RESORT HOTEL FIVE-YEAR PROFORMA Projections of the annual operating results for the proposed Harbor Vista Hotel, a member of the Curio Collection by Hilton Hotels Worldwide, were prepared for five years, 2018 through 2022 and presented in U.S. Dollars. The projections are based on the results of operations in comparable facilities and our calculations regarding the environment in which the proposed hotel would operate. The bases found on the following pages were prepared in constant dollars, July 2015, with slight inflation increases noted in the Proforma Schedules. The PKF Hospitality Research Caribbean Trends in the Hotel Industry- USA Edition2014 Report for Resort Hotels, is positioned as a benchmark for the Proforma of the proposed hotel. The hotel is scheduled to open during 2017, thus the first full year will be 2018. The Proforma for 2018 was calculated by line-item classifications of all types of Revenues, Payroll and Other Expenses in each Department. These Schedules have been prepared according to the guidelines set forth in the “Uniform System of Accounts for the Lodging Industry, Eleventh Revision Edition.” Subsequent years of the Proforma were adjusted to inflation and normal usage factors of a luxury hotel. The accompanying projections are based on estimates and assumptions developed in connection with the Feasibility Study. However, some assumptions inevitably will not materialize, and unanticipated events and circumstances may occur, therefore, actual results achieved during the projection period will vary from the projections and the variations may be material.
Charlotte Amalie, Saint Thomas, United States Virgin Islands
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Saint Thomas, Virgin Islands Proforma Year One
200 Rooms
Available Suite Nights Occupancy Occupied Suite Nights Average Daily Rate RevPar Revenues Rooms Food Beverage Other Food & Beverage Retail Center Other Hotel Resort Fee $25/Occ. Room plus $5/Year Leases Spa 2,500 sq.ft. @ $20/sq.ft. Total Revenue Departmental Profit Rooms Telecommunications Food & Beverage Department Retail Center Other Resort Fee Leased Spa Total Departmental (House) Profit Deductions From Income Administrative & General Sales & Marketing Hilton Honors Guest Services Marketing Fee Room Revenue x 2.0% Franchise Fee Room Revenue x 5.5% Repairs & Maintenance Utilities Total Deductions From Income Gross Operating Profit Fixed Costs: Management Fee Real Estate Taxes – Allowance Insurance – Allowance Replacement Reserves Total Fixed Costs Net Operating Income Before Debt Service
Full Year 73,000 75.0% 54,750 375.00 281.25
Ratio %
Schedule 1 of 10 Full Year Dollars Per Available Room
20,531,250 3,115,400 937,000 906,400 438,000 355,880 1,368,750 50,000 27,702,680
74.1% 11.2% 3.4% 3.3% 1.6% 1.3% 4.9% 0.2% 100.0%
281.25 42.68 12.84 12.42 6.00 4.88 18.75 0.68 379.49
16,307,470 (60,230) 1,439,600 154,420 191,630 1,368,750 50,000 19,451,640
79.4% 0.0% 29.0% 35.3% 53.8% 100.0% 100.0% 70.2%
223.39 (0.83) 19.72 0.35 2.63 18.75 0.68 264.70
1,813,930 957,800 691,370 410,630 1,129,220 782,740 1,326,000 7,111,690 12,339,950
6.5% 3.5% 2.5% 1.5% 4.1% 2.8% 4.8% 25.7% 44.5%
24.85 13.12 9.47 5.63 15.47 10.72 18.16 97.42 167.28
831,080 300,000 250,000 282,570 1,663,650 10,676,300
3.0% 1.1% 0.9% 1.0% 6.0% 38.5%
11.38 4.11 3.42 3.87 22.79 144.49
Source: Interim Hospitality Consultants
Charlotte Amalie, Saint Thomas, United States Virgin Islands
