TABLE OF CONTENTS Executive Summary. Convention Industry Overview and Trends. Convention Market Competitive and Comparable Analysis

Transcription

1 TABLE OF CONTENTS Executive Summary Chapter 1 Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Demand and Impact Convention Industry Overview and Trends Convention Market Competitive and Comparable Analysis Influence of Comparable Downtown Stadiums Meeting Planner Interviews Hotel Market Analysis Comparable Convention City Hotel Tax Rate Data

2 DEMAND & IMPACT PROJECTIONS This chapter shows the expected level of demand and impact generated from the proposed Project. The projections in this analysis include the net new events, attendance, daytrips, hotel room nights, hotel revenue (as well as other spending impacts) in the city resulting from the Project. The projection assumes that the Project is operated and marketed in a manner consistent with or better than the existing San Diego Convention Center. Convention Center The first table shows the breakdown of available convention dates. Other than certain dates for NFL games, the facility will be open and available for group business. As mentioned previously, the NFL and Chargers have indicated they will work to allow multiple long-term bookings during the NFL seasons for all Mondays through Thursdays as well as one weekend per month during the critical mid-september to mid-november convention season. While some dates during the season will not be known to be available until the NFL schedule is released, those dates will be available for short-term bookings, also known as backfill dates. Chargers Stadium and Convention Center Study Chapter 1 - Page 2

3 Table 1-1 Potential Convention Booking Days Analysis NFL Season Days Percent of Available Convention Days Long-Term Booking Days 94 67% Short-Term Booking Days 29 21% Bookable Convention Days % NFL Days 18 13% Convention Days % Available Convention Days 141 Holiday Periods 12 Days (Sept - Jan) 153 Non-NFL Season Days Percent of Available Convention Days Long-Term Booking Days % Bookable Convention Days % Holiday Periods 9 Days 212 Year Days Percent of Available Convention Days Long-Term Bookable Days % Short-Term Bookable Days 29 8% Bookable Days % NFL Days 18 5% Convention Days % Holiday Period Days 21 Days 365 As shown, of the total available convention days that could be booked in the year, the Project would be able to book 95 percent to those dates. Nearly all of those, 86 percent of total potential dates, would be able to be booked long-term in advance of the event, while only nine percent of dates would fall in the short-term booking category. The dates needed by the NFL (18) total only five percent of days in the year. The NFL actually takes up fewer dates than the 21 days that are not bookable for conventions due to major holiday weekends or periods. However, the benefit of this combined facility is that it would likely be booked for an NFL or other sporting event (such as a bowl game or other event) during the November and December holiday periods. In this regard, hotels that otherwise would be struggling for demand during these periods would be full due to sports events. Chargers Stadium and Convention Center Study Chapter 1 - Page 3

4 The table below shows the events by type projected for the Project. Table 1-2 Event Demand Projections Event Type Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Conventions, Conferences and Trade Shows Entire Facility All but Multipurpose Exhibition Space Partial Exhibit, Ballroom & Meeting Rooms Consumer Shows Entire Facility All but Multipurpose Exhibition Space Partial Exhibit, Ballroom & Meeting Rooms Corporate Events All but Multipurpose Exhibition Space Partial Exhibit, Ballroom & Meeting Rooms Sports & Entertainment Events (including NFL) Entire Facility Football Field Only Football Field and Partial Remainder of Building Banquets Full ballroom Two-thirds of ballroom One-third of ballroom Meetings Room Events All meeting rooms Two-thirds of meeting rooms One-third of meeting rooms All Events The number of events projected will increase from 86 in Year 1 to 134 by stabilization. The number of events that will take up a majority of the building is 39, which includes eight assumed NFL game day events. When considering that there are 52 weeks in a year and a maximum-occupied facility can reasonable accommodate approximately 46 weeks/weekends per year (when subtracting major holiday periods), the projection is reasonable and perhaps conservative, given HSP s analysis of the market s desire to hold events in the City of San Diego. HSP assumed four total sports and entertainment events would be held, which could be concerts, other major spectator events or other sporting events, such as bowl games. The next table shows the number of attendees projected in the first ten years. Chargers Stadium and Convention Center Study Chapter 1 - Page 4

