03-05-07 Special Called Joint Meeting of the La Porte Development Corporation Board of Directors and the La Porte City Council Minutes

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HOTEL MARKET ANALYSIS IV-4 The existing hotels have experienced occupancies in the upper 60's and low 70's, except for 2003 and 2004 during the national recession. This reflects the strong corporate demand in the primary market area. The large increase in occupied rooms in 2005 shows the resurgence of the petrochemical industry in response to the strong Texas economy. Although rates have increased throughout the period, rates in the $50's indicate the type of properties available and the price sensitivity of the demand that is not leaving the market. However, average rates were as high as $90 at the more upscale properties. . Year Available Percent Market Occt.ipi811 pe:t:l"! ' Market Percent RevPAR4 Rooms Change OCC.%1 Rogm~ "" Ch "Il ADR3 Change 2002 762,120 --- 61% 462,600 --- $106 --- $64 2003 762,120 0.0% 60% 455,700 -1.5% $109 2.8% $65 2004 835,485 9.6% 56% 467,900 2.7% $114 4.6% $64 2005 847,530 1.4% 61% 520,400 11.2% $120 5.3% $74 2006 847,530 0.0% 64% 540,700 3.9% $129 7.5% $82 CACs 2.7% 4.0% 5.0% 6.4% 1 Rounded to the nearest whole percent 4 RevPAR = Occ. x ADR using rounded numbers 2 Rounded to the nearest hundred 5 Compound Annual Change 3 Rounded to the nearest whole dollar Source: Smith Travel Research & PKF Consulting Estimated Historic Market Performance Proposed Sylvan Beach Hotel C bl H t I Occupancies have remained around 60% at the comparable properties, which is indicative of the seasonality of demand in a strongly leisure oriented market. In 2006, rates ranged from $110 to $160 at the comparable properties with an average of $129. This is a good indication of the potential rates that would be obtainable at the subject property. Estimated Historic Market Performance Proposed Sylvan Beach Hotel Com etitive Hotels Outside the Market Area 2.4% 2.4% 0.0% 0.0% $86 -3.1% $92 2.0% $95 13.8% $100 2.9% $104 3.7% 4.9% 4 RevPAR - Occ. x ADR using rounded numbers 5 Compound Annual Change 7.0% 3.3% 5.3% 4.0% 1 Rounded to the nearest whole percent 2 Rounded to the nearest hundred 3 Rounded to the nearest whole dollar Source: Smith Travel Research & PKF Consulting Occupancies at the competitive hotels reached the upper 60's in 2006. Since these properties are located outside the market area, they do not reflect the strength of the primary market area. Rates are less than the comparable properties because of the range in the type of hotels in this sample.