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This section explores market opportunities for new lodging accommodations in the downtown area. It will help you understand travel and visitation trends, existing competition, traveler market segments in the area, and projected room night demand. This section will help you project the occupancy and average room rate, key variables in determining the viability of a new hotel downtown.
Hotels can be an extremely valuable addition to a downtown area. They bring leisure visitors and business people to the heart of a community. They can fill a compelling market need by accommodating visitors to area businesses and institutions. Hotels can generate sales for nearby retail and service businesses and capture tourism dollars in the community. Hotels also generate significant tax revenues while creating many new jobs for local residents.
Because of their central location, downtowns often provide great market opportunities for hotel development. Downtown sites are typically within close proximity to businesses and industry, colleges, hospitals, attractions, services and entertainment. These are important generators of room-night demand.
Market conditions in your area have a significant impact on the feasibility of a new hotel. The strength of the local lodging market affects how many rooms you can sell and the rates that you can charge. This section will help you analyze your market so that you can gauge the market potential of a new lodging facility in your community. This analysis is especially important in demonstrating the potential of downtown locations, as many lodging developers often prefer suburban or highway sites.
This section will help you collect and analyze information as part of a lodging market analysis. The analysis is tailored to the hotel/motel industry and should answer the following:
What trends are occurring in the lodging industry?
Are local economic and visitation trends favorable?
Who are the competitors and how successful are they?
What are the potential lodging market segments in the area?
What occupancy and average room rate could a new property achieve?