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-5 MARKET DEMAND SEGMENTATION The market demand segmentation for the existing area hotels, comparable hotels and competitive hotels located outside the market are illustrated in the following table. Market Demand Segmentation Existing1lll1' If ; " Area '~~;i Co ...e Competitive Market Segment HoteJ!;, .""M" ~ ~;~it._ Hotels Corporate 70% 28% 56% Group Meeting 20% 42% 29% Leisure 10% 30% 15% Total 100% 100% 100% Source: PKF Consulting The mix of demand for the existing area hotels is a good indication of the mix of demand located in the primary market area. Discussions with the local hotel representatives indicated that the higher rated properties are able to attract the less price sensitive engineers that are not leaving the market and international visitors to the Port and petrochemical industry, whereas the lower rated properties cater to the construction workers and trucking industry. The existing hotels have a limited amount of meeting space which restricts the ability to capture corporate meeting demand. The properties that had meeting space indicated that they receive many requests for meeting space that they are unable to accommodate. The mix of the comparable properties shows their orientation toward the group and leisure markets. Corporate demand in these markets is not as strong as in the primary market area. Competitive hotels located outside the market area have stronger corporate and group markets, somewhat similar to the primary market area. ADDITIONS TO SUPPLY The proposed Sylvan Beach hotel is estimated to open in January 2010. We were unable to identify any definite plans to develop another upscale, full-service hotel in the primary market area. A local developer is considering the development of a hotel on the La Porte Bayfront near the municipal golf course but plans are preliminary at this time. There are several select-service and extended-stay hotels in different stages of development in the market area. There are two Value Place extended-stay hotels currently under construction, one in La Porte and one in Pasadena. A Quality Inn is being developed on Fairmont Parkway in Pasadena. A Hampton Inn is in the preliminary planning stages in La Porte south of the La Quinta on SH 146.