PKF Hotel Market Demand and Financial Analysis - DIA Business ...

The Westin Denver International AirportHotel Market AnalysisPresented in the following table is the projected performance of the competitivemarket for the period 2012 to 2019. We have provided the 2011 performance of thecompetitive market as a basis of comparison.The Westin Denver International AirportCompetitive MarketEstimated Future Growth in Lodging Supply and Demand2012 - 20192011 2012 2013 2014 2015 2016 2017 2018 2019ROOMS SUPPLY 5,339Additions/(Deletions) to SupplyThe Westin Denver International Airport 216 303Four Seasons Dow ntow n Denver (239 rms 10/2010) 179Embassy Suites Dow ntow n Denver (403 rms 12/2010) 403Renaissance Hotel (231 rms 1/2014) 231Cumulative Rooms Supply 5,921 5,921 5,921 6,152 6,368 6,671 6,671 6,671 6,671--------- --------- --------- --------- --------- --------- --------- --------- ---------Total Annual Rooms Supply 2,161,165 2,161,165 2,161,165 2,245,480 2,324,320 2,434,915 2,434,915 2,434,915 2,434,915Grow th Over the Prior Year 10.9% 0.0% 0.0% 3.9% 3.5% 4.8% 0.0% 0.0% 0.0%DEMONSTRATED DEMAND IN BASE YRTransient 769,358 50%Group 683,649 45%Contract/Crew 82,186 5%--------- ---------TOTAL DEMONSTRATED DEMAND 1,535,193 100%--------- ---------PROJECTED DEMANDTransientDemonstrated 769,358 784,745 800,440 816,449 855,218 887,622 925,775 944,290 963,176Induced/(Unsatisfied) 0 0 (18,991) (18,824) (26,855) (16,983) (54,420) (72,144) (90,254)--------- --------- --------- --------- --------- --------- --------- --------- ---------Total 769,400 784,700 781,400 797,600 828,400 870,600 871,400 872,100 872,900Grow th Over Prior Year N/A 2.0% -0.4% 2.1% 3.9% 5.1% 0.1% 0.1% 0.1%--------- --------- --------- --------- --------- --------- --------- --------- ---------GroupDemonstrated 683,649 697,322 711,268 725,494 747,144 772,286 803,032 819,093 835,475Induced/(Unsatisfied) 0 0 (16,875) (29,276) (26,566) (17,178) (47,205) (62,579) (78,287)--------- --------- --------- --------- --------- --------- --------- --------- ---------Total 683,600 697,300 694,400 696,200 720,600 755,100 755,800 756,500 757,200Grow th Over Prior Year N/A 2.0% -0.4% 0.3% 3.5% 4.8% 0.1% 0.1% 0.1%--------- --------- --------- --------- --------- --------- --------- --------- ---------Contract/CrewDemonstrated 82,186 82,186 82,186 82,186 82,186 82,186 82,186 82,186 82,186Induced/(Unsatisfied) 0 0 (1,989) (4,192) (4,103) (3,493) (4,928) (6,405) (7,855)--------- --------- --------- --------- --------- --------- --------- --------- ---------Total 82,200 82,200 80,200 78,000 78,100 78,700 77,300 75,800 74,300Grow th Over Prior Year N/A 0.0% -2.4% -2.7% 0.1% 0.8% -1.8% -1.9% -2.0%--------- --------- --------- --------- --------- --------- --------- --------- ---------Total Market Demand 1,535,200 1,564,200 1,556,000 1,571,800 1,627,100 1,704,400 1,704,500 1,704,400 1,704,400Grow th Over Prior Year N/A 1.9% -0.5% 1.0% 3.5% 4.8% 0.0% 0.0% 0.0%Market Occupancy 71% 72% 72% 70% 70% 70% 70% 70% 70%Source: PKF Consulting USAAs noted, we project accommodated demand to increase 1.9 percent in 2012,resulting in a market occupancy level of 72 percent. This estimate is slightly lowerthan the performance of the competitive market through YTD June 2012.Accommodated demand is projected to remain relatively unchanged in 2013resulting in continued occupancy at 72 percent. Beginning in 2014, we project thecompetitive market to achieve a stabilized occupancy level of 70 percent. Whileaccommodated demand is projected to increase in 2014, as a result of the openingof the 231-room Renaissance hotel, and in 2015 and 2016 as a result of theaddition of the 519-room proposed Subject, market occupancy is projected toIV-33