per room.Energy CostsIndia has the highest energy costs at $9,665, followed by China at $6,885 and Europe at $3,925 per room. South America and the U.S. are similar at approximately $2,700 per room.Income Before Fixed ChargesWith its high f&b coupled with very low departmental expenses, the proposed Marriott in India generated income before fixed charges of $12,528,000, which was 51% of total revenue. The other four markets had a fairly tight range of IBFC of $8,014,000 for Europe and up to $8,788,000 for the U.S. These profit ratios are about 40%.Management FeesThe base management fee for all the markets was 3% of total revenue except for China and India, which was 2.5%. China is a particularly attractive market for international hotel companies who compete aggressively to obtain management contracts.Property TaxesThe U.S. pays the most in property taxes: $540,000. China is next at $433,000, followed by Europe at $424,000. India is next at $252,000, followed by South America at only $110,000. Note that South America also pays a turnover tax of $844,000 and a bank credits & debits tax of $211,000, making it much more expensive than the other regions from a total tax perspective.InsuranceInsurance ranges from a low of $66,000 in South America to $209,000 in the U.S.Reserve for ReplacementAll the markets utilized a 4% of total revenue reserve for replacement except the U.S., which used 5%.The following are several additional expenses that are deducted by typical buyers of hotels in the regions where they operate. As appraisers, it is important to reflect the actions of typical buyers and sellers and include these expenses in the revenue and expense statement if they are customary deductions used by market participants. For example in China, it is normal for buyers to deduct a business tax. This type of tax is normally deducted in other regions of the world.Business TaxAn additional tax normally deducted in China, which amounted to $1,117,000 or 5.5% of total revenue.Incentive Management FeeAdditional fees paid to hotel management companies are usually based on a percentage of net income. Marriott typically has an incentive management fee, which is traditionally deducted for valuation purposes in other areas of the world. However, as described previously, in the U.S., incentive management fee is usually subordinated to debt service and is usually loaded into the equity yield and not specifically deducted during the appraisal process. Occasionally, it may be helpful to include incentive management fees for appraisals in the U.S., which is also proper methodology. Outside the U.S., the incentive management fee ranges from 2.7% of total revenue in South America to 3.9% in India.Turnover Tax and Bank Credits and Debits TaxAs previously described, hotel appraisers in South America also deduct a turnover tax and a bank credit & debits tax.Net IncomeThe resulting income for these five regions is as follows:China: $5,086,000Europe: $5,272,000India: $9,602,000South America: $4,904,000U.S.: $6,351,000India leads the list showing a net income of $9,602,000, which is significantly higher than the other regions. South America is the lowest at $4,904,000. Even if you deduct an incentive management fee for the U.S., it would still be