EMBASSY SUITE UNO HOTEL FINANCIAL PROPOSAL
April 2014
Howard Hao Li
Abudullah Algwaiz, Xinyan Wu
Wenqian Xu, Xiangdong Cao
BUILDING INFORMATION
Built in 1960
Modern Architectural Style
Building Size: 111,141 Sq Ft.
Thirteen-Story
Net Rentable Area: 97,661 sq. ft.
COMPARABLE PROJECTSHotel Name Stars Address Distance away
1600 Canal
Average
Daily Rate
Embassy Suites
New Orleans
3 Stars 315 Julia Street 1.5 miles 2-BD $180
1-BD $150
The
Saint Hotel Autograph
Collection
4 Stars 931 Canal Street 0.8 miles 2-BD $280
1-BD $220
The Roosevelt New
Orleans
4 Stars 130 Roosevelt way 0.5 miles 2-BD $330
1-BD $280
Wyndham Garden Hotel 3 Stars 201 Baronne Street 0.6 miles 2-BD $180
1-BD $130
Category of Guest Room Projected Average Daily Rate
2-BD Guest Room $ 0.34/Sqft * 819 Sqft = $ 280
1-BD Guest Room $ 0.34/Sqft * 605 Sqft = $ 206
weighted average ADR (average daily rate):
0.3*($330 / 819 ) 0.5*($280 / 819Sqft) 2*0.1*($180 / 819Sqft) $0.34 /Sqft Sqft
COMPARABLE PROJECTS
HOTEL DESIGN
Floor plan for the 1st floor
Area per floor: 9768 sqft.
Number of floors:13
Percentage of two-room suite: 80%
Percentage of single room: 20%
Total number of suites: 96
Total number of single rooms: 24Registration
desk
stairs
stairs
Lobby:3530.1
sqft
Number of suites per
floor: 8
Number of single rooms
per floor:2
Size of single room: 605
sqft
Size of two-room suite:
819 sqft
Floor plan for 2nd to 13th floor
Single room:
605sqft
Suite:
819sqft
Corridor:6ft
EMBASSY SUITES IN NUMBERS
>200
HOTELS THROUGHOUT NORTH AMERICA
>50,000
SUITES
73.0%
AVERAGE OCCUPANCY
126.03
REVPAR INDEX
MANAGEMENT BY HILTON WORLDWIDE
Hilton HHonor™
Hilton Worldwide Sales
Hilton Reservations & Customer Care (HRCC)
Global Online Services
Revenue Management Consolidated Center (RMCC)
Information Technology (IT)
Hilton Supply Management (HSM)
MANAGEMENT FEE
Initial Fee 75000 plus $400 for each additional guest
suite over 250
OnQ
hardware
10000
OnQ
Software
100000
Monthly
Royalty Fee
3.5% for Year 1, 4.5% for year 2 and 5.5% for
the reminder of Gross Rooms Revenue
Monthly
Program Fee
4% of Gross Rooms Revenue
HOTEL REVENUE AND OPERATION COST
Source: STR Analytics' 2013 HOST Almanac
Full-service hotels average occupancy of 70.2%
$244.76 in total revenue per occupied room night, up to 336
Gross operating profit 34.1%
Assumption Remark
Occupancy rate 80%
Total revenue per occupied room 280
Gross operating Cost 60% inc. Management Fee
Gross operating profit 40%
ASSUMPTION
• The hard costs and management fee-“Franchise Disclosure” document provided by the Embassy Suites.
• Sizeler Property Investors 95%
• $25 parking with net revenue 20%, 30% parking using per room
• Food and Beverage 10% room revenue
TAX BENEFIT
Tax Credit Assumptions
Qualified Equity Investment (% of Initial Investment) 80%
Qualified Equity Investment ($) $ 24,459,264
Federal Historic Tax Credits (% of Qualified Equity Investment) 20%
State HTC (% of QEI after subtracting Federal HTC) 25%
New Market Tax Credits (% of QEI in year 1,2,3) 5%
New Market Tax Credits (% of QEI in year 4,5,6,7) 6%
TAX BENEFIT
Tax Credits
Federal Historic Tax Credits $ 4,891,853
State Historic Tax Credits $ 4,891,853
New Market Tax Credits $ 1,222,963
PRO FORMA HIGHLIGHT
Financial HighlightsYear 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Total Revenue
$
10,274,429
$
10,785,522
$
11,322,170
$
11,885,651
$
12,477,305
$
13,098,543
$
13,750,842
Gross Operating Profit
$
3,869,753
$
4,076,514
$
4,293,612
$
4,521,566
$
4,760,917
$
5,012,235
$
5,276,120
Operating Profit Margin 38% 38% 38% 38% 38% 38% 38%
Net Income
$
(30,574,080)
$
12,696,760
$
2,931,175
$
2,924,038
$
3,264,651
$
3,387,822
$
3,517,153
$
30,227,526
Equity Initial Investments
$
(27,490,428)
Total Investor-level Cash
Flows
$
(26,115,907)
$
9,514,514
$
2,628,462
$
2,577,334
$
2,773,323
$
2,820,498
$
2,875,107
$
22,653,627
Total Developer-level Cash
Flows
$
(1,374,521)
$
3,182,246
$
302,713
$
346,703
$
491,328
$
567,325
$
642,046
$
4,839,503
Project IRR 16%
Investor IRR 13%
Developer IRR 150%