Presentations

Report
2013 GWCCA
Planning
Retreat
Day Two
September 19 & 20, 2013
GWCCA Opportunities
2
Hotel Development
Strategic opportunity for campus
development and business growth potential
for GWCCA
3
Reasons for considering a
Hotel Development
•
Respond to customer preference/demands
– Better serve Buildings B & C
– To increase the occupancy of GWCC
•
Retain or enhance competitive position
•
Support surrounding development (Northside Drive, NSP,
neighborhoods)
•
Provide a potential revenue stream
4
Local Conditions
• Expanding meeting space to accommodate
small to medium sized events.
• Three major properties (downtown) have
developed environmentally controlled
connectors between their properties to improve
their ability to enhance their group business.
• Committing to fewer room blocks so they can
book internal meetings.
5
Development on/around our
campus
New Attractions:
– College Football Hall of Fame
– National Center for Civil and Human Rights
– New Stadium Project
– Atlanta Streetcar
6
Market/Demand Analysis
Retained three consultants:
• HVS Global Hospitality Services (HVS)
• Jones Lang LaSalle Hotels and Hospitality
Group (JLL)
• PKF Hospitality Research (PKF)
Scope: Determine the feasibility of developing a
convention-oriented hotel on GWCCA campus.
Recommend project scope to include number of
rooms, meeting space, services, and amenities.
7
Results
Rooms
Meeting Space
HVS
1,200
110,000
JLL
1,000
53,520
PKF
800
60,000
Ballrooms
Pool
Restaurants
2
2
2/500
3
1
2/500
2
1
2 (n/a)
APPX. Cost of Facility
$290-350M $350-400M $230-250M
8
JLL Report
Summary
9
JLL – Atlanta Market
• Strong Travel/Tourism Infrastructure
• Expected economic improvement and with
limited supply growth, Lodging RevPar should
see near term improvements
• Robust office market shifting to landlordfavorable market as companies move from
suburbs to urban core
10
JLL – Conventions Market
• Increases in supply
– CEIR outlook (3 years) is moderate demand
growth:
• 5.8% Exhibit Net Square Foot growth
• 6.8% increase in revenues
• GWCC exhibition attendance has
remained flat (possibly indicating
decreased competitiveness).
11
JLL – Conventions Market
• Customer surveys indicate proximity of hotel
rooms to facility is of paramount importance to
meeting planners. The GWCC ranks 14th in
terms of rooms within ½ mile per 1,000sf of
exhibit hall space.
• “A new headquarter hotel at the GWCC would
likely mitigate some of the ‘refer In-House
Facility/Hotel’ lost business and a portion of
the ‘No Availability Hotels’ lost business.”
12
Competitive Set Hotel Stock Analysis
Rankings based upon number of rooms per square foot of exhibition space
Market
SF Exhibition
Space
Rooms 1/2
mile
Rank
Rooms 1
mile
Rank
Atlanta
1,366,000
1,947
14
10,634
10
Chicago
2,600,000
800
15
1,032
15
Dallas
929,726
3,607
10
6,715
11
Denver
584,000
6,445
5
7,854
7
Houston
862,000
2,178
11
5,053
12
Indianapolis
566,000
6,488
4
6,863
8
Nashville
118,675
3,003
2
3,823
2
New Orleans
1,100,000
2,309
13
13,179
9
Orlando
2,053,800
4,482
12
11,685
13
Phoenix
645,900
3,049
9
3,404
14
San Antonio
440,000
8,321
3
12,578
3
San Diego
615,700
5,295
7
11,307
5
San Francisco
538,700
13,909
1
26,309
1
Tampa
200,000
2,176
6
2,791
6
Washington DC
703,000
4,062
8
13,296
4
13
Summary - JLL
•
•
•
•
•
Development viability is very strong
Demand is very favorable for project
Brand is significant
Will require public support
Will support debt service but not enough to
support private equity requirement
• Would have negative short-term impact on
other hotels, but benefit market in long-term.
14
HVS Report Summary
15
HVS – Hotel Market
• Over the past 12 years hotel occupancy has had
modest positive growth (even through
recessions).
• From 2001 – 2012 local hotel occupancy levels
ranged from a low of 55% to a high of 68%
• 2012 National occupancy levels reached highest
point since 2007 and may soon exceed 70%.
16
Historical Supply & Demand
Trends Local Competitive
Year
Occupancy
Average Rate
2001
61.5%
$141.63
2002
62.2%
$137.45
2003
59.8%
$128.52
2004
61.7%
$130.98
2005
64.2%
$134.42
2006
66.3%
$145.14
2007
68.2%
$150.16
2008
63.2%
$150.99
2009
55.4%
$142.73
2010
63.6%
$145.44
2011
62.0%
$138.64
2012
64.9%
$144.64
17
Subject Property’s
Occupancy & Average Rate
Forecast (FY)
Year
2017
2018
2019
2020
2021
Average
Occupancy Rate
63.0%
67.0%
69.0%
71.0%
71.0%
$176.17
$182.33
$187.80
$193.44
$199.24
18
Summary - HVS
• Hotel would increase activity in Building C and
group room night demand.
• Brand is important for success.
• Feasibility is extremely high.
• Biggest risk is regional/national incident (ie:
Katrina).
• Combination of Public/Private Development
19
PKF Report Summary
20
PKF – Atlanta Market
• Atlanta has made strong progress in higherpaid professional and technical services job
growth.
• New attractions (CFHOF, Museum, NSP) will
bring new jobs.
• Multiple growth engines and strong
demographics will make Atlanta an aboveaverage performer in the long term. (Moody’s
Analytics July 2013).
• Location of current Hotel inventory in relation
to Buildings B and C has a negative impact on
GWCC business.
21
Hotels in the Atlanta Downtown
Area
22
PKF – Atlanta Market
• Demand for hotel rooms is at a historic high
since the “Great Recession”.
• Demand has increased following GWCCA
expansions (GWCC/Dome/COP) & attractions
(Aquarium, World of Coke).
• Development of Lucky Marietta District has
improved the offering of restaurants and
entertainment options for visitors.
23
PKF - Summary
• Hotel at GWCC would be preferred hotel for
customers.
• Creates ability to sell/host multiple events
in multiple buildings.
• Opportunity to spur development.
• Overall market feasibility is very high.
• Public development is key
• Consider a non-branded development.
24
Hotel Comparisons
Years 1 & 5
Occupancy
ADR
Total
Revenues
Net
operating
income
PKF – 800 rooms
1 Year
5 Year
58%
65%
$187
$206
HVS – 1,200 rooms
1 Year
5 Year
63%
71%
$176.17
$199.24
JLL – 1,000 rooms
1 Year
5 Year
52%
66%
$150.52
$181.76
$48,495,000 $59,912,000 $41,611,905 $101,550,433
$12,570,000 $17,040,000 $11,519,913 $29,961,324
HVS based upon 6 months
operations
25
GWCCA Hotel Opportunity
Next Steps
Recommend assigning the Project to Stadium
Development Committee
o Consultant Presentations
o RFP/Q for Project Manager/Developer
26
Questions?
27

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