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

The Westin Denver International AirportHotel Market AnalysisDenver Lodging MarketHistorical and Projected Performance$20070.4%70.4%$180$16070.4%68.6%65.4%66.9%64.4% 65.4% 62.8%62.7%65.2%66.3%67.0%67.4% 68.3% 68.3%70%65%$140$120$10061.6%60.2% 62.1%59.3%57.9%$90$9957.5%$106$93$94$98$101$108$115$121$12760%55%$80$65$70$75$77$77$79 $79$76 $75 $75$8150%$6045%ADROccupancySource: PKF Hospitality Research – Hotel Horizons ® June – August 2012 and Smith TravelResearchThe overall Denver lodging market achieved a consistent occupancy level of 70.4percent between 1995 and 1997. Occupancy declined in 1998 and 1999 as a resultof an increase in supply of 10.2 and 11.6 percent, respectively. At this point in time,market occupancy fell to 65.4 percent. As new supply was absorbed, occupancyincreased 1.5 percentage points in 1999 before declining significantly between 2000and 2003, which can be attributable to the negative impact of the terrorist attacks onSeptember 11, 2001 (9/11), the war with Iraq, and an outbreak of Severe AcuteRespiratory Syndrome (SARS). Occupancy began to show signs of improvement in2004, which lasted through 2007 with steady increases in demand. However, theDenver lodging market experienced another significant decline in demand between2007 and 2009 as a result of the Great Recession, which negatively impacteddemand for hotel room nights across that nation. At this point in time, marketoccupancy decreased to 57.5 percent, which is in line with the occupancy levelachieved in 2003. As the economy began to show signs of recovery, occupancyincreased to 62.7 percent in 2010 and 65.2 percent in 2011, which representsincreases in demand of 9.8 and 5.8 percent, respectively. Between 2012 and 2016,the Denver lodging market is projected to continue to experience increases indemand. Market occupancy over this period is projected to increase fromapproximately 66 percent in 2012 to a stabilized level of approximately 68 percentbeginning in 2015.IV-4