Sheraton Hotel Redding At Sundial Bridge - Redding Record ...

6. Supply and Demand Analysis
Definition of Subject
Hotel Market
Historical Supply
and Demand Data
In the economic principle of supply and demand, price varies directly, but not
proportionately, with demand and inversely, but not proportionately, with supply.
In the lodging industry, supply is measured by the number of guestrooms
available, and demand is measured by the number of rooms occupied; the net
effect of supply and demand towards equilibrium results in a prevailing price, or
average rate. The purpose of this section is to investigate current supply and
demand trends as indicated by the current competitive market, and set forth a
basis for the projection of future supply and demand growth.
The Redding, California area lodging options include a variety of limited- and fullservice
properties that accommodate three market segments: leisure guests,
commercial drive-through travelers, and group meetings. For the purposes of this
analysis, the supply of existing hotels includes limited- and full-service branded
and independent properties located mostly along Hilltop Drive and Interstate 5
ranging in age from three to 41 years old, and the newly opened Fairfield Inn,
which opened in May 2010. The competitive set accommodates primarily leisure
travelers visiting the area and commercial travelers driving through the area from
other major cities such as San Francisco and Seattle.
Smith Travel Research (STR) is an independent research firm that compiles and
publishes data on the lodging industry, routinely used by typical hotel buyers. STR
has compiled historical supply and demand data for a group of hotels considered
applicable to this analysis for the proposed subject property. This information is
presented in the following table, along with the market-wide occupancy, average
rate, and rooms revenue per available room (RevPAR). RevPAR is calculated by
multiplying occupancy by average rate and provides an indication of how well
rooms revenue is being maximized.
February-2011 Supply and Demand Analysis
Sheraton Hotel Redding At Sundial Bridge – Redding, California 46