5 Table 1-3 Projected Attendance (Individuals, Not Attendee Days) Event Type Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Conventions, Conferences and Trade Shows 31,800 39,500 47,200 53,000 53,000 53,000 53,000 53,000 53,000 53,000 Consumer Shows 28,900 43,400 43,400 43,400 43,400 43,400 43,400 43,400 43,400 43,400 Corporate Events 15,500 20,400 24,300 29,100 31,000 31,000 31,000 31,000 31,000 31,000 Sports & Entertainment Events (including NFL) 686, , , , , , , , , ,000 Banquets 39,500 42,600 45,800 47,400 47,400 47,400 47,400 47,400 47,400 47,400 Meetings Room Events 27,700 36,300 45,000 47,300 47,300 47,300 47,300 47,300 47,300 47,300 All Events 829, , , , , , , , , ,100 Non-Sports/Entertainment Attendance 143, , , , , , , , , ,100 A total of 143,400 non-sports/entertainment attendees are projected in the first year, ramping up to 222,100 by stabilization. When including sports and entertainment attendees, the total exceeds 900,000 by stabilization. The next table shows the projected share of attendees coming to events that are likely to bring a spouse, partner or other family member. In a location that is not as attractive a destination, there would be very limited spousal attendance. However, in locations like San Diego, San Francisco, Hawaii and others, the allure of the destination brings added visitation by family members. An extended stay before or after the event is typical, although HSP s analysis is conservative and did not count extended stays. Table 1-4 Estimated Spouse Ratio Conventions, Conferences and Trade Shows 35% Consumer Shows 35% Corporate Events 25% Sports & Entertainment Events (including NFL) 10% Banquets 33% Meetings Room Events 25% These spousal, partner or other family attendees are not counted as part of the ticketed or official event attendance. The next table shows the total estimated attendee and spouse days. Attendee days are a product of the number of attendees multiplied by the number of days in their event, which was conservatively estimated to only match the number of nights they would stay. For example, if an event is three days and two nights, the model only counts the number of nights. Chargers Stadium and Convention Center Study Chapter 1 - Page 5

6 Table 1-5 Attendee & Spouse Days Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Conventions, Conferences and Trade Shows Entire Facility 31,590 42,120 52,650 52,650 68,250 68,250 68,250 68,250 68,250 68,250 All but Multipurpose Exhibition Space 58,793 71,858 84,923 97,988 97,988 97,988 97,988 97,988 97,988 97,988 Partial Exhibit, Ballroom & Meeting Rooms 15,444 18,018 20,592 25,740 25,740 25,740 25,740 25,740 25,740 25, , , , , , , , , , ,978 Consumer Shows Entire Facility 42,120 63,180 63,180 63,180 63,180 63,180 63,180 63,180 63,180 63,180 All but Multipurpose Exhibition Space 28,220 42,331 42,331 42,331 42,331 42,331 42,331 42,331 42,331 42,331 Partial Exhibit, Ballroom & Meeting Rooms , , , , , , , , , ,511 Corporate Events All but Multipurpose Exhibition Space 7,275 10,913 10,913 14,550 14,550 14,550 14,550 14,550 14,550 14,550 Partial Exhibit, Ballroom & Meeting Rooms 18,188 22,734 28,797 33,344 36,375 36,375 36,375 36,375 36,375 36,375 25,463 33,647 39,709 47,894 50,925 50,925 50,925 50,925 50,925 50,925 Sports & Entertainment Events (including NFL) Entire Facility 589, , , , , , , , , ,600 Football Field Only 165, , , , , , , , , ,000 Football Field and Partial Remainder of Building , , , , , , , , , ,600 Banquets Full ballroom 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 Two-thirds of ballroom 9,100 9,100 9,100 9,100 9,100 9,100 9,100 9,100 9,100 9,100 One-third of ballroom 29,400 33,600 37,800 39,900 39,900 39,900 39,900 39,900 39,900 39,900 52,500 56,700 60,900 63,000 63,000 63,000 63,000 63,000 63,000 63,000 Meetings Room Events All meeting rooms 30,000 37,500 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 Two-thirds of meeting rooms 15,625 21,875 28,125 31,250 31,250 31,250 31,250 31,250 31,250 31,250 One-third of meeting rooms 9,750 13,000 16,250 17,333 17,333 17,333 17,333 17,333 17,333 17,333 55,375 72,375 89,375 93,583 93,583 93,583 93,583 93,583 93,583 93,583 All Events 1,064,104 1,154,828 1,208,259 1,240,965 1,259,596 1,259,596 1,259,596 1,259,596 1,259,596 1,259,596 As shown, the number of visitor days is projected at just over one million in the first year, then increase to more than 1.2 million by stabilization. The next table shows the projected share of attendees by event type that are spending the night and requiring lodging. The balance includes those who are either daytrippers or are spending the night with friends or family. Table 1-6 Percent of Attendees Requiring Hotel Lodging Conventions, Conferences and Trade Shows 90% Consumer Shows 6% Corporate Events 40% Sports & Entertainment Events (including NFL) 15% Banquets 10% Meetings Room Events 33% Chargers Stadium and Convention Center Study Chapter 1 - Page 6

