Hotel Feasibility Study

Topics: Hotel, Hotel chains, InterContinental Hotels Group Pages: 23 (6344 words) Published: April 11, 2013
Hotel Feasibility Study Completed March 6, 2012

For More Information Please Contact Megan Compton 512.230.5193

Table of Contents


Hotel Feasibility Summary Centerpoint Hotel Feasibility Report Excerpt Centerpoint at Lockhart Site Plan

I. Hotel Feasibility Summary

Page 1 of 5


SUMMARY FOR THE PROPOSED HOLIDAY INN EXPRESS HOTEL LOCKHART TEXAS. SH 142 AT SH 130: -An analysis of the feasibility of a new, strongly branded Holiday Inn Express Hotel has been performed at this location, with the alternative budget brand Motel 6 also analyzed. It was concluded that a new hotel at this location would be a highly attractive investment for a developer. -The Holiday Express brand was selected as the highest and best use of the site/location because it is the most sought after ‘middle of the market’ limited service hotel brand (based consumer choice, REVPAR performance, and level of investment). -Such a hotel would not only take advantage of increasing population growth in the TX 130/Lockhart area, but also provide the best lodging choice for consumers outside of San Marcos. -Developing a hotel at this site will produce an unleveraged, pretax return on total invested capital of approximately 17%, with a return on equity of over 40%. This is an excellent hotel investment. -A new strongly branded limited service hotel opening in 2013 would be expected to produce performance results as follows: Occupancy Percent

Year Year Year Year Year Year Year Year Year Year I II III IV V VI VII VIII IX X 63.5% 72.1% 72.6% 72.3% 72.6% 72.3% 72.2% 72.0% 71.8% 71.8%

Project Summary Average $ $ Rate REVPAR
$103.94* $108.00 $115.04 $117.92 $119.68 $120.87 $122.07 $123.29 $124.53 $125.76 $65.96 $77.86 $83.55 $85.23 $86.93 $87.39 $88.08 $88.77 $89.47 $90.28

Total Revenue


$2,275,230 $1,025,553 $2,685,615 $1,270,937 $2,882,002 $1,396,809 $2,939,643 $1,407,982 $2,998,436 $1,345,942 $3,014,206 $1,316,196 $3,037,965 $1,335,163 $3,061,912 $1,347,878 $3,086,048 $1,283,170 $3,113,921 $10,913,267***

-The addition of F1 Racing and Texas Highway 130 and all associated economic impacts to the market make this an exciting time for both the corridor and for all towns / cities in the surrounding area. These developments positively impact the performance of a new hotel in no uncertain terms.

Page 2 of 5 -The selection of 90 units for the hotel reflects a slightly larger than usual hotel for this brand in a highway market. 90 units was selected in order to not only meet demand requirements for overflow from the F1 Racing complex, but also to ensure that demand for this brand was filled at this location. A smaller hotel of the same brand would likely produce a higher REVPAR, but would lack many of the enhanced public spaces (larger outdoor pool with BBQ seating area, larger fitness center, etc.). -Though we have incorporated a bump upwards in demand for hotel rooms in the 4th quarter of 2012 and thereafter due to the impact of F1 Racing, we have moderated growth levels in demand and in price of rooms in the near future, and we expect new supply to be attracted to the recent high level of performance of hotels in this and other similar areas. Successful hotel markets like the local area inevitably attract new hotel development.

Please call or email or call with any questions.

Todd Walker, President Source Strategies, Inc.

PO Box 120055 ♦ 134 Laurel Heights, San Antonio, TX 78212 ♦ 210-734-3434 ♦ Fax 210-735-7970 ♦www.SourceStrategies.Org

Page 3 of 5

Land Value: $614,196 Starts: 7/1/2013 #Rooms: 90 CostPerKey: $80,000

QUARTER: Rmnites Sold Rmnites Avail Occupancy % Avg Rate REVPAR Room Revenues Misc. Sales Total Sales

Third 5,512 8,280 66.6% $110.00 $73.23 $606,307 30,315 $636,622

Fourth 5,125 8,280 61.9% $109.99 $68.08 $563,705 28,185 $591,890

First 5,022 8,100 62.0% $90.00 $55.80 $451,980 22,599 $474,579

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