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• r _ HGTEL DEVELOPMENT: ASSESSING THE MARKET i:by_i,al hotindaries and topographical fen- lodging facilities in the market area. This ; ing concentration aind development in or1110 - tures. and review surrounding land use. list of competitive properties is valuable der to put the subject (proposed hotel) it •:h((nid analyze the site's relation to I not only for determining market feasibility into context. market generators (attractions, major hut also for establishing marketing strafe- 1i ur direct competition --- that is. prop- ' modes of transportation). gies. A feasibility report can help you de- ernes that will he competing with you for ' 1%tn need to know how market genera- I )ermine: the s:ime markets ---is defined by c•onsid- t,,rs and modes of transportation relate • The type and volume of demand for ering these factors: to the site's accecsihility. Part of the ap- both lodging and food service faciii_ -- Date opened 1, :,l' 1 a '-elf contained resort. convention Iles. I Percentage` of occupancy I hotel or conference renter may he (lis- • The adequacy with which the cool- 1 - l.ra';Ition t:mre from main traffic arteries. The op- petition satisfies the demand. -- Room rates p'usite may be true of hotels dependent • The strengths and limitations of the -- Market mix . on antornohile travelers who are sensitive competition. -- Facilities and services to a hotel's accessibility. • The paints of difference that must i'h}•siral condition of facilities , in the latter case, a market study he established between your hotel • Chain or referral affiliation =herald detail planned changes to road- and the competition. -- Perception among guests u.at•s and streets that provide access to The last item can form the foundation The precise natter of the hotel you the project site: to bypasses being (lis- for your marketing strategy development. propose to create u•will determine the ,;s..ed and their potential impact. ....._ _ - _ I emphasis you place on each of these . The report should analyze ease of site factors. ingress and egress. Turning against nn- Vour consultant should analyze the ef- (ocning traffic or having to cope with one- feet that your new property.• will have on '.a greets may he bothersome but not ‘Cnalyzing differences I existing competition. For example. a hotel n''r•ssarily damaging to business. in alocated next door may be v aluatel as between you and your highly competitive market, however, re- non-competitive because of ,art-dated <Irarttons on turns into or out of the site competition can help form I furnishings or a reputation for poor ser- a.- 'yell as other inconveniences in accessvice. Rut what if competition fr:•rn you ?nay affect the level of business. your marketing strategy s I prompts the competitor to refurhi- 1 and foundation. ,..1 update his services and marketing st:-lte- VISIBILITY gies? • Even though most travel today is with ---- - — - - POTENTIAL COMPETITION a'hanre reservation, site visibility may he an important factor for a roadside opera- The report can help you in such areas as A further consideration in the Supply lion. particularly if there is no other way facility concept and design, pricing, ad- and Demand Analysis in a market study to provide motorists sufficient warning to i vertising and promotion strategies. and is a report on future accommodations in exit on the proper access route. This operating policies. (See "Sources of in- various stages of development: (I)under could affect reservations and walk-in husi- fornntion" under "Market Supply and discussion: (2) announced: and ( 3) al- nes, Demand...) ready tinder construction. Not all lodging projects that are pro- ADANIABILITY PRESENT COMPETITION posed (or even ill actually be built. Projectsrthat already nounced) "have build- \ market study to determine whether You should assist your consultant (con- ing permits and financing are likely cont- 'h' re i-z a strong enough customer base suiting firm)as much as possible in evalu- petition. Projects merely "under discus- , !o. <nt,port a hotel may also contain ating existing lodging properties and in sign" should he analyzed by your consul- 'tmnlendations on the adaptability of identifying potential competitors. tint in terms of probable completion. the ,ate for the proposed hotel. The consultant, on the other hand. Factors are (1) principals involved: (2) The '(msultant should review the int- should research other types of conlpeti- management affiliation, and(3)economic i'a'-t of environmental items on the site. live enterprise (e.g., condominium ren- j climate. (See "Sources of information.") i•-,r example, what are the potential (lis- tals in a resort area) that you Wright have turhanres caused by,the traffic noises? overlooked as possibly competitive. Whether the Consultant or your own Your report should analyze lodging de- T et us review briefly what has been dis- ' an hiterts and attorneys examine building velopment in the competitive area in rela- Lcussed about the requirements of a (ides aril zone restrictions is up to you, lion to t ype, size, location and class. I market report and what is necessary to if you are commissioning the market Since in America—by contrast to Europe consider further. ,.ttl'iy. The purpose of such an exanrina- -- there is no government or industry The Market Area Characteristics tion 'AI nld he to determine if the size and classification of hotels. "class" is often ' portion of a report defines the market shape of the land are suitable for the par- defined in terms of the level of room areas within which the proposed hotel will titular fcility. rates. function. it also indicates the economic ID The consultant usually evaluates exist- base which, in most cases.affects transi- ing lodging facilities by such means as on- eat business and food and beverage Supply and Demand site inspections. reviews of directories I patronage. (See above: population, in- (chain, Mobil, AAA)and interviews with come. employment. retail sales.comnter- A Supply and Demand Analysis in a property managers.Then coniesI a group- cial and industrial activity, tourism and 1 market report inventories competitive ing of the total supply into centers of lodg- I transportation.) Contour,/ ')R i Oncit\m./NTf1VFmnFR 1c)R7