Tanya Pierson, MAI ◦ Managing Director ◦ HVS Evaluate potential sites
Interview demand generators – hotel needs and requirements
Interview competitive hotels
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 Crowne Plaza, Hilton, Sheraton, Marriott, and Radisson Blu
◦ 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: Courtyard by Marriott, Hilton Garden Inn, Hyatt 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 Radisson Red 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