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

The Westin Denver International AirportHotel Market Analysisa. Historical Performance of the Competitive DowntownLodging MarketPresented in the following table is the historical performance of the competitivedowntown lodging market from 2007 through 2011, as well as YTD June 2011 and2012.The Westin Denver International AirportHistorical Performance of the Competitive MarketAnnual Percent Occupied Percent Market Percent PercentYear Supply Change Rooms Change Occupancy ADR Change RevPAR Change2007 1,419,850 - 986,512 - 69.5% $154.23 - $107.16 -2008 1,493,580 5.2% 1,037,392 5.2% 69.5% $163.21 5.8% $113.36 5.8%2009 1,493,580 0.0% 918,420 -11.5% 61.5% $149.80 -8.2% $92.11 -18.7%2010 1,515,480 1.5% 1,030,784 12.2% 68.0% $157.64 5.2% $107.22 16.4%2011 1,727,910 14.0% 1,207,794 17.2% 69.9% $163.37 3.6% $114.19 6.5%CAGR 5.0% - 5.2% - - 1.4% - 1.6% -YTD Jun '11 863,955 - 587,505 - 68.0% $161.42 - $109.77 -YTD Jun '12 863,955 0.0% 612,970 4.3% 70.9% $160.01 -0.9% $113.52 3.4%Source: PKF Consulting USAAs noted, supply for the competitive downtown lodging market increased at a CAGRof 5.0 percent over the past five years. In 2008, supply increased 5.2 percent overprior year levels as a result of the addition of the 202-room Ritz-Carlton in January2008. The 1.5 percent increase in supply in 2010 is attributable to the annualizedaddition of the 239-room Four Seasons in October 2010. Lastly, the 14.0 percentincrease in supply in 2011 is reflective of the annualized addition of the FourSeasons as well as the addition of the 403-room Embassy Suites in January 2011.Through YTD June 2012, supply remained stable with no further additions.Demand for the competitive downtown lodging market increased at a CAGR of 5.2percent between 2007 and 2011, in line with the increase in supply during this time.Over the past five years, market occupancy ranged from a low of 61.5 percent in2009, the height of the Great Recession, to a high of 69.9 percent through year-end2011. On average, the downtown competitive lodging market achieved a marketoccupancy of approximately 68 percent over the past five years. While demandincreased 5.2 percent in 2008, on par with the increase in supply during this time, asignificant decline in demand of 11.5 percent was experienced in 2009, whichresulted in the five-year low occupancy level of 61.5 percent. As the economybegan to improve, the competitive downtown lodging market experienced anincrease in demand of 12.2 percent in 2010 and 17.2 percent in 2011, resulting in afive-year high occupancy level of 69.9 percent. Through YTD June 2012, demandincreased 4.3 percent over prior year levels to 70.9 percent.IV-26