Question: There are five competitive motels in a resort area with the following number of rooms and current occupancy rates:
Demand for rooms in the area is broken down into the following sources and growth rates:
a. Calculate the current average occupancy of the five motels.
b. Calculate the composite rate of growth in demand.
c. Apply the composite growth rate to the demand figures to obtain projected demand for each of the next 4 years.
d. Assume that a 70% average room occupancy for the motels in this resort would be profitable. Calculate the future supply of rooms that could be supported for each of the next 4 years.