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Saint Thomas, Virgin Islands Proforma Year One Rooms Department Rooms Revenue Payroll Front Office Front Office Manager Front Desk Clerks/Reserv. Concierge Drivers Valet Parking Attendants Bell Staff/Doorman Night Auditor Staff Subtotal Front Office Wages Housekeeping Executive Housekeeper Inspectress Staff Houseman Staff Laundry Staff Housekeepers
F
P
Per Unit of
1 15 4 4 4 8 3 39
2 10 4 4 4 4 2 30
Annual Salary Hourly Rate Daily x 8 hr x Daily x 8 hr x Daily x 8 hr x Daily x 8 hr x Daily x 8 hr x
1 4 6 6 15
1 2 2 2 12
Salary Daily x 8 hr x Daily x 8 hr x Daily x 8 hr x Occupied Suites/year Suites Cleaned/Maid/day Housekeeping Days/year Housekeeping Hours/year Wage/Hour Housekeeper’s Wages
32 19 Subtotal Housekeeping Wages Total Rooms Department Wage Taxes and Benefits Total Room Department Payroll As Percentage of Room Revenue Other Expenses Cable Television Carpet Cleaning China/Glass/Silver Cleaning Supplies Drapery Hilton Honors Frequent Guest Program Guest Supplies Laundry Supplies Linen Miscellaneous Printing Travel Agent Commission Uniforms Total Other Expenses As Percentage of Room Revenue Rooms Department Profit As Percentage of Room Revenue Per Occupied Room
Schedule 2 of 10 20,531,250 Factor 60,000.00 18.00 10.00 10.00 10.00 10.00 20.00
120,000 748,800 124,800 124,800 124,800 208,000 166,400 1,617,600
60,000.00 12.00 10.00 10.00 54,750 10.0 5,475 43,800
90,000 12,800 145,600 145,600
10.00 438,000 944,000 2,561,600 384,240 2,945,840 14.3%
15.0%
Month Suite/6 mo. Month Occupied Suite Month Room Revenue Occupied Suite Occupied Suite Occupied Suite Month Occupied Suite Occupied Suite Month
3,000.00 10.00 2,000.00 1.25 200.00 0.50% 3.50 2.75 9.00 5,000.00 1.00 1.00 3,000.00
36,000 4,000 24,000 68,440 2,400 102,660 191,630 150,560 492,750 60,000 54,750 54,750 36,000
Charlotte Amalie, Saint Thomas, United States Virgin Islands
1,277,940 6.2% 16,307,470 79.4% $297.85
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Saint Thomas, Virgin Islands Food & Beverage Department Schedule 3 of 10 Number of Rooms: 200 PKF Factor Total Annual Food Department Food Revenue Cost of Food Consumed Less Cost of Employee Meals Net Cost of Food Sales Food Gross Profit Beverage Department Beverage Net Revenue Cost of Beverage Sales Beverage Gross Profit Food and Beverage Department Total Food and Beverage Revenue Net Cost of Food and Beverage Sales Gross Profit on Combined Sales Public Room Retails Other Income Other F&B Revenue Gross Profit & Other Income Departmental Expenses Salaries & Wages Payroll Burden Subtotal Payroll Laundry & Dry Cleaning China, Glassware, Silver, Linen Contract Cleaning Other Subtotal Other Expenses Food & Beverage Departmental Expenses Total Food & Beverage Department Income
% of Revenue
15,577 4,183 262 3,921 11,655
3,115,400 836,600 52,400 784,200 2,331,000
100.0% 26.9% 1.7% 25.2% 74.8%
4,685 1,005 3,680
937,000 201,000 736,000
100.0% 21.5% 78.5%
20,262 4,926 15,336 946 3,586 4,532 19,868
4,052,400 985,200 3,067,200 189,200 717,200 906,400 3,973,600
100.0% 19.9% 61.9% 3.8% 14.5% 100.0% 80.1%
7,785 2,849 12,634 141 197 268 1,430
1,557,000 569,800 2,526,800 28,200 39,400 53,600 286,000
31.4% 11.5% 51.0% 0.6% 0.8% 1.1% 5.8%
12,670 7,198
2,534,000 1,439,600
100.0% 29.0%
Charlotte Amalie, Saint Thomas, United States Virgin Islands
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Saint Thomas, Virgin Islands Proforma Year One Minor Departments Departments
FT
PT
Rate
Schedule 4 of 10 Ratio
Revenue per Occupied Suite
Telecommunications Expense Profit Retail Center Revenue Expense of Goods Wages 2 2 $9 56,160 8,420 Taxes and Benefits 15.0% Profit Other* Revenue Expense Profit Revenue of Valet Cleaning, Meeting Room, FAX, ATM, Vending, etc.
