Source PKF Consulting COACHELLA VALLEY AUGUST 2006

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					                             COACHELLA VALLEY                                  AUGUST 2006

                           Hotel Rooms Will Be Easier, But Not Easy, To Find
                                                    PKF Hospitality Research

After three consecutive years of strong increases in               travelers should still expect to face capacity situations in
occupancy, U.S. lodging owners, operators, and guests may          most cities," Woodworth noted.
find major city hotel lobbies a little less crowded in 2007.
While the number of hotel rooms occupied will continue to          "While our research shows that the national lodging industry
grow at a 1.4 percent pace, the number of new                      generally follows predictable cycles, it is also true that each
accommodations is projected to increase by 2.0 percent in          individual market's cycle has its own unique rhythm,"
2007. The net result is a forecast of a slight 0.6 percent         Woodworth said. "Therefore, even with a decline forecast on
decline in occupancy for the nation's largest lodging markets.     a national basis, we are projecting that 24 of the 52 cities we
This analysis is based on the summer 2006 edition of Hotel         track will experience an increase in occupancy during the
Outlook , an econometric forecasting model developed by            upcoming year."
PKF Hospitality Research (PKF-HR) and Torto Wheaton
Research.
                                                                   Extraordinary events can have an effect on a hotel market's
                                                                   performance and disrupt traditional performance patterns.
"Following three years of strong increases in all industry         "When looking at markets that are forecast to experience the
performance measurements, it would be natural for market           greatest declines in occupancy next year, it is interesting to
participants to assume that such robust times would                note that most are located in cities that have been heavily
continue, especially those who are new to the industry," said      impacted by hurricanes in the past few years. The temporary
R. Mark Woodworth, president of Atlanta-based PKF-HR.              housing of displaced citizens, relief and construction
"The fact is that we are approaching the peak of the current       workers, insurance adjustors, convention delegates, and
business cycle, and a slowdown in the pace of growth would         sporting event spectators has caused artificial ripples in the
not be difficult to imagine. That being said, the U.S. lodging     typical business cycles of several Gulf Coast, Southeast,
industry is still forecast to realize continued growth in          and South Central lodging markets," Woodworth observed.
revenues and profits."
                                                                   Another factor influencing the forecast moderation in
Hotel Outlook is an econometric forecasting model                  occupancy rates is that most cities have reached, or are
developed jointly by PKF-HR and Torto Wheaton Research.            approaching, their realistic capacity levels. "Based on their
The model is based on historical data from Smith Travel            historical demand mix and seasonality patterns, markets
Research and economic inputs from economy.com. Hotel               have established theoretical maximum occupancy
Outlook forecasts provi de six years of supply, demand,            thresholds," Woodworth notes. "Occupancy rates will not
occupancy, average daily rate (ADR), and RevPAR                    continue to grow indefinitely."
information for 52 major markets across the United States.
The data and forecasts are updated each quarter.
                                                                   Budget Assistance

Occupancy Still Strong
                                                                   "Although it is only July, accountants across the nation are
                                                                   busy preparing budgets for 2007," said Robert Mandelbaum,
While occupancies in U.S. cities are forecast to decline 0.6       director of research information services for PKF-HR. "For
percent from 2006 to 2007, the average occupancy rate is           financial managers at the country's largest companies,
still projected to be a healthy 68.0 percent in 2007. This level   budgeting means putting the pencil to corporate travel
of performance is well above the long-term average of 66.4         expense accounts. Meanwhile, deep in the basements of
percent. In fact, 68.0 percent occupancy has only been             their properties, hotel controllers are preparing estimates of
topped five times on the past 18 years.                            revenues, expenses, and profits for the upcoming year."

"At 68.0 percent, the average hotel will have a few more           >>>Continued on Page 4>>>
rooms available to sell in 2007 versus this year. However,

                                                 Source: PKF Consulting
Statistics And Trends Of Rooms Business In Coachella Valley
PKF Consulting

BY LOCATION              AVERAGE DAILY RATE           OCCUPANCY PERCENT                    REVPAR
                         2006   2005    VAR           2006   2005  VAR             2006      2005      VAR
MONTH OF AUGUST 2006
PALM SPRINGS              $81.15    $75.21    7.9%   50.84%    48.86%     4.1%    $41.26    $36.75 12.3%
PALM DESERT              $101.23   $102.61   -1.3%   47.92%    53.01%    -9.6%    $48.51    $54.40 -10.8%
OTHER COACHELLA VALLEY    $95.04    $92.61    2.6%   54.51%    53.66%     1.6%    $51.81    $49.70   4.2%



      OVERALL AVERAGE    $92.36    $90.32    2.3%    51.52%    51.98%    -0.9%    $47.59     $46.95     1.4%

                         AVERAGE DAILY RATE           OCCUPANCY PERCENT                    REVPAR
                          2006  2005    VAR           2006   2005  VAR            2006      2005  VAR
JANUARY TO AUGUST 2006
PALM SPRINGS             $116.33   $105.65   10.1%   64.01%    62.42%     2.5%    $74.46    $65.95    12.9%
PALM DESERT              $166.08   $162.06    2.5%   64.92%    67.26%    -3.5%   $107.83   $109.00    -1.1%
OTHER COACHELLA VALLEY   $168.61   $164.07    2.8%   69.92%    69.23%     1.0%   $117.90   $113.59     3.8%



