Mary Quinn Ramer, President | 859-233-1221 | [email protected]

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Mary Quinn Ramer, President | 859-233-1221 | Mramer@Visitlex.Com Hotel Developer’s Toolkit for Lexington, Kentucky Tourism Supply Lexington and Regional Hotel Rooms Supply 1 12,000 Hotel supply in Lexington and the regional area 10,000 remained steady in 2017, following an increase 3,127 3,188 3,332 3,135 8,000 of 6.5% from 2014 until 2016. 6,000 Rooms Lexington has a 70% share of the regional area 7,936 4,000 7,310 7,763 7,783 hotel market. 2,000 ‐ Within the city of Lexington, 7,783 rooms are 2014 2015 2016 2017 contained within 70 hotels. Lexington Non‐Lexington Source: Smith Travel Research Fig. 1 Lexington Hotels ‐ Service Levels Nearly 56% of Lexington hotel rooms – 4,358 units – are in 53 limited-service hotels. Units in 17 full-service hotels make up 44% 17 Full‐Service 53 Limited‐ hotels, 3,425 (3,425 rooms) of Lexington hotel supply. Service Hotels, rooms 4,358 rooms Full-service brands include Marriott, Hyatt Regency, Hilton, 21c, Embassy Suites, and DoubleTree, among others. Source: Smith Travel Research, VisitLEX Fig. 2 Total Meeting Space in Lexington Hotels Six out of 28 Lexington hotels with meeting Sq. Footage Properties Representative Brands 20,000 or more 4 Marriott, Hilton, Hyatt, Curio space have more than 10,000 square feet. 15,000‐20,000 0 None 10,000‐15,000 2 Embassy Suites, Clarion Four Lexington hotels have more than 20,000 5,000‐10,000 5 Ramada, Four Points, 21c, Clarion, DoubleTree 1,000‐5,000 9 Fairfield, Hilton Suites, Courtyard, Hyatt Place square feet of meeting space. Less than 1,000 10 Homewood, Hilton Garden, Residence, Hampton Source: VisitLEX Fig. 3 1 Lexington region includes hotels in Berea, Georgetown, Lexington, Paris, Richmond, Wilmore, and Winchester. VisitLEX | Mary Quinn Ramer, President | 859-233-1221 | [email protected] Page 1 of 6 Hotel Developer’s Toolkit for Lexington, Kentucky Tourism Supply (cont.) Since 2014, 17 hotel properties in Lexington Comparable Hotel Sales have sold garnering an average sales price per Number Total Average Sale room of more than $77,000. Year of Sales Rooms Price per Room 2017 4 327 $67,159 2015 was a peak year for Lexington hotel sales 2016 2 236 $70,269 2015 9 1,077 $88,494 in terms of properties and price per room – nine 2014 2 488 $63,593 hotels and $88,494, respectively. Source: Fayette County, KY PVA Fig. 4 By 2023, 931 new hotel rooms in seven Proposed Hotels Project Name Neighborhood Rooms Projected Open Project Phase properties may be open in Lexington. TownePlace Suites Lexington West CBD/Southwest Loop 89 01/31/2018 In Construction Holiday Inn Lexington CBD/Southwest Loop 175 04/03/2018 In Construction Fairfield Inn & Suites Lexington East Northeast Loop 84 06/01/2018 In Construction A total of 348 new hotel rooms are under Marriott Lexington Downtown CBD/Southwest Loop 203 02/05/2019 Final Planning Springhill Suites Lexington North Northeast Loop 125 03/09/2019 Final Planning construction and expected to open in 2018. Residence Inn Lexington Downtown CBD/Southwest Loop 120 02/25/2020 Planning aloft Hotel Lexington University CBD/Southwest Loop 135 04/02/2023 Planning Source: Smith Travel Research Fig. 5 If proposed development happens as planned, total Lexington hotel supply would reach 8,459 rooms by 2019. Tourism Demand Between 2011 and 2013, Lexington hotel demand growth outpaced growth in Lexington hotel supply. As new hotels came on the market in 2014 and 2015, supply growth caught up with demand growth. Source: Smith Travel Research Fig. 6 VisitLEX | Mary Quinn Ramer, President | 859-233-1221 | [email protected] Page 2 of 6 Hotel Developer’s Toolkit for Lexington, Kentucky Tourism Demand (cont.) Annual hotel occupancy in Lexington and the Hotel Market Performance 2 $105 64% regional area has hovered between 62.1% and $95 62.1% 63.7% 63% 63.7% since 2014. 