Item 26 - Public Hearing Regarding Bristol Project

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SECTION VII taHOSPITALITY www.FinanceDTA.com VII HOSPITALITY OCCUPANCY 50% 75% 70% 65% 60% s 55% 50% 45% 40% 35% Figure 14: Hotel Occupancy in the 2-Mile Zone Forecast 100% to 19 20 21 22 23 ■ 12Mo Ih Occupancy ■ 12Mo01P PtChacge(YOY) The hospitality market in the 2-Mile Zone includes more than 14,000 units comprising 4,643 classified as Luxury and Upper Upscale, 5,746 as Upper Midscale, and 3,915 considered as Midscale or Economy. Since we believe the proposed 250-unit hotel will be in the Upper Upscale category, our analysis will focus on these products. As a result of COVID-19, hotel occupancy in the 2-Mile Zone fell from 77% to 40% in August 2021. However, it has rebounded and is now back to 73% occupancy. RevPAR is a significant metric for hotel operators. RevPAR shows revenue generated per room regardless of whether rooms are occupied or vacant. It is calculated by dividing actual room revenue by potential room revenue, as if all rooms were occupied. The total revenue includes all hotel revenues related to rooms, food service, and beverages and revenue generated by other income -producing departments. An increase in RevPAR is often interpreted as either an increase in average room rate or an increase in room occupancy. Since there are two metrics involved, an increase in RevPAR Figure 15: RevPAR by Class does not necessarily mean that a building is performing better. Like most financial metrics, RevPAR By Class RevPAR is limited because it does not identify 8 $200 � $1a0 whether the room rate or occupancy is either 160 increasing or decreasing. However, it is a useful ¢ $1a0 tool to compare one project to another. a $120 a, According to Costar, the 12-month occupancy v $100 rate in the 2-Mile Zone was 73.9%, with an = $80 $60 average room rate of $194.55 yielding a RevPAR ry $40 of about $143.41. In general, this indicates a $20 strong hospitality market. It should also be noted that the Luxury and Upper Upscale properties generated RevPAR close to $180 per room. I ......... ..I ........... I. I 19 20 21 22 Luxury & Upper Upscale 0 Upscale & Upper Midscale Midscale & Economy We obtained information for competitive full -service hotels within the the 2-Mile Zone that we thought should be evaluated as possible competitors to the hotel proposed in the Specific Plan. This information is summarized below. For properties that did not have a metric, such as parking at the Westin South Coast Plaza, we left the information blank. Based upon the information provided by the Developer, DTA concluded the Westin South Coast Plaza would be a property that it would target as its competitor since it is a full -service 4 Star property with Related Bristol at 3600 South Bristol Street September 2023 Draft Market Study Report Exhibit 10 SJ