7 Certain event types generate a high rate of hotel room nights, while other more local events, such as consumer shows, do not. High rate of hotel room nights occur with conventions and tradeshows, where most attendees are coming for several days and spending the night in hotels. For example, an estimated 20 percent of fans attending Chargers games are from outside the market, but HSP lowered the estimate of lodgers to 15 percent for all sports/entertainment events to be conservative. The ratio of visiting attendees is due to the attractiveness of San Diego combined with the desire of many opposing team fans to see their team play in an attractive environment. The next table shows the total estimated daytrips. Daytrips result from the percentage of attendees who come just for the day, by event type. Nearly all, except NFL attendees and consumer show attendees, will be from outside the immediate area. Table 1-7 Daytripper Days Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Conventions, Conferences and Trade Shows Entire Facility 3,159 4,212 5,265 5,265 6,825 6,825 6,825 6,825 6,825 6,825 All but Multipurpose Exhibition Space 5,879 7,186 8,492 9,799 9,799 9,799 9,799 9,799 9,799 9,799 Partial Exhibit, Ballroom & Meeting Rooms 1,544 1,802 2,059 2,574 2,574 2,574 2,574 2,574 2,574 2,574 10,583 13,200 15,816 17,638 19,198 19,198 19,198 19,198 19,198 19,198 Consumer Shows Entire Facility 39,593 59,389 59,389 59,389 59,389 59,389 59,389 59,389 59,389 59,389 All but Multipurpose Exhibition Space 26,527 39,791 39,791 39,791 39,791 39,791 39,791 39,791 39,791 39,791 Partial Exhibit, Ballroom & Meeting Rooms ,120 99,180 99,180 99,180 99,180 99,180 99,180 99,180 99,180 99,180 Corporate Events All but Multipurpose Exhibition Space 4,365 6,548 6,548 8,730 8,730 8,730 8,730 8,730 8,730 8,730 Partial Exhibit, Ballroom & Meeting Rooms 10,913 13,641 17,278 20,006 21,825 21,825 21,825 21,825 21,825 21,825 15,278 20,188 23,826 28,736 30,555 30,555 30,555 30,555 30,555 30,555 Sports & Entertainment Events (including NFL) Entire Facility 501, , , , , , , , , ,160 Football Field Only 140, , , , , , , , , ,250 Football Field and Partial Remainder of Building , , , , , , , , , ,410 Banquets Full ballroom 12,600 12,600 12,600 12,600 12,600 12,600 12,600 12,600 12,600 12,600 Two-thirds of ballroom 8,190 8,190 8,190 8,190 8,190 8,190 8,190 8,190 8,190 8,190 One-third of ballroom 26,460 30,240 34,020 35,910 35,910 35,910 35,910 35,910 35,910 35,910 47,250 51,030 54,810 56,700 56,700 56,700 56,700 56,700 56,700 56,700 Meetings Room Events All meeting rooms 20,100 25,125 30,150 30,150 30,150 30,150 30,150 30,150 30,150 30,150 Two-thirds of meeting rooms 10,469 14,656 18,844 20,938 20,938 20,938 20,938 20,938 20,938 20,938 One-third of meeting rooms 6,533 8,710 10,888 11,613 11,613 11,613 11,613 11,613 11,613 11,613 37,101 48,491 59,881 62,701 62,701 62,701 62,701 62,701 62,701 62,701 All Events 817, , , , , , , , , ,744 Percent of Visitor Days 76.8% 75.6% 74.1% 73.0% 72.2% 72.2% 72.2% 72.2% 72.2% 72.2% The number of daytrips is expected to increase from more than 817,000 in Year 1 to nearly 910,000 by stabilization. The percentage of total visitor days represented by daytrips is 72.2 percent by stabilization. The next table shows the total estimated overnights. This is a result of the percentage of attendees who come and stay overnight, by event type. Chargers Stadium and Convention Center Study Chapter 1 - Page 7