62.6% $85 62% $75 59.8% 61% Between 2013 and 2016, ADR grew 10.5%, $65 60% $93.63 $93.59 increasing from $84.70 to $93.59. $87.66 $55 $84.70 59% $45 $59.64 58% $58.59 $54.44 $35 $50.65 57% RevPAR has increased 15.7%, from $50.65 to 2013 2014 2015 2016 ADR RevPAR Occ $58.59, since 2013. Source: Smith Travel Research Fig. 7 Regional hotels in the 70th percentile of ADR 2016 Performance by Segment ‐ Regional Hotels $160 80% post the highest occupancy rates (67.7%), 67.7% 67.7% 65.1% $140 62.5% 70% relative to lower rated hotels in the region. $120 51.6% 60% $100 50% Hotels in the top 15% of region ADR include $80 40% ADR $60 30% Embassy Suites, Holiday Inn Express & Suites, Occupancy $133.86 $40 $114.87 20% Springhill Suites, 21c, Hilton, Hyatt Regency, $92.34 $20 $67.34 10% $53.28 Courtyard, Homewood, Marriott, Staybridge, $‐ 0% Residence Inn, and DoubleTree. Top 15% Next 15% Middle 30% Next 20% Lowest 20% ADR ADR ADR ADR ADR ADR Occ The poorest performing hotels, in terms of Source: Smith Travel Research Fig. 8 occupancy, are those with an ADR of around $70. Seasonality 90% Lexington visitation peaks three times 80% throughout the year – in April and October 70% during Keeneland racing and sales and in July. 60% 50% Monthly hotel occupancy rates have remained Hotel Occupancy 40% relatively stables over the past three years. 30% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 2015 2016 Source: Smith Travel Research Fig. 9 2 The regional area includes Lexington hotels and hotels in Berea, Georgetown, Lexington, Paris, Richmond, Wilmore, and Winchester. VisitLEX | Mary Quinn Ramer, President | 859-233-1221 | [email protected] Page 3 of 6 Hotel Developer’s Toolkit for Lexington, Kentucky Tourism Demand (cont.) Rolling 12‐Month Average Hotel Market Performance $115 65% Analysis of the rolling 12-month average of $105 63.8% 63.9% 64.2% 64.5% 64.4% 64.4% 64.5% 63.2% 63.3% 63.6% 63.5% 64.0% 65% Lexington hotel occupancy, ADR, and RevPAR $95 64% $85 shows positive trends in all three metrics. $75 64% $65 $102.47 $102.23 $102.17 Occupancy is trending upward by 1.3 points, $99.70 $101.72 $99.48 $101.41 $101.06 $100.84 $100.67 $100.20 $100.05 63% $66.79 $66.58 $66.54 $55 $66.29 $65.75 $65.26 $65.19 ADR is trending upward by 3.0%, and RevPAR $64.88 $64.28 $64.29 $63.72 $63.49 63% $45 is trending upward by 5.2% over the last 12 $35 62% months. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ADR RevPAR Occupancy (%) Source: Smith Travel Research Fig. 10 2017 Lexington Hotel RevPAR by Neighborhood 14 Although RevPAR is relatively low in the I‐75 Winchester Rd I‐75 Newtown airport and I-75 Broadway areas, the lack of I‐75 Richmond Rd supply could indicate the opportunity to induce new hotel demand if new supply was added. Hamburg 7 New Circle/ UK Campus Beaumont Nich Road The Beaumont neighborhood and downtown number of properties I‐75 have relatively low supply and high RevPAR, Broadway Downtown which may indicate pockets of opportunities for Airport ‐ new hotel supply. $‐ $55.00 $110.00 Size of Circle = Number of Rooms Source: VisitLEX Fig. 11 Lexington Hotel Revenue Market Share by Neighborhood 8.9% 7.8% 7.8% 9.2% 9.4% While I-75/Newtown Road corridor is the 7.7% 7.4% 7.9% largest sub-market, the neighborhood’s market 9.7% 10.7% 8.5% 8.6% 9.0% share has declined more than the market share 9.3% 9.2% of other neighborhoods since 2013. 8.6% 8.9% 9.0% 7.9% 6.9% Market share in the New Circle/Nicholasville 28.2% 28.4% 27.4% 25.6% 25.1% Road and Downtown neighborhoods has grown more than other neighborhoods, apparently 2.8% 3.3% 3.2% 2.4% 1.8% capturing demand from other neighborhoods 10.7% 11.0% 11.6% 12.0% 11.5% and inducing its own demand as new supply has been added. 15.9% 16.0% 15.8% 15.8% 17.1% 8.4% 8.5% 8.1% 7.8% 8.0% The Airport hotel market share, 0.3% in 2017, 2013 2014 2015 2016 2017 which is too small to show in the graph, is the Airport Beaumont Downtown Hamburg smallest sub-market in Lexington. I‐75 Broadway I‐75 Newtown I‐75 Richmond Rd I‐75 Winchester Rd New Circle/ Nich Road UK Campus Source: VisitLEX Fig. 12 VisitLEX | Mary Quinn Ramer, President | 859-233-1221 | [email protected] Page 4 of 6 Hotel Developer’s Toolkit for Lexington, Kentucky Tourism Demand (cont.) Blue Grass Airport Total airline passengers at Lexington’s Blue Grass 1,350 71 69,071 69,485 69,364 Airport increased by more than 210,000 people, or 1,300 69 1,250 67 roughly 19.1%, between 2013 and 2016. 64,718 1,200 65 1,314,762 1,150 63 Total operations at Blue Grass Airport remained 1,245,251 1,100 61 1,209,327 steady from 2014 to 2016, indicating a higher Passengers (000) 1,050 59 Operations (000) passenger load per flight. 1,000 57 1,104,351 950 55 2013 2014 2015 2016 Total Passengers Total Operations Passengers per flight operation increased by 11.1% from 2013 to 2016. Source: Blue Grass Airport Fig. 13 Attendance at Major Attractions 2,900 Attendance at major Lexington leisure 2,800 attractions has remained steady at roughly 2.7 2,700 million people per year.
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