Overview: Whether the subject property is located close to home in Illinois, or in a different region of the nation, we face the challenge of understanding the industry and market demands.

Success: Everyone knows Orlando, Florida is the home several large amusement parks, which in combination with a warm climate makes it a tourist friendly region.  When we were asked to appraise a Hotel in Orlando we did thorough research to demonstrate exactly what sets one hotel apart from the hundreds in the region as demonstrated in the excerpt below:

"There are four lodging facility (hotel/motel) categories segmented by price:  Budget/economy, mid-market/mid-price, upscale, and all-suite.  The subject is classified in the mid-market/mid-price segment, which is a fairly broad category that includes limited and full service hotels.  Brands included in this segment are Quality Inn, Hampton Inn, Holiday Inn Express, Fairfield Inn, Hilton Garden Inn.  Examples of budget hotels are Motel 6 and Super 8, while more upscale hotel chains include Hyatt, Crowne Plaza, and the Courtyard Marriott and Sheraton Hotel.  All-suite hotels include extended stay hotels with limited service such as Embassy Suites and Homewood Suites by Hilton.  

The subject is a [chain hotel name], a limited service interior corridor hotel, part of the [sic] network.  [The hotel network] currently franchises more than 5,200-hotels including more than 4,000 in the United States.  These hotels are located throughout the U.S. and in 40 other countries and territories.  Relationships with banks and airlines are part of promotions.  AAA travel agents have given the network a 92% rating where customers are at a minimum “satisfied” with their stay. 

Typically limited service hotels have 290-average square feet per room.  The building size, ancillary site and amenities such as a pool are typical for this hotel segment.  Few services are provided though complimentary breakfast is often included in the room rate.  For budget or economy facilities, the typical room size is 250-square feet.  These are older declining properties in sub-par locations or they are unflagged.  Full service hotels have a larger average room size than limited service with 330-square feet.  These hotels typically include a restaurant and/or lounge and meeting rooms.  Upscale and all-suite rooms are also larger on average. 

This is an area conducive to lodging facilities adjacent to the Universal Studios campus.  There are more than 10 hotels and motels within one-mile.  These include similar mid-price lodging facilities such as La Quinta Inn, Baymont Inn and Suites, the Holiday Inn, Best Western, Extended Stay, Comfort Inn and the Wingate Inn adjacent to the subject on the west.  The area competition shows varying annual averages from 50% to 70% (based on our survey), but according to the September 2006 Monthly STAR Report for the subject (Smith Travel Research), the competitive set (13 properties with a total of 2,103-rooms) shows a year-to-date occupancy of 70.9% while the subject according to the report shows a higher 74.6% year-to-date occupancy.  The average daily rate (ADR) for the subject is $54.66 per room (ytd), while the competition is showing an ADR of $64.42 per room (ytd).  Again RevPAR or revenue per available room is lower for the subject at $40.79 while the competition’s RevPAR is $45.66.  Overall, demand has seen a slight decrease for midprice chains in the Orlando market like the subject.   

In the Orlando market, there are 17 properties under construction that will bring 2,168-rooms online.  There are currently 454 hotel properties with 110,306-rooms available in the Orlando market.  Approximately135 of these properties are midprice and 13 directly compete with the subject.

All of the hotels have one thing in common and that is they cater mainly to visitors of the area’s attractions and particularly Universal Studios.  However, for example, the Wingate Inn has a business center, which attracts business-trip clients.  Typical room amenities include a hair dryer, iron and ironing board, coffee maker, AM/FM clock radio, telephone, cable television, and high-speed internet access.  Some offer free wireless internet access in the rooms but most just offer it in the common areas.  Each has a swimming pool.  Similar discounts are offered and each offers complimentary breakfast.  On-site parking is free and there is typically shuttle service provided by each hotel to and from the airport."