1. You work as a financial analyst for Rodway, Singh and Abter Ltd, (RSA), a firm of international hospitality industry consultants. RSA has been approached by the Starwood Hotels Group, which is considering a strategic investment in either a South Asian or a South-east Asian hotel company. Starwood's initial research has identified two potential investment targets. One is Asian Hotels and Properties PLC which is based in Kuala Lumpur, Malaysia and is listed on the Singapore stock exchange. The other is Aitken Spence PLC which is based in Sri Lanka and is listed on the Colombo stock exchange. Write a brief internal management memo that summarises the current businesses of these two companies, together with an evaluation of the expected future outlook for the hospitality industry in South and South-east Asia. 2. Undertake the necessary research and write a report to the client which critically evaluates and compares the recent financial performance and risk exposures of these two companies, together with a reasoned argument as to your advice as to which company – if either - might be the preferred investment target. 3. The client has got two additional concerns. One is about whether hotel room prices should be based on an absorption cost or on a marginal cost basis; the other is how cost-volume-profit analysis might be useful in managing an hotel business. Write a short report which advises the Starwood Hotels Group on both of these two concerns.