8 Table 1-8 Overnighter Days Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Conventions, Conferences and Trade Shows Entire Facility 28,431 37,908 47,385 47,385 61,425 61,425 61,425 61,425 61,425 61,425 All but Multipurpose Exhibition Space 52,913 64,672 76,430 88,189 88,189 88,189 88,189 88,189 88,189 88,189 Partial Exhibit, Ballroom & Meeting Rooms 13,900 16,216 18,533 23,166 23,166 23,166 23,166 23,166 23,166 23,166 95, , , , , , , , , ,780 Consumer Shows Entire Facility 2,527 3,791 3,791 3,791 3,791 3,791 3,791 3,791 3,791 3,791 All but Multipurpose Exhibition Space 1,693 2,540 2,540 2,540 2,540 2,540 2,540 2,540 2,540 2,540 Partial Exhibit, Ballroom & Meeting Rooms ,220 6,331 6,331 6,331 6,331 6,331 6,331 6,331 6,331 6,331 Corporate Events All but Multipurpose Exhibition Space 2,910 4,365 4,365 5,820 5,820 5,820 5,820 5,820 5,820 5,820 Partial Exhibit, Ballroom & Meeting Rooms 7,275 9,094 11,519 13,338 14,550 14,550 14,550 14,550 14,550 14,550 10,185 13,459 15,884 19,158 20,370 20,370 20,370 20,370 20,370 20,370 Sports & Entertainment Events (including NFL) Entire Facility 88,440 88,440 88,440 88,440 88,440 88,440 88,440 88,440 88,440 88,440 Football Field Only 24,750 24,750 24,750 24,750 24,750 24,750 24,750 24,750 24,750 24,750 Football Field and Partial Remainder of Building , , , , , , , , , ,190 Banquets Full ballroom 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 Two-thirds of ballroom One-third of ballroom 2,940 3,360 3,780 3,990 3,990 3,990 3,990 3,990 3,990 3,990 5,250 5,670 6,090 6,300 6,300 6,300 6,300 6,300 6,300 6,300 Meetings Room Events All meeting rooms 9,900 12,375 14,850 14,850 14,850 14,850 14,850 14,850 14,850 14,850 Two-thirds of meeting rooms 5,156 7,219 9,281 10,313 10,313 10,313 10,313 10,313 10,313 10,313 One-third of meeting rooms 3,218 4,290 5,363 5,720 5,720 5,720 5,720 5,720 5,720 5,720 18,274 23,884 29,494 30,883 30,883 30,883 30,883 30,883 30,883 30,883 All Events 246, , , , , , , , , ,853 Percent of Visitor Days 23.2% 24.4% 25.9% 27.0% 27.8% 27.8% 27.8% 27.8% 27.8% 27.8% The number of overnights is expected to increase from approximately 246,000 in Year 1 to more than 349,000 by stabilization. The percentage of total visitor days represented by overnighters is 27.6 percent by stabilization. The next table shows the total estimated room nights, after making assumptions for the number of guests per room night. While many corporate visitors travel and stay in a hotel alone, many group and leisure visitors do not. Chargers Stadium and Convention Center Study Chapter 1 - Page 8

