exceed strategic plan sample

8/3/2019 Exceed Strategic Plan Sample

1/16

eXceed Asset Management CONFIDENTIAL Page 1

Strategic Plan 2007HOTEL A

Property Summary

HOTEL A (50)City, St

Asset Manager: ___________

2006F Occ / ADR / RevPAR:

2006F NCF $ (%):

2006F EBITDA $ (%):

Opened: 2005

Rooms (suites): ----

Floors / Bays: 7 Floors

Meeting Space (per room):

190,000 sf total; Indoor: 69,447 sf, incl. 3 ballrooms(Ballroom 1: 24,644 sf, Ballroom 2: 14,168 sf,Ballroom 3: 3,402 sf); Outdoor: over 100K sf inseven themed function areas.

Acquisition Date: ----

Acquisition Price (per room): ----

Property Rights: Fee Simple

Acreage (% Improved): 10 acres

Location: Resort

Debt:$200 million / 5.08% / Maturity Date: ---- --

Term Five years

Exhibit E Provision: n/a

Manager (Franchisor): HOTEL Brand Name

Alternate Uses: N/A

GRADE Market: A- Location: A Property: B+

Hold Recommendation: Long Term HoldUpdated:


2/16



Executive Summary

Asset Positioning. Opened in January 2005, the HOTEL A Resort and Spa

(the Resort) enjoys an ideal setting on 250 picturesque acres in City, ST.The ---- unit, four-star Resort is part of the ---- acre master planned Luxurycommunity, which features upscale residences, shopping and restaurants.The Resort offers premium guestroom accommodations and resort facilitiesincluding a ----- hole golf course, a ---- square foot spa, ---- square feet ofindoor and outdoor meeting space and ---- swimming pools. As part of a"Sense of Place" theme, the resort pays tribute to the people, landscape, andevents that shaped the State's cultural heritage.

Market Outlook. The City, St (City, ST) economy is booming. Jobs,income, and population are all expanding at a rapid clip. Even the batteredmanufacturing base is showing signs of a revival, providing an additional

source of growth. Other positive developments include a turnaround ininformation employment and a stronger pace of hiring in office-intensiveindustries.

Capital Project Plan. The property is new and in very good condition.There will be a need to redo the rooms in 2009. The property needs asignificant upgrade to the landscaping package and there is an opportunityfor us to add time share product to this development. We will also need toaddress the pool, spa and possibly meeting space over the next few years.

Risks. There are several risks associated with this property. The first is thatthe hotel is somewhat dependent on the PCVO business provided by the

Parent Company. With the timeshare units at the property currently sold out,it is likely that the Parent Company will shift this business to anotherproperty. The property also has limited outdoor function space and a weakermeeting space to rooms ratio than its primary competition, which limits thepropertys upside as there is little room for growth on the group side of thedemand equation. The property has risks associated with the potentialclosure of the pool to fix the leaks in 2009 and has capacity issues with thepool and spa areas that limit the properties growth and guest satisfaction.Recently, the Competition Hotel in downtown City agreed to card checkneutrality in order to gain the development rights for the convention hotel,introducing the union potentially to this market.

Ground Lease. None.

Recommendation. This is an extraordinary asset in a strong market andshould be considered a long term hold. The property has potential toimprove the leisure transient segments of its business to drive profit. Thereare development opportunities that we will explore with time share and spain 2008 and 2009. We will also take a long term view on analyzing the needfor meeting space to make the property less vulnerable to supply additionsand downturns in the market.