0.00 (1.10) (1.10)
(60,230) (60,230)
100.0%
8.00 4.00
438,000 219,000
100.0% 50.0%
2.82
64,580 154,420
14.7% 35.3%
6.50 (3.00) 3.50
355,880 164,250 191,630
100.0% 46.2% 53.8%
Schedule 5 of 10
Total Hotel Payroll Employees FT PT Rooms Front Office Housekeeping Subtotal Rooms Department Retail Department Food & Beverage Department Administrative and General Administrative Wages Security Payroll Subtotal A&G Department Hilton Honors Complimentary Services Sales & Marketing Repair & Maintenance Grand Total Hotel Payroll Note: Totals may not foot due to rounding
Wages
Taxes and Benefits
Total Payroll
39 32 71 2 30
30 19 49 2 20
1,617,600 944,000 2,561,600 56,160 1,557,000
242,640 141,600 384,240 8,420 569,800
1,860,240 1,085,600 2,945,840 64,580 2,126,800
6.7% 3.9% 10.6% 0.2% 29.6%
8 12 20 0 5 9 137
2 8 12 16 0 8 105
520,000 499,200 1,019,200 145,600 212,000 394,560 5,946,120
78,000 74,880 152,880 21,840 31,800 59,180 1,228,160
598,000 574,080 1,172,080 167,440 243,800 453,740 7,174,280
2.2% 2.1% 4.2% 0.6% 0.9% 1.6% 18.0%
Charlotte Amalie, Saint Thomas, United States Virgin Islands
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Saint Thomas, Virgin Islands Proforma Year One Administrative and General Per Unit of Payroll Manager Assistant Manager Secretary/Accounting Subtotal Admin. Payroll
F 1 2 5 8
Schedule 6 of 10 Factor
P Annual Salary 2 2
100,000 60,000 50,000
100,000 120,000 300,000
Taxes & Benefits
15.0%
78,000
Daily x 12 hr x Taxes & Benefits
15.00 15.0%
499,200 74,800
Salary
598,000 Security Staff
12
8
Subtotal:Security Payroll
12
8
Total Admin. & Gen. Payroll Other Expenses Accounting Fees Audit Fees Bank Charges Computer Expense Credit Card Commission Legal Fees Licenses Miscellaneous Office Expenses Printing Radios, 2-Way Telephone Expenses Trade Association Dues Travel Expenses Uniforms Total Other Expenses Total Administrative and General As Percentage of Total Revenue Per Occupied Room
574,080 1,172,080 Month Unbudgeted Month Month Room Revenue Unbudgeted Annual Month Occupied Suite Occupied Suite Month Occupied Suite Annual Month Month
3,000.00
36,000
200.00 1,000.00 2.0%
2,400 12,000 410,630
2,000.00 0.50 0.75 1,000.00 0.50 2,000.00 1,000.00
5,000 24,000 27,380 41,060 12,000 27,380 8,000 24,000 12,000
Charlotte Amalie, Saint Thomas, United States Virgin Islands
641,850 1,813,930 6.5% 33.13
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Saint Thomas, Virgin Islands Proforma Year One Hilton Honors Complimentary Services F Breakfast 6 am - 11 am, M-F 7 am – 11:30 am, S, S Hostess Social Hour 5 pm - 8 pm, Daily Total Wages Total Payroll Other Expenses Food - Breakfast Food - Social Hour Liquor/Beer/Wine Paper Products Newspapers Seasonal Items Total Other Expenses Complimentary Service
P
Per Unit of
Schedule 7 of 10
Factor
4 4 4
Daily x 6 hr x 5 days Daily x 6 hr x 2 days Daily x 6 hr x 7 days
$ 9.00 $ 9.00 $10.00
4
Daily x 4 hr x 7 days
$10.00
Taxes & Benefits
15.0%
87,360 58,240 145,600 21,840
16
167,440 Per 50.0% Occupied Suite 50.0% Occupied Suite 50.0% Occupied Suite 50.0% Occupied Suite 50.0% Occupied Suite Month
3.50 2.50 3.00 0.50 0.30 1,000.00
191,630 136,880 164,250 2,740 16,430 12,000 523,930 691,370
Per Occupied Room
$12.63
Charlotte Amalie, Saint Thomas, United States Virgin Islands
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Saint Thomas, Virgin Islands Proforma Year One Sales and Marketing Schedule 8 of 10 Per Unit of Payroll Director of Sales Sales Manager Secretary Staff
F 1 2 2