       OVERALL AVERAGE   $152.75   $146.91    4.0%    66.82%    66.65%    0.3%   $102.06     $97.92    4.2%
  Statistics And Trends Of Rooms Business In Coachella Valley
  PKF Consulting


BY RATE                      AVERAGE DAILY RATE          OCCUPANCY PERCENT                       REVPAR
                             2006   2005    VAR          2006  2005   VAR              2006      2005   VAR
MONTH OF AUGUST 2006
Less than $60.00              $47.68    $46.00    3.6%   54.87%    55.63%     -1.4%     $26.16    $25.59 2.2%
$55.01 - $100.00              $87.83    $83.14    5.6%   49.47%    47.25%      4.7%     $43.46    $39.29 10.6%
$100.01 - $150.00            $112.56   $111.35    1.1%   51.74%    53.96%     -4.1%     $58.24    $60.08 -3.1%


          OVERALL AVERAGE     $92.36     $90.32   2.3%   51.52%    51.98%     -0.9%     $47.59    $46.95     1.4%


JANUARY TO AUGUST 2006
Less than $60.00              $50.44    $47.80    5.5%   75.71%    76.04%     -0.4%    $38.19     $36.34     5.1%
$55.01 - $100.00              $77.83    $74.75    4.1%   54.96%    55.86%     -1.6%    $42.78     $41.76     2.4%
$100.01 - $150.00            $132.99   $122.48    8.6%   62.72%    61.19%      2.5%    $83.41     $74.94    11.3%
$150.01 - $200.00            $183.03   $177.12    3.3%   68.43%    67.56%      1.3%   $125.25    $119.66     4.7%
Over $200.00                 $207.33   $203.33    2.0%   67.42%    68.97%     -2.2%   $139.78    $140.23    -0.3%


           OVERALL AVERAGE   $152.75    $146.91   4.0%    66.82%    66.65%     0.3%    $102.06     $97.92     4.2%



BY SIZE                      AVERAGE DAILY RATE          OCCUPANCY PERCENT                       REVPAR
                             2006   2005    VAR           2006 2005   VAR              2006       2005  VAR
MONTH OF AUGUST 2006
Under 100 rooms               $74.60    $69.46    7.4%   53.51%    49.56%     8.0%     $39.92     $34.43    15.9%
100 - 199 rooms               $72.85    $69.76    4.4%   49.08%    49.39%    -0.6%     $35.76     $34.45     3.8%
Over 300 rooms               $108.50   $107.04    1.4%   52.74%    54.24%    -2.8%     $57.22     $58.06    -1.4%


           OVERALL AVERAGE    $92.36    $90.32    2.3%   51.52%    51.98%    -0.9%      $47.59     $46.95     1.4%




JANUARY TO AUGUST 2006
Under 100 rooms              $111.03   $104.28    6.5%   67.94%    64.43%     5.5%     $75.43     $67.19    12.3%
100 - 199 rooms              $111.79   $104.84    6.6%   64.73%    64.79%    -0.1%     $72.37     $67.92     6.5%
Over 300 rooms               $188.04   $182.41    3.1%   67.98%    68.38%    -0.6%    $127.83    $124.74     2.5%


           OVERALL AVERAGE   $152.75   $146.91    4.0%   66.82%    66.65%    0.3%     $102.06    $97.92      4.2%
>>Continued from Cover Page>>

PKF-HR has performed research that reveals that, on average, 70 percent of the performance achieved at the
property level is systematically related to the economic health of the metropolitan area in which the hotel is located.
Stated differently, on average, only 30 percent of the results ultimately achieved at the unit-level are controlled by
property management.

"With this in mind, hotels need to have a complete understanding of the direction in which their overall market is
heading. Secondary source market forecasts like Hotel Outlook reports can be invaluable tools in helping hotel
managers and other interested parties to establish a much more rigorous foundation for their future year operating
and travel budgets," Mandelbaum concludes.




                                              Source: PKF Consulting
                                                           ***
To order a Hotel Outlook forecast for your market, please visit the firm's online store at www.pkfc.com/store, or call
Brandon Culp or Claude Vargo at (866) 842-8754.

PKF Hospitality Research (PKF-HR), headquartered in Atlanta, is the research affiliate of PKF Consulting, a consulting
and real estate firm specializing in the hospitality industry. PKF Consulting has offices in New York, Philadelphia,
Washington DC, Atlanta, Indianapolis, Houston, Dallas, Los Angeles, and San Francisco.




                      is compiled and produced by PKF Consulting. Readers are advised that PKF
Consulti ng does not represent the data contained herein to be definitive. Neither should the contents
of this publication be construed as a recommendation of policies or actions. Quotation and
reproduction of this material are permitted with credit to PKF Consulting.