sell a hotel, Dean would have to come up with a decision whether the $ 2.9 million offer would be a good sale. Selection should be made in the nearing market where a good percent of variability connects. The local domain will increase the flow of accessible rooms by more than 60 percent over the coming 2 y, with new uncertainty organized. This increase in the series of available rooms may have a remarkable impact on the living room and living quality, therefore, on the sales and sales movement of the Super 8 Motel.  As I have assumed 3% growth on Sales, because I’m certain that the consumers would be aware of their services, therefore it would affect their sales as well as their cash flows as well in the future. And constant unpredictability of the family regarding the hotel’s sell can cause serious loss in currency as per the forecasting, so the feasible option for the firm is to continue its operations………………

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