9 Table 1-9 Estimated Room Nights Generated by the Project Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Conventions, Conferences and Trade Shows Entire Facility All but Multipurpose Exhibition Space Partial Exhibit, Ballroom & Meeting Rooms Consumer Shows Entire Facility All but Multipurpose Exhibition Space Corporate Events All but Multipurpose Exhibition Space Partial Exhibit, Ballroom & Meeting Rooms Sports & Entertainment Events (including NFL) Entire Facility Football Field Only Football Field and Partial Remainder of Building Banquets Full ballroom Two-thirds of ballroom One-third of ballroom Meetings Room Events All meeting rooms Two-thirds of meeting rooms One-third of meeting rooms All Events Non-Sports/Entertainment Room Nights Room Nights per SF of Exhibit Space Not Including NFL 19,608 26,143 32,679 32,679 42,362 42,362 42,362 42,362 42,362 42,362 36,492 44,601 52,711 60,820 60,820 60,820 60,820 60,820 60,820 60,820 9,586 11,184 12,781 15,977 15,977 15,977 15,977 15,977 15,977 15,977 65,685 81,928 98, , , , , , , ,158 1,580 2,369 2,369 2,369 2,369 2,369 2,369 2,369 2,369 2,369 1,058 1,587 1,587 1,587 1,587 1,587 1,587 1,587 1,587 1,587 2,638 3,957 3,957 3,957 3,957 3,957 3,957 3,957 3,957 3,957 2,188 3,282 3,282 4,376 4,376 4,376 4,376 4,376 4,376 4,376 5,470 6,837 8,661 10,028 10,940 10,940 10,940 10,940 10,940 10,940 7,658 10,119 11,943 14,404 15,316 15,316 15,316 15,316 15,316 15,316 46,547 46,547 46,547 46,547 46,547 46,547 46,547 46,547 46,547 46,547 13,026 13,026 13,026 13,026 13,026 13,026 13,026 13,026 13,026 13, ,574 59,574 59,574 59,574 59,574 59,574 59,574 59,574 59,574 59, ,633 1,867 2,100 2,217 2,217 2,217 2,217 2,217 2,217 2,217 2,917 3,150 3,383 3,500 3,500 3,500 3,500 3,500 3,500 3,500 7,444 9,305 11,165 11,165 11,165 11,165 11,165 11,165 11,165 11,165 3,877 5,428 6,978 7,754 7,754 7,754 7,754 7,754 7,754 7,754 2,419 3,226 4,032 4,301 4,301 4,301 4,301 4,301 4,301 4,301 13,740 17,958 22,176 23,220 23,220 23,220 23,220 23,220 23,220 23, , , , , , , , , , ,724 92, , , , , , , , , , The number of room nights generated is expected to increase from approximately 152,000 in Year 1 to more than 220,000 by stabilization. After subtracting out sports and entertainment, the results are approximately 93,000 in Year 1, increasing to approximately 165,000 by stabilization. Chargers Stadium and Convention Center Study Chapter 1 - Page 9

10 IMPACT ANALYSIS The incremental impact of the Project will increase economic activity and result in additional room nights, restaurant spending, retail spending, increased fiscal impact, income, earnings and employment for the City of City of San Diego economy. The net new and recaptured direct spending discussed earlier is considered to be the Direct Impact, which is is in addition to any natural growth. From the direct spending figures, further impact analyses will be completed. Indirect Impacts are the supply of goods and services resulting from the initial direct spending. For example, a convention attendee s direct expenditure on a hotel room causes the hotel to purchase linens and other items from suppliers. The portion of these hotel purchases that are within the local economy is considered an indirect economic impact. Induced Impacts embody the change in local spending due to the personal expenditures by employees whose incomes are affected by direct and indirect spending. For example, a waitress at a restaurant may have more personal income as a result of the convention attendee s visit. The amount of the increased income that the employee spends in the area is considered an induced impact. Fiscal Impacts represent the incremental tax revenue collected by the community due to the net new economic activity. Fiscal impacts provide an offset to the potential public expenditures required to support the development. Earnings and Employment Impacts include the incremental employment provided not only onsite, but due to the spending associated with it. For example, the direct, indirect and induced impacts generate spending, support new and ongoing businesses and ultimately result in ongoing employment for citizens. There are a variety of impacts to the city s hotels from the Project, including increases in existing visitor spending due to better facilities, new group attendee spending, new exhibitor spending, new corporate transient spending and new leisure spending. The following table summarizes the daytrip and overnight visitor activity expected over ten years. Table 1-10 Net New Visitors and Room Nights Year 1 Year 2 Year 3 Year 4 Year 5 New Daytrip Visitor Days 677, , , , ,494 New Overnighter Days 246, , , , ,853 New Room Nights 152, , , , ,724 Year ,494 7,548, ,853 3,274, ,724 2,090,577 Source: Hunden Strategic Partners Chargers Stadium and Convention Center Study Chapter 1 - Page 10

