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Hotel Industry Update for DuPage County

Hotel Industry Update for DuPage County. The building will continue until morale improves. Compiled By Ric Mandigo – Senior Consultant Presented by Ted Mandigo – Director of TR Mandigo & Company TR Mandigo & Co. www.trmandigo.com 630 279 8144.

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Hotel Industry Update for DuPage County

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  1. Hotel Industry Update for DuPage County The building will continue until morale improves. Compiled By Ric Mandigo –Senior Consultant Presented by Ted Mandigo –Director of TR Mandigo & Company TR Mandigo &Co. www.trmandigo.com 630 279 8144 Thursday, August 23,2012

  2. Since April 2011, we’re down 9 hotels. Since December 2010, we’ve lost 1300 rooms.That’s arguably good news.

  3. DuPage has had a modest growth in demand of about 2.1%, but supply exploded throughout the 80’s and 90’s.The large new hotels came online just before the recession, which hurt overall occupancy more than lower demand.

  4. Compared to the Downtown and airport markets, DuPage’s success is more closely tied to mid-range business. It dropped lower and has taken longer to recover.

  5. We’re coming out of the recession slowly. Each month, on average is better than the year before.

  6. Notes on Projections • We lost a lot of ground on ADR during the recession, so it will take some time for rate to recover. • Our projections are essentially unchanged from February. • We anticipate that economic activity and commercial demand increases should make up for additional supply. • Historically, we have overestimated ADR and underestimated occupancy. We have been fairly accurate with RevPAR, within .5%.

  7. Our Projections going forward are fairly conservative.

  8. Full service and Extended Stay are anticipated to perform somewhat differently from the overall market

  9. Trends moving forward: Slow growth in occupancy: Around 2% compound annual rate. Growth in Rate at 3% annually, will take until 2014 to get back to 2007 levels RevPAR growth at about 4.5% annually, with fairly steady growth rate. Increased leisure and group leisure Continued pressure on ADR for corporate rate business

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