Total Payroll 5 Advertising Billboards Print--Magazine Print--Newspaper In House Television Airport Internet Production Yellow Pages Total Advertising Public Relations Contributions Travel Trade Shows Guest Relations Total Public Relations Promotions Brochures Direct Mail Merchandise Total Promotions Total Sales and Marketing As a percentage of Total Revenue Per Occupied Room
Factor
P Salary Salary Salary Total Wages Tax and Benefits
60,000 40,000 36,000 15.0%
60,000 80,000 72,000 212,000 31,800 243,800
Month Month Month Month Month Month Annual Month
18,000.00
216,000
2,000.00 12,000.00 7,000.00 6,000.00
24,000 144,000 84,000 6,000 474,000
Month Month Four (4) per year Month
4,000.00 8,000.00 9,000.00 3,000.00
48,000 96,000 36,000 36,000 216,000
Pre-Opening Expense Month Month
2,000.00
24,000 24,000 957,800 3.5% 17.49
Curio Hotel National Fees Marketing Fee
Franchise Fee
2.0% 2.0% 2.0% 2.0% 2.0% 5.5% 5.5% 5.5% 5.5% 5.5%
of Room Revenue Year 1 of Room Revenue Year 2 of Room Revenue Year 3 of Room Revenue Year 4 of Room Revenue Year 5 of Room Revenue Year 1 of Room Revenue Year 2 of Room Revenue Year 3 of Room Revenue Year 4 of Room Revenue Year 5
Charlotte Amalie, Saint Thomas, United States Virgin Islands
$ 410,630 $ 438,440 $ 474,210 $ 512,780 $ 544,800 $1,129,220 $1,205,700 $1,304,070 $1,410,150 $1,498,200
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Saint Thomas, Virgin Islands Proforma Year One Utilities Per Unit of Electric Gas Water/Sewer Refuse Total Utilities As a percentage of Total Revenue Per Occupied Room
Occupied Suite Occupied Suite Occupied Suite Month
Schedule 9 of 10
Factor 10.00 8.00 6.00 1,000.00
1,326,000 4.8% 24.22
Repairs and Maintenance Payroll Chief Engineer Part-Time Worker Subtotal Wages
547,500 438,000 328,500 12,000
F 1 8
P 2 Salary 6 Daily x 8 hr x Taxes & Benefits
Total Repair & Maint Payroll 9 8 Other Expenses Electrical Plumbing HVAC Building Suites - Bedrooms Suites – Micro-Fridge Grounds Parking Lot Pest Control Light Bulbs Television/VCP Uniforms Pool/Spa Hotel Vehicles Miscellaneous Total Other Expenses Total Repair & Maintenance Expenses As a percentage to Total Revenues Per Occupied Room
Schedule 10 of 10 60,000 12.00 15.0%
120,000 274,560 394,560 59,180 453,740
Month Month Month Month Month Month Month Annual Month Month Month Month Month Month Month
500.00 500.00 500.00 500.00 500.00 500.00 4,000.00 1,000.00 1,000.00 500.00 500.00 2,000.00 10,000.00 5,000.00
6,000 6,000 6,000 6,000 6,000 6,000 48,000 5,000 12,000 12,000 6,000 6,000 24,000 120,000 60,000
Charlotte Amalie, Saint Thomas, United States Virgin Islands
329,000 782,740 2.8% 14.30
Page H-9
200 Rooms
2018
Five-Year Proforma Saint Thomas, Virgin Islands 2019
Occupancy 75.0% Average Daily Rate 375.00 390.00 RevPar 281.25 300.30 Revenue Rooms 20,531,250 74.1% 21,921,900 Food 3,115,400 11.2% 3,198,480 Beverage 937,000 3.4% 961,990 Other Food and Beverage 906,400 3.3% 930,570 Retail Center 438,000 1.6% 449,680 Other Hotel 355,880 1.3% 365,370 Resort Fee $25/OccRm plus $5/Yr 1,368,750 5.7% 1,686,300 Leased Spa 2,500 sq.ft. @ $20/sq.ft. 50,000 0.1% 55,000 Total Revenues 27,702,680 100.0% 29,569,290 Departmental Profit Rooms 16,307,470 79.4% 17,537,520 Telecommunications (60,230) (61,830) Food and Beverage Department 1,439,600 29.0% 1,477,990 Retail Center 154,420 35.3% 158,540 Other 191,630 53.8% 196,740 Resort Fee 1,368,750 100.0% 1,686,300 Leased Spa 50,000 100.0% 55,000 Total Departmental Profit 19,451,640 70.2% 21,050,260 Deductions from Income Administrative & General 1,813,930 6.5% 1,862,300 Sales & Marketing 957,800 3.5% 983,340 Hilton Honors Guests Services 691,370 2.5% 709,810 Marketing Fee Rm Rev x 2.0% 410,630 1.5% 438,440 Franchise Fee Rm Rev x 5.5% 1,129,220 4.1% 1,205,700 Repair & Maintenance 782,740 2.8% 803,610 Utilities 1,326,000 4.8% 1,361,360 Total Deductions from Income 7,111,690 25.7% 7,364,560 Gross Operating Profit 12,339,950 44.5% 13,685,700 Non-Operating Costs Real Estate Taxes - Allowance 300,000 1.1% 305,000 Management Fee 831,080 3.0% 887,080 Insurance - Allowance 250,000 0.9% 255,000 Replacement Reserves 282,570 1.0% 301,610 Total Non-Operating Costs 1,663,650 6.0% 1,748,690 Net Operating Income Before Debt Service 10,676,300 38.5% 11,937,010 Source: Interim Hospitality Consultants, 850/893-6010 – July 24, 2015
2020
77.0%
2021 80.0%
406.00 324.80
2022 83.0%
422.00 350.26
85.0% 439.00 373.15
74.1% 10.8% 3.3% 3.1% 1.5% 1.2% 5.7% 0.2% 100.0%
23,710,400 3,323,090 999,470 966,830 467,200 379,600 2,044,000 60,000 31,950,590
74.2% 10.4% 3.1% 3.0% 1.5% 1.2% 6.4% 0.2% 100.0%
25,639,030 3,457,160 1,039,790 1,005,830 467,200 394,910 2,430,240 65,000 34,499,160
74.3% 10.0% 3.0% 2.9% 1.4% 1.1% 7.0% 0.2% 100.0%
27,239,950 3,530,790 1,061,930 1,027,250 496,400 403,330 2,792,250 70,000 36,621,900
74.4% 9.6% 2.9% 2.8% 1.4% 1.1% 7.6% 0.2% 100.0%
80.0%
81.0%
29.0% 36.7% 53.8% 100.0% 100.0% 73.7%
22,609,160 (67,560) 1,631,550 175,010 217,180 2,792,250 70,000 27,427,590
83.0%
29.0% 35.3% 53.8% 100.0% 100.0% 72.5%
21,024,000 (65,590) 1,597,520 171,360 212,650 2,430,240 65,000 25,435,180
82.0%
29.0% 35.3% 53.8% 100.0% 100.0% 71.2%
19,205,420 (63,680) 1,535,570 164,710 204,400 2,044,000 60,000 23,150,420
29.0% 35.3% 53.8% 100.0% 100.0% 74.9%
6.3% 3.3% 2.4% 1.5% 4.1% 2.7% 4.6% 24.9% 46.3%
1,934,860 1,021,650 737,460 474,210 1,304,070 834,920 1,414,400 7,721,570 15,428,850
6.1% 3.2% 2.3% 1.5% 4.1% 2.6% 4.4% 24.2% 48.3%
2,012,920 1,062,870 767,210 512,780 1,410,150 868,610 1,471,460 8,106,000 17,329,180
5.8% 3.1% 2.2% 1.5% 4.1% 2.5% 4.3% 23.5% 50.2%
2,055,790 1,085,510 783,550 544,800 1,498,200 887,110 1,502,800 8,357,760 19,069,830
5.6% 3.0% 2.1% 1.5% 4.1% 2.4% 4.1% 22.8% 52.1%
1.0% 3.0% 0.9% 1.0% 5.9%
310,000 958,520 260,000 325,900 1,854,420
1.0% 3.0% 0.8% 1.0% 5.8%
315,000 1,034,970 265,000 351,890 1,966,860
0.9% 3.0% 0.8% 1.0% 5.7%
320,000 1,098,660 270,000 373,540 2,062,200
0.9% 3.0% 0.7% 1.0% 5.6%
40.4%
13,574,430
42.5%
15,362,320
44.5%
17,007,630
46.4%
Saint Thomas, Virgin Islands, Feasibility Study
Page H-10
RESORT HOTELS Performance in 2014 The following information is provided as a background to illustrate the segment as it relates to an 200-room Harbor Vista Hotel in Saint Thomas, Virgin Islands: 1. 2. 3. 4, 5. 6. 7. 8. 9. 10. 11. 12.
United States Virgin Islands Business Overview by Economic Development Authority, USVI Caribbean Trends in the Hotel Industry – Ninth Edition – 2014 by PKF Consulting The Evolution of the All-Inclusive Resort by HVS 2015 Caribbean Hospitality Financing Survey by KPMG Advisory 2014 Caribbean and South American Construction Report by BCQS International Tax Incentives for Hotels in the U.S. Partnership Issues by Hotel Financial Strategies Potential Sources of Hotel Financing Hotel Management Companies by HVS Cost Estimation Form by IHC Interim Hospitality Consultants Letter of Agreement This week in St. Thomas and St. John, Your Guide to America’s Paradise, by Morris Caribbean Publications, St. Thomas, VI.
Saint Thomas, Virgin Islands, Feasibility Study
Page H-11