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

August 28, 2012Mr. Patrick HeckDeputy Chief Financial OfficerDenver International Airport201 West Colfax AvenueDenver, Colorado 80202Re:Sensitivity Analysis – Alternative ForecastThe Westin Denver International Airport – Denver, ColoradoDear Mr. Heck:Pursuant to your recent request, we have provided an alternate, more conservativestatement of estimated annual operating results for the proposed 519-room Westinhotel (the “Subject”) to be located at the south terminal of the Denver InternationalAirport (“DIA”) in Denver, Colorado. As we discussed, this sensitivity analysis hasbeen prepared at the specific request of representatives of the DIA as anaddendum to our actual forecast for the proposed hotel contained in this report.Accordingly, while the numbers presented in this addendum letter reflect a moreconservative level of performance for the Subject, they do not reflect the actualconclusions contained in PKF Consulting’s formal report dated September 18,2012.Specifically, in modifying our forecast, we have made the following changes: Lowered our “hypothetical” ADR, stated in $2012 from $180 to $175; Reduced our assumed rate of ADR growth between 2013 and 2016; and, Modified the operating expenses that are associated with the decrease inrevenues.A summary of the variance in the average daily rate and net operating incomebetween our original (baseline) and revised forecast is presented in the followingtwo tables. We have attached our revised statement of estimated annual operatingresults to the end of this letter.PKF Consulting USA | 50 California Street, 19 th Floor | San Francisco, CA 94111TEL: 415 788 3102 | FAX: 415 433 7844 | www.pkfc.com