Analyzing Brand-Level Market Impact
H&LA works with major hotel brands to examine the effects of a franchise hotel entering a market where a same-brand hotel is already operating. The owner of the existing franchised hotel or the franchise company may order the study when a new similar brand is being considered near an existing franchise. The applicant property and the objecting property are analyzed to determine how much impact, if any, the objector will experience as a result of new supply addition of the same brand.
Our impact analysis includes the following components:
- Interview representatives of the applicant and objecting properties, and others knowledgeable about the market.
- Conduct an area review of the market
- Analyze the actual performance of the existing hotel and consider demand sources for the proposed hotel.
- Determine the current demand at the objecting property and consider specific demand segments that may switch to a new property if it were constructed.
- Analyze potential additional demand that would come to the objecting property from having another brand affiliation in a general market.
- Estimate the occupancy, average daily rate, and room revenue impact that may occur from the addition of new supply.
- Estimate both base and incremental impact.
Impact Analysis
Frequently Asked Questions
- What is an impact analysis in hospitality development?
An impact analysis evaluates how a proposed project may affect the financial performance of existing hotels and the market performance overall. This analysis is often required by hotel brands when new hotels are introduced into markets where similarly branded properties already exist.
- Why are impact analyses required by hotel brands or lenders?
Hotel brands and lenders use impact analyses to understand how additional supply may influence occupancy, average daily rate, and brand performance across a market. These studies help manage brand standards and financial risk.