Hospitality: Using the Projections for Demand Sheet
Jen McGee
This sheet is where you will identify new supply, make conclusions about the demand for the subject and the competitive set, and conclude the demand for the subject and the set.
This guide shows you how to use the Demand Projections sheet in your Hospitality Workbook, focusing on
Step 1: Access the Demand and Projections sheet by selecting DemandProj from the bottom menu or the left side menu.
Note: All data points in this sheet are auto-populated from the Room Builder sheet. You can leave the percentages in place or modify them in the yellow fields as you populate additional line items for demand.
New Supply
Step 1: Determine how you will estimate supply
We understand that New Supply can be a difficult element to consider, and we have found that the easiest way is to review the Competitive Set Reports.
Other sources to consider reviewing are news reports, articles, hotel publications covering your market, brokers, and permits requested from various jurisdictions to get a good view of the supply. You can also review the historical trend to identify the pace at which supply has been added to your market.
Pro-tip: Typically, when properties operate with occupancies in the high 70s, 80s, or 90s, it’s fairly reasonable to project an increase in supply. However, if your set of properties and/or your subject feature occupancies regularly below 70%, then in many cases, it will be reasonable to assume that new supply is unlikely.
Step 2: Set your supply estimate
These cells can be edited using a formula or by hard-entering your estimate.
When a property has X number of rooms and gets completed sometime in the future, enter the formula in one of the cells representing the future in the reporting period.
IE: = 85 * 365,
When you need to reflect a more straight-line method of estimating new rooms annually, you can use .01* the number above the row.
Growth
Step 1: Observe and review the subject’s demand change growth history
Step 2: Estimate the demand change factor for the individual segments
You can enter the estimate directly into the cell
Pro-tip: The formulas in here default to the previous years; you don’t have to use those, as you may need to trend up or down depending on the market.
Step 3: Determine if the estimate for the segment’s allocation needs to be modified
A change may be needed if you perceive that either recovery in the market is occurring that is eroding. By typing directly into the cell, you can adjust these accordingly and gradually build them up or tear them down over time.
Pro tip: Corporate Growth - tends to be more volatile and bounces up and down a bit; these percentages can be input as needed by typing directly into the cell.
Pro tip: Group Growth - you may want to model this more closely to CPI since it’s an economically sensitive segment; again, these percentages can be adjusted as necessary.
Additional Sets or Assets
The number of segments, secondary sets, or assets you selected in theRoom Night Builder sheet will be reflected in this table, so you will want to review your conclusions and adjust if needed.
Step 1: Select Click Here to Show All Rows to access the additional items
Step 2: Review how demand for the subject has been forecasted
These estimates will carry forward to the Occupancy table on the following worksheet.
Demand Conclusion
Step 1: Add your summary for the Demand Projections table using the yellow field at the top of the sheet.
Once you have completed all necessary information in the Demand Projections sheet, you can move on to the Projections for Demand(PenOccupancy) sheet in the Hospitality Workbook.
Additional Questions? Valcre Support is ready to help with all your Valcre product questions! You can connect to us via phone, email, or chat!
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