3/16



SWOT Analysis

STRENGTHS

---- acres of fee simple real estate in the heart of City, St, a premier resortdestination for group and leisure travelers

Age (2 years) of resort no functional obsolescence issues

Excellent meeting space platform

Hotel Brand & Parent Company management

Strong national and international airlift

Despite seasonal climate, year-round recreational opportunities in market, includingover ---- golf courses Excellent support amenities (entertainment, restaurant, retail)

PCVO (timeshare) and residential community provides incremental demand forresort (rooms, F&B, golf, spa)

Strong and diverse local economy

WEAKNESSES

Spa & pool potentially undersized

Lodging market seasonality

OPPORTUNITIES

Capitalize on what is anticipated to be a strong 2-3 year growth period for theCity, St resort market

No new major resort supply planned for development in the foreseeable future

Market exhibited strong occupancy growth in 2006; ADR growth will be the

focus for 2007-2009 Resort still in ramp-up mode, particularly in ADR relative to comp set

Timeshare/residential development on-site, with associated room night, F&B andgolf demand (pending zoning, feasibility)

Management Agreement terminable upon sale starting in 2013

Management Agreement provides for Owner to charge an asset management feeof 0.5% of Total Revenues

Large Sporting Event hosted by City in ---

THREATS

Construction of new ---- sf ballroom at Competition Hotel A

Opening of ---- room Competition Hotel B Downtown in late----

Nearby City with Large Tourist Attraction

Potential phasing out of PCVO-related room night demand

City, St viewed as a significant opportunity by labor unions.


4/16



Lodging Market Competitive Landscape

Competitive Supply

Meeting Space Better / Worse than Host Hotel

Property RankYearOpen Rooms

Total(Indoor)

PerRoom Rooms

MeetingSpace Location Amenities Comments

HOTEL A 5 --- --- --- ---

HOTEL B 3 --- --- --- --- Great meeting space and strong namerecognition

HOTEL C 1 --- --- --- --- Premium luxury product in the marketHOTEL D 4 --- --- --- --- Best meeting space platform and superior

pool and spa experience

HOTEL E 6 --- --- --- --- Good reputation, getting old despite new spaHOTEL F 2 --- --- --- --- Wins on leisure transient and excellent

relationship with incentive travel groups

HOTEL G 7 --- --- --- --- Great history, planning major reinventionthat would improve its competitivenesssignificantly

Changes in Supply

Meeting Space

PropertyOpening

Date Rooms TotalPer

Room Comments

HOTEL H --- --- --- --- Formerly the Hotel H1 Resort, this property has been closed since May of 2005 and is goingthrough major reconstruction and renovation.

HOTEL I --- --- --- --- $200M development will include 25 luxury condos, a restaurant, 2 bars and a spa, located nearHOTEL D.

HOTEL J --- --- --- --- $70M repositioning will be created around it's h istoric past of the '50's with an updated modern andminimalist styling. This hotel is located in Downtown City, St and will compete with the Hotel L andthe new Hotel M opening in 2009.

HOTEL K --- --- --- --- We do not believe this hotel would represent a direct competitive threat to the Property due to itslocation, lack of resort amenities, market orientation, and pricing s tructure.


5/16



Guestroom

Suite ASuite B

Lobby


6/16



Ballroom1 Ballroom 2

PavilionBoardroom


7/16



Dining Room Lounge

Caf Bar


8/16



Spa

Golf Club

Adult Pool

Pools


9/16



Capital Investment Strategy

Capital Investment

Rooms Very good condition

4-fixture baths; thresholds/door sweeps needed underentry and connecting doors to solve noise transmissionissue; digital thermostats recently installed; guestroomlighting retrofit an opportunity; suites have a bar that isconstructed with a laminate top and low grade cabinet upgrade during redo

Meeting Space Very good condition

Carpet in pre-function areas and Ballroom 2 showing somewear; Temporary pavilion atop Ballroom 2 is used approx 6months/yr ($300K in rent); This was NOT constructed to

support additional levels - designed only to support thecurrent tent load with occupants

Public Space Very good condition

Potential opportunity to activate and increase outdoorseating/gathering places (fire pits, etc.)

F&B Very good condition

Mechanical & Structural Systems

Roof: Upper roof has a few blisters that have been repaired. The repairsappear to be in good condition and the roof has a warranty that theproperty has on record. Signs of roof leaks in Ballroom 2.

