The Arizona Sky Resort

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Name: Instructor: Course: Date: The Arizona Sky Resort Case Study Introduction The Arizona Sky Resort is a 165-room full-service resort located in Flagstaff, Arizona. High Country Management, a hotel/motel management company has presented a capital expenditure plan for 2017. This report will identify items on the list that should be completed immediately and the items that can be deferred while giving a reason for each decision. Further, the report will identify and give a reason why some items should not be classified as capital expenditure (CapEx), or why some of the items should not be completed at all. Overview of the Situation The Arizona Sky Resort operates in a business environment where they are three other rival properties whose combined number of rooms is 350. The Arizona Sky Resort indicates a below par performance in occupancy levels, but exhibits an above par performance in ADR and RevPAR. Based on an index value of “100” that indicates equal performance to rival properties, the Arizona Sky Resort indicates index values below 100 in occupancy levels from 2014 through 2016. In contrast, the Arizona Sky Resort exhibits index values above 100 in ADR and RevPAR from 2014 through 2016. Today, millennials may not be the majority of travelers, but soon they will constitute a majority of the travelers. A majority of the customers in the hospitality industry are expected to be millennials in the next five to ten years. Consequently, hotels are realigning to ensure they meet the needs of this customer segment. A majority of the facilities in the Arizona Sky Resort are designed to cater to baby boomers clientele. With the shift from baby boomers to

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