APPLICATION OF YIELD &EQUIVALENT OCCUPANCY FORMULAE

No. of rooms Occupancy ARR Gross room Total contr. Yield %

Sold Percentage Revenue Margin*

Current 210 70.0 % $ 80 $ 16,800 $ 14,280 52.5%

Identical 168 56.0% 100 $ 16,800 14,784 52.5%

Equivalent 162** 54.1% 100 $ 16,200 14,280 50.6%

New 150 50.0% 100 $ 15,000 13,200 46.9%

New 165 55.0 % 100 $ 16,500 14,520 51.6%

*= based on the marginal cost of $12. Since fixed costs are the same for all situations, the
differences between total contribution margins will equal the differences between net room
revenues.
** = rounded down from 162.3. based on this amount, net revenues would be $ 14,282.