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Ida Forecast of Future Changes <br /> Occupancy <br /> r • <br /> With the known changes to the lodging demand and the anticipated changes to the <br /> lodging supply, we prepared a model of the PRIMARY COMPETITOR lodging situation <br /> to reflect our forecast of future changes. <br /> When we prepare a forecast of supply and demand changes, our goal is to establish <br /> I a knowledgeable view of the market trends to make future assumptions based on this <br /> knowledge. <br /> I For the purpose of this update, we have established that the demand for lodging in with. <br /> 9 9 <br /> the PRIMARY COMPETITORS was quite strong in its growth in 1998. However, we . <br /> feel it is both conservative and prudent not"to anticipate the same growth strength in <br /> r future years. <br /> In 1998 the demand for lodging had increased by 5.9% to generate an additional <br /> '. 20,604 occupied guest rooms. We anticipate thatgrow <br /> .the demand will continue to <br /> but in a more conservative fashion. For the purpose of this presentation we have <br /> forecast the demand to show the following changes. <br /> iz-: Percent Increase New Occupied Rooms Primary P Com petitor <br /> Average Occupancy <br /> 1999 4.5 16,727" 65.5 % <br /> 2000 3.0 11,653 64.4 <br /> 2001 2.5 10,002 64.0 % <br /> 2002 2.0 8,202 65.3 % <br /> ,,f,: During our update we have factored two changes into the lodging supply. One•is the <br /> `' new Hilton Garden Inn that is due to open in the spring of this year in Shoreview. This <br /> 100 room hotel is being position as a limited service hotel in the Upscale price tier. <br /> As a limited service hotel the Hilton Garden Inn will not be a primary competitor to the <br /> new Americlnn in Mounds View.but it will impact the primary supply. It will do so due <br /> <," - to its price tier positioning as an Upscale hotel. While the most immediate effect will <br /> be on the other limited service hotels throughout the demographic area, there will be . - <br /> some impact on the Hampton Inn Shoreview and the Holiday Inn Arden Hills. <br /> For the purpose of this presentation we have used half of the hotel, or 50 guest <br /> r, rooms, as future supply impact to the PRIMARY COMPETITOR supply group. The new <br /> i supply is divided into 1999 and the year 2000 when the new rooms impact the <br /> existing supply. " <br /> s <br />