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

Mr. Patrick HeckJune 14, 2012• Analyze the current and future market demand for upscale full servicelodging accommodations in the local and regional market areas;• Review and evaluate existing plans and provide key planning criteria as tothe sizing, concept, amenities to be provided, and timing of the development;• Develop a forecast of the likely occupancy levels and average daily roomrates (“ADR”) the Hotel could reasonably achieve for its first ten-years ofoperation;• Develop a statement of estimated annual operating results for the proposedproject for its first ten years of operation. This statement would reflect allpotential revenues and expenses associated with ongoing operations;• At the appropriate time, prepare a formal report on the market and financialperformance of the proposed development. This report would be suitable forinclusion in the tax exempt bond offering circular presentation that would bedistributed to third parties for the purpose of securing mortgage financingand/or equity participation. This report would also be suitable for use in thenegotiation of a lease, management or franchise agreement, as well as forpresentation to representatives of local government agencies.The work program for the study will be concerned with the determination of currentand potential future demand for hotel rooms, assessment of the existing andpotential future competitive hotel supply, and the share of the market that couldreasonably be attained by the subject facility.It should be noted that PKF Consulting USA (“PKF Consulting”) performed ananalysis of the potential market performance and prepared a statement of theestimated annual operating results for this project in December 2009, October 2010and again in the summer of 2011. For this updated analysis, the scope of work willbe identical to that performed in these prior studies, but updated reflect not only thechange in market conditions since 2011, but also the revised development programof the proposed Hotel.B. PKF Consulting USAAs a point of background, we would like to provide you with a brief overview of ourFirm. PKF Consulting USA (“PKF”) is a division of Colliers International(NASDAQ:FSRV), the third largest real estate services firm in the World. PKF is anational firm of management consultants, appraisers, real estate brokers andindustry specialists who provide a full range of services to the hospitality andtourism industries. Headquartered in San Francisco, the Firm has offices inBoston, New York, Philadelphia, Portland, ME, Atlanta, Miami, Washington, D.C.,- 2 -