11 As shown, over ten years, more than 7.5 million daytrip visitor days and nearly 3.2 million overnights are expected to be new to the City of San Diego. New room nights from the overnights are projected to total nearly 2.1 million over the ten-year period. Impact Projections While the basis for the impact projections is the number of room nights to the City of San Diego, additional impact occurs as well, from the compression of these room nights on an already highly occupied hotel set. This will cause increased room rates during events, especially NFL games and large conventions. Both the new room nights and increased rates generate increased revenue for City of San Diego hotels. In addition, hundreds of thousands of daytrips will result in money being spent in the City of San Diego hotels before and after events at the Project, whether on game days, during consumer shows or before/after other events like banquets, meetings and conferences. Increased Hotel Rate Analysis The next table shows the increase in hotel revenue due to ADR (average daily rate), also known in the industry as compression, from major events. HSP selected only those events that would either take up most or all of the building and generate significant room nights, as well as NFL games. Smaller conventions, conferences, trade shows, consumer shows, banquets and meetings were not included. HSP identified other cities with downtown NFL stadiums to better understand the impact of home games on room rates. The following table summarizes hotel compression rates due to NFL home and away games for comparable NFL markets with downtown stadiums for selected dates, where comparisons were available for the upcoming season. While the increased rates occur most strongly in the downtown area surrounding the stadiums, the ripple effects of the rate increases push out to all city hotels during city-wide events. Chargers Stadium and Convention Center Study Chapter 1 - Page 11

12 Table 1-11 Hotel Compression Due to NFL Home/Away Games* Comparable Market Hotel Type Hotel Property # of Rooms Home Rate Home Date Away Rate Away Date Increase/Decrease Full Service/Luxury Four Seasons Baltimore 257 $ /9/16 $ /23/16 13% Stadium Hotel Holiday Inn Express Baltimore at the Stadiums 123 $ /9/16 $ /23/16 27% Baltimore Convention Center Hotel Hilton Baltimore 757 $ /9/16 $ /23/16-4% Select Service Residence Inn 188 $ /9/16 $ /23/16-26% Boutique Kimpton Hotel Monaco 202 $ /9/16 $ /23/16 0% Average 305 $ $ % Full Service/Luxury The Westin Convention Center 616 $ /4/16 $ /16/16-21% Convention Center Hotel Wyndham Grand Pittsburgh 712 $ /4/16 $ /16/16 0% Pittsburgh Select Service Holiday Inn Express and Suites 135 $ /4/16 $ /16/16 26% Boutique Kimpton Hotel Monaco 248 $ /4/16 $ /16/16 9% Average 428 $ $ % Full Service/Luxury The Westin 575 $ /11/16 $ /18/16 7% Convention Center Hotel JW Marriott 1005 $ /11/16 $ /18/16 41% Indianapolis Select Service Holiday Inn Express Indianapolis Downtown 108 $ /11/16 $ /18/16 17% Boutique The Alexander 209 $ /11/16 $ /18/16 18% Average $ $ % Full Service/Luxury Fairmont Olympic Hotel 450 $ /16/16 $ /23/16 9% Stadium Hotel Silver Cloud Hotel - Seattle Stadium 211 $ /16/16 $ /23/16 42% Seattle Convention Center Hotel Westin Seattle 891 $ /16/16 $ /23/16 0% Select Service Hilton Garden Inn Seattle Downtown 222 $ /16/16 $ /23/16 0% Boutique The Maxwell Hotel 139 $ /16/16 $ /23/16 23% Average 383 $ $ % Full Service/Luxury Hilton Nashville Downtown 330 $ /23/16 $ /20/16 21% Convention Center Hotel Omni Nashville 800 $ /23/16 $ /20/16 20% Nashville Select Service Holiday Inn Express 287 $ /23/16 $ /20/16 29% Boutique Union Station Hotel 125 $ /23/16 $ /20/16 23% Average 386 $ $ % Comparable Market Average $ $ % Rate Differential $ * For home game dates when hotels are not sold out as of 7/15/16 Source: Expedia.com Advertised Rate, Smith Travel Research As the table shows, using a simple average, rates increased by $49.95, or 12.3 percent, during home game football weekends. While rates in the City of San Diego may increase by more or less, this sampling provides a solid indication that home games in downtown facilities provide room night compression. HSP notes that NFL games are also more likely to generate in-bound tourism when the city is a compelling destination. San Diego has both an ideal climate when many other cities are cold during the NFL season and is a popular destination generally. Internal data from the Chargers suggest that home game attendance is made up of a significant portion of visiting fans. These visiting fans spending provides significant impact to the City of San Diego. With the new stadium located downtown in a walkable environment, HSP expects even more inbound fans to games. HSP expects that existing out-of-town fans will continue to come, but will spend more on downtown hotel rooms, and additional fans will come that are not coming today, due to the improved location. The following table shows the projection of room revenue from incremental spending on existing room nights. Chargers Stadium and Convention Center Study Chapter 1 - Page 12