Faade: windows and caulk joints appear to be in good condition

Elevators: Excellent

HVAC: Overall the central plant is in great condition and all computer systemsare working normally. Property has an opportunity to capture freecooling if they add a plate and frame heat exchanger.

Plumbing: Excellent condition

Life Safety: Excellent condition

Generator: Excellent condition


10/16



ROI / Alternate Use Opportunities

The Property has not been fully developed according to current zoning

guidelines. It is estimated that an additional --- hotel units could be developedon the site. It is likely that the highest & best use scenario would be todevelop residential/timeshare units, which would require re-zoning or specialpermits. Parent Company Vacation Ownership (PCVO) has valued the emptyparcel and a portion of the parking lot on which additional development ofPCVO timeshares would be built at about $4M. PCVO would also build aparking garage to replace the lost parking. Any incrementaltimeshare/residential development would require a separate pool and therelocation of the two existing tennis courts. Timing would be of the essence,as they will be completing the final phase of the construction of the currentdevelopment later this year. Keeping PCVO focused on this development isimportant there is potential that they might be looking. Incremental resortrevenue has not been projected in our analysis.

Spa expansion Based on the anticipated level of demand from the Hotel andthe existing PCVO timeshare units, a spa expansion should be considered.Need to ensure that the property is adequately tracking operating data inSpaSoft.

F&B outlet leasing is not currently an opportunity, but may be in the future,particularly with the golf clubhouse restaurant. The Fine Dining Restaurant(specialty restaurant) operating results will need to be monitored.

Potential energy conservation initiatives include: Lighting retrofit incandescent lighting throughout the Hotel, particularly in

guestrooms (90W bulbs) opportunity to convert to 22W compact fluorescent

bulbs. Installation of a plate and frame heat exchanger Laundry facility potential to install an ozone or water recycling system Golf teaching facility currently no competitive clubs have a top-notch

teaching school. Would need a top name (e.g. Famous Person), but financialarrangement would be key in determining opportunity, and particularly wouldneed sponsorship for funding.

Resort management believes there is a need for a new ballroom and a newfeature outdoor function space. They also believe that the existing outdoorfunction areas need to be expanded and enhanced to compete in the market.

We will evaluate these needs depending on our success with attracting our fairshare of leisure transient. The need to replace the PCVO customer mayultimately require us to group up more at this hotel, which would require more

meeting space.


11/16



Operations Strategy

Guest Satisfaction. Trend the propertys GSI score is ---% which is well above

brand and convention hotels. They are aiming for a --- goal by focusing on their5 key drivers. They are primarily concerned with the price value relationshipand the guest arrival experience and are putting measures in place, includingcapital investment, to address these issues.

Meeting Planner Satisfaction. The property has improved its meeting plannerscores and is well above other convention resort hotels and the brand. Theproperty exceeds every area of measure but is still focused on improving theirscores while driving the group rate and catering contribution.

Associate Satisfaction. The propertys ASI results were ---% in 2006 versus abrand standard of ---%. The score is up from ---% in 2005 versus a brandstandard of ---%.

Priority Focus Areas (Profit Impact)

Item 1: Improve sales and marketing other cost to $--- PAR.

Item 2: Improve productivity in the restaurants to $---/Hour worked byincreasing menu pricing, closing slow restaurants and monitoring hoursmore aggressively. We should also look for ways to improve volume forthe dinner period.

Item 3: Increase leisure transient room night production to replace PCVOcustomer and drive rates as the group rate has less upside in 2007 basedon the business on the books YTD.

RevPar Index Target. The property is 6 of 6 in the RevPar Index for 2006 and2005 using the trailing 12 months activity in the September report. The hotel is3 of 6 in occupancy and 6 of 6 in ADR index. However, the property has beennumber 1 in RevPar growth for each of the last 3 years showing that theproperty is still ramping up and is gaining on the competition. The hotel isprojecting to achieve a ----% RevPAR Index in 2006, up 4 pts from previousyear. The hotel is still under its fair share and should be at or above 100% in2007 by increasing its leisure transient business and filling in need periods withmore group business. The property is disadvantaged to several properties withless of their business coming from the higher rated transient business than many

in the comp set, and having weaker meeting facilities than the other large grouphouses in the market.

