Super 8 Motel- Guelph Harvard Case Solution & Analysis

Din Ismail, owner and CEO of thirty-six room Super 8 Motel is located in Kitchener, was offered $ 2.9 million for the motel. After managing the motel for almost twenty years, Dean and his family are faced with the decision to either sell or keep in a motel. If they were to sell the motel, Dean is necessary to determine whether the offer of $ 2.9 million was actually a fair price for the sale of property. The decision should be taken in the face of considerable uncertainty in the local market. New hotels planned for the local area will increase the supply of available rooms by more than 80 percent in the next two years. This significant increase in the supply of available rooms can have a significant impact on employment and prices and, consequently, earnings and cash flows Super 8 Motel. Like many owner-managed businesses, the financial statements reflect a motel personal and corporate planning issues (eg, wages, which is higher than the market price, bonuses and management fees), which makes it difficult to determine the earnings and cash flows that are directly related to operations Motel . In addition, the sale of this property may affect the value of the adjacent property owned by Dean. Dean has fourteen days to decide whether to accept the offer of $ 2.9 million in a motel or reject it, while at the motel and future cash flows, which generates a motel. "Hide
by Karim Ismail, Fred Pries Source: North American Case Research Association (NACRA) 13 pages. Publication Date: December 1, 2011. Prod. #: NA0160-PDF-ENG

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