2013 GWCCA Planning Retreat Day Two September 19 & 20, 2013

GWCCA Opportunities 2

Hotel Development 3 Strategic opportunity for campus development and business growth potential for GWCCA

Reasons for considering a Hotel Development Respond to customer preference/demands –Better serve Buildings B & C –To increase the occupancy of GWCC Retain or enhance competitive position Support surrounding development (Northside Drive, NSP, neighborhoods) Provide a potential revenue stream 4

Local Conditions Expanding meeting space to accommodate small to medium sized events. Three major properties (downtown) have developed environmentally controlled connectors between their properties to improve their ability to enhance their group business. Committing to fewer room blocks so they can book internal meetings. 5

Development on/around our campus New Attractions: –College Football Hall of Fame –National Center for Civil and Human Rights –New Stadium Project –Atlanta Streetcar 6

Market/Demand Analysis Retained three consultants: HVS Global Hospitality Services (HVS) Jones Lang LaSalle Hotels and Hospitality Group (JLL) PKF Hospitality Research (PKF) Scope: Determine the feasibility of developing a convention-oriented hotel on GWCCA campus. Recommend project scope to include number of rooms, meeting space, services, and amenities. 7

Results 8

9 JLL Report Summary

JLL – Atlanta Market Strong Travel/Tourism Infrastructure Expected economic improvement and with limited supply growth, Lodging RevPar should see near term improvements Robust office market shifting to landlord- favorable market as companies move from suburbs to urban core 10

JLL – Conventions Market Increases in supply –CEIR outlook (3 years) is moderate demand growth: 5.8% Exhibit Net Square Foot growth 6.8% increase in revenues GWCC exhibition attendance has remained flat (possibly indicating decreased competitiveness). 11

JLL – Conventions Market Customer surveys indicate proximity of hotel rooms to facility is of paramount importance to meeting planners. The GWCC ranks 14 th in terms of rooms within ½ mile per 1,000sf of exhibit hall space. “A new headquarter hotel at the GWCC would likely mitigate some of the ‘refer In-House Facility/Hotel’ lost business and a portion of the ‘No Availability Hotels’ lost business.” 12

13 Competitive Set Hotel Stock Analysis Market SF Exhibition Space Rooms 1/2 mileRank Rooms 1 mileRank Atlanta1,366,0001, ,63410 Chicago2,600, ,03215 Dallas929,7263,607106,71511 Denver584,0006,44557,8547 Houston862,0002,178115,05312 Indianapolis566,0006,48846,8638 Nashville118,6753,00323,8232 New Orleans1,100,0002, ,1799 Orlando2,053,8004, ,68513 Phoenix645,9003,04993,40414 San Antonio440,0008,321312,5783 San Diego615,7005,295711,3075 San Francisco538,70013,909126,3091 Tampa200,0002,17662,7916 Washington DC703,0004,062813,2964 Rankings based upon number of rooms per square foot of exhibition space

Summary - JLL Development viability is very strong Demand is very favorable for project Brand is significant Will require public support Will support debt service but not enough to support private equity requirement Would have negative short-term impact on other hotels, but benefit market in long-term. 14

HVS Report Summary 15

16 HVS – Hotel Market Over the past 12 years hotel occupancy has had modest positive growth (even through recessions). From 2001 – 2012 local hotel occupancy levels ranged from a low of 55% to a high of 68% 2012 National occupancy levels reached highest point since 2007 and may soon exceed 70%.

Historical Supply & Demand Trends Local Competitive YearOccupancyAverage Rate %$ %$ %$ %$ %$ %$ %$ %$ %$ %$ %$ %$

18 Subject Property’s Occupancy & Average Rate Forecast (FY)

Summary - HVS Hotel would increase activity in Building C and group room night demand. Brand is important for success. Feasibility is extremely high. Biggest risk is regional/national incident (ie: Katrina). Combination of Public/Private Development 19

20 PKF Report Summary

PKF – Atlanta Market Atlanta has made strong progress in higher- paid professional and technical services job growth. New attractions (CFHOF, Museum, NSP) will bring new jobs. Multiple growth engines and strong demographics will make Atlanta an above- average performer in the long term. (Moody’s Analytics July 2013). Location of current Hotel inventory in relation to Buildings B and C has a negative impact on GWCC business. 21

22 Hotels in the Atlanta Downtown Area

PKF – Atlanta Market Demand for hotel rooms is at a historic high since the “Great Recession”. Demand has increased following GWCCA expansions (GWCC/Dome/COP) & attractions (Aquarium, World of Coke). Development of Lucky Marietta District has improved the offering of restaurants and entertainment options for visitors. 23

PKF - Summary Hotel at GWCC would be preferred hotel for customers. Creates ability to sell/host multiple events in multiple buildings. Opportunity to spur development. Overall market feasibility is very high. Public development is key Consider a non-branded development. 24

Hotel Comparisons Years 1 & 5 25 HVS based upon 6 months operations

GWCCA Hotel Opportunity Next Steps 26 Recommend assigning the Project to Stadium Development Committee o Consultant Presentations o RFP/Q for Project Manager/Developer

Questions? 27