Strategic Opportunities and Market Analysis for GWCCA Campus Development
Explore the strategic opportunities presented during the 2013 GWCCA Planning Retreat, focusing on hotel development, local conditions, campus development projects, and market/demand analysis. The retreat highlighted the potential for new revenue streams, enhancing competitive positioning, and supporting surrounding community growth. Market analysis by renowned consultants provided insights on the feasibility and scope of convention-oriented hotel development on the GWCCA campus.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
E N D
Presentation Transcript
2013 GWCCA Planning Retreat Day Two September 19 & 20, 2013
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 HVS 1,200 110,000 2 2 2/500 $290-350M $350-400M $230-250M JLL 1,000 53,520 3 1 2/500 PKF 800 60,000 2 1 2 (n/a) Rooms Meeting Space Ballrooms Pool Restaurants APPX. Cost of Facility 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 landlord- favorable 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 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 SF Exhibition Space Rooms 1/2 mile Rooms 1 mile Market Rank 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 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 Propertys Occupancy & Average Rate Forecast (FY) Average Rate Year Occupancy 2017 2018 2019 2020 2021 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 Atlanta Market Atlanta has made strong progress in higher- paid 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 above- average 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 PKF 800 rooms 1 Year 58% $187 HVS 1,200 rooms 1 Year 63% $176.17 JLL 1,000 rooms 1 Year 52% $150.52 Occupancy ADR Total Revenues Net operating income 5 Year 65% $206 5 Year 71% $199.24 5 Year 66% $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
