 Tanya Pierson, MAI ◦ Managing Director ◦ HVS  Evaluate potential sites

 Interview demand generators – needs and requirements

 Interview competitive

 Review future growth for the area

 Evaluate performance of the market; strength of various types of hotels

 Make recommendations based on potential occupancy/average rate, considering cost to construct 2 4

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1  Thirteen major companies were contacted to determine their hotel usage, requirements, price range, and preferences. Below are conclusions from those that responded.

◦ Hotel usage ranged from 10 rooms to 400 rooms per month

◦ Most utilize Eden Prairie hotels, some also use , Hilton, Sheraton, Marriott, and

◦ Rates range from $60 - $140, with most averaging around $85-90

◦ All stated Eden Prairie was their preference for a hotel location

◦ Desired amenities: shuttle, free internet, breakfast, pool/exercise room, dining options, meeting space

◦ Mixed feelings about need for hotel – some want meeting space/dining options, some are satisfied with current inventory  Limited-Service Hotels: Fairfield Inn, SpringHill Suites

 Select-Service Hotels: , , Place

 Full-Service Hotels: Marriott, Hilton, Sheraton, Hyatt, Radisson

◦ 72% occupancy/$98 average rate/$70.56 RevPAR – Limited- and Select-Service Hotels (Eden Prairie)

◦ 66% occupancy/$121 average rate/$79.86 RevPAR – Full-Service Hotels (Bloomington/Minnetonka/Edina)

◦ RevPAR (Revenue Per Available Room) difference of 13%

◦ Risk of new supply, cost of construction  Select-Service Hotels: $100,000-$110,000 per key Full Service-Hotels: +$150,000 per key

 Select-Service hotels are more profitable than full- service hotels.

◦ Upscale hotels (Cambria/Aloft/Courtyard) averaged a Net Operating Income (NOI) of 30.8%, compared to 25.2% for Upper Upscale hotels (Marriott/Hilton/Sheraton)

Wyndham Garden Aloft Hotels Cambria Suites Wyndham Garden Aloft Hotel Radisson Red Cambria Suites Radisson Red Wyndham Garden Cambria Suites Aloft Hotel  Tanya Pierson, MAI ◦ Managing Director ◦ HVS