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HOSPITALITY ADVISORY &  ASSET MANAGEMENT

CASE STUDIES

 

Market and Financial Feasibility Studies for Proposed Hotels On College Campuses in the U.S.

The REVPAR team has undertaken numerous market and financial feasibility studies for hotels to be or already located on university and college campuses across the U.S. As part of our refined methodology for this specific target market, REVPAR International has perfected a survey tool to estimate current and future hotel demand needs on campus which is then followed up with personal interviews of certain demand generators to deepen our understanding of past, present and future trends/needs. We also undertake a comparable analysis as a second measure of future performance. This is all done with the end goal of formulating a facility, operating, and pricing profile for the subject hotel and accomplished in parallel to our core methodology and on-the-ground research. Our proven methodology has spread through word-of-mouth from one client to the next whereby we are consistently called upon by both small and large universities/colleges to undertake similar studies on their behalf. In many cases, the successful completion of this initial work leads to an Owner Representation role whereby we are asked to provide on-going technical advisory services as the project develops or proceeds and, in many cases, we are asked to asset manage the project. We have developed proprietary RFP models and processes for various components for the technical advisory work and asset management services.

 

Repositioning & Asset Management of a Historic Full-Service Hotel

Evaluated the future market position of a historic full-service hotel with 7,000 square feet of meeting space and food and beverage outlets if it were to remain a branded affiliate or repositioned to a more upscale product, either independent or branded. To evaluate the foregoing, REVPAR International undertook due diligence and research to estimate the future operating and financial performance of the hotel under both scenarios to establish which would yield the greater value over the long term and ultimately should be pursued. Upon completion of the foregoing, REVPAR International was commissioned to asset manage the property through the renovation and repositioning. This included overseeing the process of evaluating and selecting the various service providers to renovate the hotel, assisting the Project Manager in the renovation, and overseeing the management company's strategy to maintain operations and guest service through the construction period. Concurrent to this, we were involved in the day-to-day asset management of the hotel, protecting the owner's interest through periodic reviews of financial performance, pricing strategies, revenue generation, expense control, and strategic planning, to name a few. Separately, we conducted ongoing operational reviews, review of management agreements, franchise agreements, and other key contracts relative to the operations of the hotel.

 

Operational Review of State-Owned Resort and Conference Center

Undertook a diagnostic operational review of a state-owned resort and conference center with food and beverage outlets. The overall objective of the assignment was to evaluate the operations and marketing program of the facility to determine those areas where improvements could be made, with an eye towards improving the profitability of the overall resort. A specific component of the study included analyzing the meeting/conference space and the target group market relative to the competition, both existing and proposed. A recommendation was made to expand the meeting facilities in order to enhance the competitive position of the resort and enable it to better penetrate the group market -- its primary source of business. All other operating departments of the facility were reviewed as part of the assignment. Subsequent to our findings, REVPAR International was retained to assist in identifying and selecting a new management company for the facility and assist in negotiating the agreement and contracts. As part of this process, we were able to have the management company put up equity dollars to fund a portion of the expansion plans for the meeting space.

 

Owner's Representative for Development of Hotels

Acted as Owner's Representative/Project Manager in the planning and development of three branded hotels. Initially, we undertook due diligence regarding the feasibility of the projects. Once the viability of the projects was established, we estimated development costs, assisted in identifying, selecting, and securing the franchise affiliations; hired an architect and civil engineer; secured permits and approvals; supervised, monitored, coordinated, and reviewed the construction of the projects, the project budgets, and the project schedules on an ongoing basis throughout the construction period, including identifying, selecting, and monitoring General Contractors (and other subcontractors when appropriate) to build the hotels in accordance with the plans and specifications developed by the design teams and brands. In addition, we monitored and approved change orders, application for payments, etc., in conjunction with the architects; assisted in the purchase, delivery, and installation of all FF&E for the hotel projects; and prepared monthly status reports on the projects for the owners to discuss any issues, seek required approvals, etc., thereof.

 

Market Research for Luxury Hotel in the Caribbean

Undertook a market overview summary of an island in the Caribbean in general and the local tourism/hotel industry in particular to establish the viability of a site for an upscale destination resort and the island as a five star destination into the future. Based on the foregoing, we undertook the appropriate analysis to provide the following:

 

  • Opinion of viability of the proposed site for hotel use
  • Summary of historic and future economic and development trends for the island
  • Summary of historical island-wide hotel performance including occupancy, average room rate, and REVPAR
  • Summary of historical luxury hotel performance on island including occupancy, average room rate, and REVPAR
  • Fair share analysis of the island's hotel sector compared to its primary competitive Caribbean destinations, with a focus on the luxury sector to see if its competitive position is increasing or decreasing and why
  • Identification of other proposed luxury hotels likely to be developed on the island and probability of coming to fruition over the next several years
  • Estimated growth in luxury resort destinations on other Caribbean islands over the next five years and the potential impact to the island's luxury hotel sector as a result
  • Estimated growth trends in visitor counts, hotel supply and demand, average room rates, and REVPAR for the island over the next five to seven years
  • General opinion as to the advantages and disadvantages of the island's tourism industry in general and the luxury segment in particular relative to competing Caribbean destinations over the next five years

 

On-Going Advisory Services for Development of Restaurant Chain

Brought multi-unit restaurant operational experience, concepting, and design consultancy to bear in creating and analyzing the startup of a full-service, casual restaurant chain with a sports theme concept. To date, the company has developed 11 of 100+ planned units nationwide, with an active pipeline. REVPAR International provided advisory services relative to assisting in the initial business planning process, reviewing appropriate restaurant concepts and evaluating pertinent industry trends/metrics. We prepared market and financial reviews for each location and our studies included trends in the national and local market regarding food and beverage to make sure that the concept maximized its appeal to the targeted user population; competitive analysis; summary of pertinent lease terms and lease income; preparation of estimated financial operating performance including IRR and Net Present Value analysis; and listing the tangible and intangible factors affecting the various ownership/operating options that should be evaluated prior to making a final decision on which option is the most appropriate. REVPAR International is currently providing ongoing advisory assistance to the ownership group as the company continues to grow and the number of units increase.

 

 

 

 

 

 

 

 

 

 

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