13 Table 1-12 Projection of Room Revenue from Incremental Spending on Existing Room Nights Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Number of Impacted Hotel Rooms (all SD Hotels) 44,326 44,326 44,326 44,326 44,326 44,326 44,326 44,326 44,326 44,326 Estimated Annual Occupancy (all SD Hotels 72.0% 72.0% 72.0% 72.0% 72.0% 72.0% 72.0% 72.0% 72.0% 72.0% Estimated Annual Rate (all SD Hotels) $ $ $ $ $ $ $ $ $ $ Annual Room Nights in Impacted Group Hotels (000s) 11,649 11,649 11,649 11,649 11,649 11,649 11,649 11,649 11,649 11,649 Annual Room Revenue in Impacted Group Hotels (000s) $ 1,871,730 1,871,730 1,871,730 1,871,730 1,871,730 1,871,730 1,871,730 1,871,730 1,871,730 1,871,730 Estimated Nights per Year of Intense Compression Average Estimated ADR Increase due to Compression $ $ $ $ $ $ $ $ $ $ Increase in Room Revenue from Compression (000s) $ 11,478 $ 14,240 $ 17,133 $ 19,250 $ 21,116 $ 21,644 $ 22,185 $ 22,739 $ 23,308 $ 23,891 HSP assumed that during major events, considered city-wide events, that rooms would become more scarce, allowing hotel yield managers to increase rates, as is the standard practice in the industry. The rate during these compression periods was assumed to increase an average of nearly $15 per occupied room in the first year. The increase on the one-third of rooms (approximately 15,000) located downtown is expected to be more than $25. Based on the number of existing occupied room nights during these intense compression nights, HSP estimated an increase in hotel revenue for existing hotels occupied rooms beginning at $11.5 million and increasing to nearly $24 million by Year 10. The daily spending by visitors and the overnight spending by overnight visitors all contribute to the economic impact of the Project. Spending by category, conservatively estimated based on a number of inputs, was populated in the model. Other spending includes entertainment, such as concerts and tours, as well as other non-specified spending. These are shown in the next table. Table 1-13 Estimated Spending Per Visitor per Day Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Spending per New Visitor - Overnight Onsite Food & Beverage $18.49 $18.95 $19.43 $19.91 $20.41 $20.92 $21.44 $21.98 $22.53 $23.09 Offsite Food & Beverage $43.13 $44.21 $45.31 $46.44 $47.60 $48.79 $50.01 $51.26 $52.55 $53.86 Food & Beverage $61.62 $63.16 $64.74 $66.36 $68.01 $69.71 $71.46 $73.24 $75.07 $76.95 Lodging Spending $ $ $ $ $ $ $ $ $ $ Retail Spending $21.51 $22.04 $22.59 $23.16 $23.74 $24.33 $24.94 $25.56 $26.20 $26.86 Transportation Spending $11.81 $12.11 $12.41 $12.72 $13.04 $13.37 $13.70 $14.04 $14.40 $14.76 Other Spending $6.14 $6.30 $6.45 $6.62 $6.78 $6.95 $7.12 $7.30 $7.49 $7.67 Direct Spending $ $ $ $ $ $ $ $ $ $ Spending per Visitor - Day Trip Onsite Food & Beverage $12.94 $13.27 $13.60 $13.94 $14.29 $14.64 $15.01 $15.39 $15.77 $16.16 Offsite Food & Beverage $23.72 $24.31 $24.92 $25.54 $26.18 $26.84 $27.51 $28.20 $28.90 $29.62 Food & Beverage $36.66 $37.58 $38.52 $39.48 $40.47 $41.48 $42.52 $43.58 $44.67 $45.79 Retail Spending $14.41 $14.77 $15.14 $15.52 $15.90 $16.30 $16.71 $17.13 $17.56 $17.99 Transportation Spending $9.45 $9.69 $9.93 $10.18 $10.43 $10.69 $10.96 $11.24 $11.52 $11.80 Other Spending $5.53 $5.67 $5.81 $5.95 $6.10 $6.26 $6.41 $6.57 $6.74 $6.91 Direct Spending $66.05 $67.70 $69.40 $71.13 $72.91 $74.73 $76.60 $78.52 $80.48 $82.49 The per-person per-day spending for overnight guests totals more than $250 in Year 1 and increases with inflation, assumed at 2.5 percent. The daily spending per person for day trips is expected to be approximately $66 in the first year. The table below shows the direct net new spending, based on the analysis. Chargers Stadium and Convention Center Study Chapter 1 - Page 13

