HSA 546 Exam 1 Questions and Answers

The reason the hotel business is cyclical in nature is: Ans- because of the difference between the lifetime of a hotel and the cycle of hotel building, meaning that frantic building is followed by periods of excess capacity The three factors or dimensions in making a decision to invest in a hotel are: Ans- availability of financing, real estate values, and hotel operations. Name the two kinds of management companies Ans- 1) Chain management companies 2) Independent management companies From the real estate development's point of view, why is a hotel built: (3) Ans- 1) The area or community needs the property. 2) The underlying value of the real estate and its appreciation are more important to the investors than the profitability of the hotel. 3) In inflationary times, hotel pricing is flexible and can be raised overnight. The demand for hotel rooms changes direction Ans- 3 to 6 months after the economy does The major factor tha