Optimal Mix / Group Crossover Targets. The property currently has abusiness mix of ---% group, ---% transient and ---% PCVO. The optimal goal isto shift the mix to ---% transient and increase group to a ---% mix byeliminating PCVO rooms as they are eliminated by Parent Company. This mixis not likely to occur without additional meeting space but is the optimal mix forthis property. Therefore, we will look to slowly replace the PCVO with leisuretransient. If that strategy is not achievable because of new supply or otherfactors, we would look for an expanded meeting space platform. Our currenttargeted optimal group room nights is ---- for 2008 with a crossover at year endtarget of ---- room nights for 2007 and ---- for 2009.


12/16



PCVO Various Agreements. In 2006, the Resort generated approx. ---K roomnights from Parent Company Vacation Ownership (PCVO) activities at an ADRof $----. For 2006, the Hotel budgeted approximately ---K room nights at an

ADR of $----. For the purposes of this pro forma, it is assumed that as therelative level of demand for this segment diminishes, it is replaced primarily byleisure transient and group business. The Resort has recently deployed salesresources to focus on future leisure transient opportunities. An employeeexpense allocation agreement exists between the Resort and the existing PCVOtimeshares. PCVO effectively reimburses the Resort monthly for servicesprovided by Resort employees for PCVO. The agreement is renewed annuallysubject to mutual agreement between the Resort and PCVO. Costs allocatedinclude: 100% of wages & benefits of Direct Employees and 10% of base salary10% of benefits load for the GM, controller, Chief Engineer and F&B Director.Our analysis assumes that this agreement remains in place.


13/16




14/16



Appendix I

Management Team Updated 1/1/07

General Manager: Manager 1 (555) 555-5555

[email protected]

DOF: Manager 2 (555) 555-5555

[email protected]

DOM: Manager3 (555) 555-5555

[email protected]

F&B Director: Manager4 (555) 555-5555

[email protected]

DOE: Manager 5 (555) 555-5555

[email protected]

Major Hotel Agreements

Management Agreement

Operator: Brand Operator Incorporated

Effective Date: November 2003

Amendment Date: N/A

Initial Term: ----

Renewal Date: ----Renewal Terms: Two terms of five years each

Renewal Option: Owner has option to renew as long as Hotel is compliant withOperating Standards

Termination Date: 2013 or beyond (with sale or transfer of the Hotel) Ownermust provide 70-day notice which can be changed orrescinded up to 5 days prior to stated termination date.

PerformanceTermination:

Owner can terminate (after the first five years) if OwnersReturn exceeds Operating Income for two consecutive yearsand RevPAR is one of the three highest in the comp s et.

Escrow % / Type: 4% (increases to 5% in 2011)

Master Capital: N/A

Base Fee: ----% of annual Gross Operating Revenue

Primary IMF: ----% of Incentive Income (Operating Income minus Owners

Minimum Return ($---- million + ----% of any Hotel Brand-approved Capital Improvements)) See Exhibit Q of SecondAmendment for IMF Calculation.

Additional IMF: N/A

Expansion IMF: N/A

Owners Priority: ----% of any Hotel Brand-approved Capital Improvements

Territorial Rights: -----mile radius for 17 years form the opening date, excludingone full-service Hotel Brand hotel of less than -- -- roomsoutside of a seven-mile radius of the Hotel.

Right of FirstRefusal:

Notes:

Ground Lease: N/A

Mortgage Debt

Lender: Lending Company, L.P.

Closing Date: ----

Loan Amount (Interest Rate): ----

Amortization / Payment Term: None / 5 years

Balloon Payment (Due Date): ----
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


15/16



Appendix II Historical Operating Performance


16/16



exceed strategic plan sample

Documents