14 Table 1-14 Direct Net New Spending to San Diego (000s) Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Food & Beverage $40,019 $45,323 $49,354 $52,450 $54,936 Lodging $48,314 $58,068 $67,782 $75,056 $81,147 Retail $15,060 $17,031 $18,504 $19,636 $20,543 Transportation $9,314 $10,511 $11,384 $12,055 $12,591 Other $5,260 $5,927 $6,407 $6,776 $7,069 $117,967 $136,861 $153,430 $165,974 $176,286 $62,155 $538,061 $91,810 $767,567 $23,243 $201,455 $14,245 $123,692 $7,998 $69,525 $199,451 $1,700,300 Source: Hunden Strategic Partners Spending on lodging and food/beverage are the largest components of direct net new spending to the City of San Diego; however, the impact on hotels is the focus. Between the new room nights generated and the increased ADR from compression, more than $91 million in annual new hotel revenue is expected by Year 10, totaling more than $767 million over the first ten years. The following table shows the new earnings associated with the new economic activity. Table 1-15 Net New Earnings from Direct New Spending (000s) Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Net New Earnings From Direct $38,391 $44,434 $49,671 $53,639 $56,896 From Indirect $12,786 $14,844 $16,654 $18,023 $19,150 From Induced $14,033 $16,275 $18,239 $19,726 $20,948 $65,211 $75,553 $84,563 $91,388 $96,994 Source: Hunden Strategic Partners $64,373 $549,574 $21,666 $184,631 $23,700 $202,082 $109,740 $936,287 Over ten years, the new earnings generated by the new spending is expected to total more than $936 million. The following table shows the new full-time equivalent employment (FTE) associated with the new economic activity. Net New FTE Jobs Table 1-16 Net New Full-Time Equivalent Jobs from New Earnings Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 From Direct 2,105 2,366 2,568 2,697 2,784 From Indirect From Induced ,021 1,072 1,106 3,657 4,110 4,458 4,681 4,831 Source: Hunden Strategic Partners 2, ,106 4,831 Chargers Stadium and Convention Center Study Chapter 1 - Page 14

15 The number of full-time equivalent supported jobs by the Project is expected to be more than 4,800 by stabilization. Fiscal Impact The fiscal impact of the Project is the benefit to the community via taxes generated. HSP has estimated the net new hotel taxes generated by City of San Diego hotels due to the Project. The following table shows the projections of new hotel room taxes from City of San Diego hotels generated over the first ten years of operation. Table 1-17 Fiscal Impact - Net New Hotel Tax from New Lodging Spending at San Diego Hotels due to Project (000s) Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Existing Hotel Occupancy Tax (10.5%) $5,073 $6,097 $7,117 $7,881 $8,520 Deposit to SD Tourism and Marketing Fund (2.0%) $966 $1,161 $1,356 $1,501 $1,623 Proposed Hotel Occupancy Tax (4.0%) $1,933 $2,323 $2,711 $3,002 $3,246 $7,972 $9,581 $11,184 $12,384 $13,389 $9,640 $80,595 $1,836 $15,351 $3,672 $30,703 $15,149 $126,649 Source: Hunden Strategic Partners In total, taxes generated from the City of San Diego hotel room revenues are expected to increase by more than $126 million during the first ten-year period. The following table shows the summary of estimated ten-year impacts for the Project. Chargers Stadium and Convention Center Study Chapter 1 - Page 15

16 Table 1-18 Summary of 10-Year Estimated Impacts Net New Spending (millions) Direct $1,700 Indirect $571 Induced $672 $2,943 Net New Earnings (millions) From Direct $550 From Indirect $185 From Induced $202 $936 New Hotel Tax from New Downtown Hotel Revenue (millions) Existing Hotel Occupancy Tax (10.5%) $80.6 Deposit to SD Tourism and Marketing Fund (2.0%) $15.4 Proposed Hotel Occupancy Tax (4.0%) $30.7 $126.6 Source: Hunden Strategic Partners The net new spending for the Project totals $2.9 billion over the first ten-year period, including more than $930 million in new earnings, and more than $126 million in new hotel taxes generated at City of San Diego hotels. Chargers Stadium and Convention Center Study Chapter 1 - Page 16