ALAMEDA COUNTY COMMUNITY DEVELOPMENT AGENCY P L A N N I N G D E P A R T M E N T Chris Bazar Agency Director Albert Lopez Planning Director 224 West Winton Ave Room 111 Hayward, California 94544-1215 phone 510.670.5400 fax 510.785-8793 www.acgov.org/cda MEMORANDUM TO: FROM: Board of Supervisors Transportation and Planning Committee Chris Bazar, Director, Community Development Agency Albert Lopez, Planning Director DATE: March 5, 2018 SUBJECT: Bed and Breakfast Inns, South Livermore Valley Area Plan BACKGROUND COUNTY POLICY AND CODE South Livermore Valley Area Plan and ECAP: On February 3, 1993, the Board of Supervisors approved the South Livermore Valley Area Plan (SLVAP), a County planning document designed to enhance viticulture, other long-term agriculture, related job growth, and tourism in the unincorporated South Livermore Valley Area (SLVA). A similar and complementary set of polices was adopted by the City of Livermore. The SLVAP policies were incorporated into the East County Area Plan (ECAP). Those policies included provisions for allowing bed-andbreakfast establishments (B&Bs) as conditional uses. Among the policies adopted by the Board is ECAP Policy 344: - The County shall encourage the promotion of the South Livermore Valley as a premier wine-producing center by encouraging appropriate tourist-attracting and supporting uses, such as bed and breakfast establishments or other uses ECAP Program 125 also discusses appropriate commercial uses, including B&Bs; the program reads, in part: - The County shall limit new commercial uses within the Cultivated Agricultural Overlay District to appropriate small-scale uses that promote the area s image as a wine region, subject to issuance of a conditional use permit New commercial uses proposed as a part of a bonus density application should be limited to the 10% maximum area of each parcel not dedicated to cultivated agriculture, subject to appropriate coverage limitations, and should be sited to maximize efficient use of cultivated lands. Wineries and small bed-andbreakfast establishments are examples of appropriate commercial uses. Bed-and-breakfast establishments shall be limited to existing homes or homes permitted under the South Livermore Valley Area Plan; construction of separate additional structures shall not be permitted... The Alameda County Zoning Ordinance discusses B&Bs within Article VII, Combining CA (Cultivated Agriculture) Districts. Section 17.30.170(F)(2)(a) specifies that a Bed and breakfast establishment, if conducted within an existing or permitted dwelling: maximum of fourteen (14) rooms available for guests is a Conditional Use in the SLVA subject to review by the Board of Zoning Adjustments under Section 17.54.130.
Board of Supervisors Transportation and Planning Committee Bed and Breakfast Inns, South Livermore Valley Area Plan March 5, 2018 Page 2 ECAP / Measure D Initiative and Applicable Policies: In November 2000, the Alameda County electorate approved the Save Agriculture and Open Space Lands Initiative (Measure D). The Initiative amended portions of the County General Plan, including the East County Area Plan (ECAP). The portions of the ECAP revised or enacted under the Initiative may not be amended except by voter approval, with the exception that the Board of Supervisors can impose more stringent restrictions on development and land use and it may make technical or nonsubstantive changes to the Initiative provisions. Existing and future County plans, zoning regulations, etc. must be consistent with the provisions of the Initiative. Portions of the ECAP and other planning documents that were not amended or enacted by the Initiative may still be modified without voter approval provided the modifications are consistent with the provisions of the Initiative. The Initiative added, deleted, and revised more than 60 ECAP policies and programs. Some of these amendments, along with a handful of previous ECAP policies, apply generally to land use and development standards in the South Livermore Valley Area. Planning staff has discussed the applicability of such policies and programs with County Counsel and believes that among these amendments and policies, the following may apply to B&B establishments. Staff points out that these policies mostly apply to permit findings and development standards such as visual treatment, water supply and septic management, rather than land use limitations, although one of them (addressed below) has land use implications: Policy 1 (Measure D): The County shall identify and maintain a County Urban Growth Boundary that divides areas inside the Boundary, next to existing cities, generally suitable for urban development from areas outside suitable for long-term protection of natural resources, agriculture, public health and safety, and buffers between communities. The County Urban Growth Boundary shall be the Urban Growth Boundary of the City of Pleasanton starting at its eastern junction with U.S. I-580 clockwise to U.S. I-580, west to the boundary of the East County Area Plan, north to the proposed western Urban Growth Boundary for the City of Dublin on the November 7, 2000 election ballot, to the Alameda-Contra Costa County line, east to the eastern boundary of the East Dublin Specific Plan on February 1, 2000, south to U.S. I-580, east to the city limits of the City of Livermore, the northern Livermore city limits, except where the northern city limits are below U.S. I-580 the Boundary shall be I-580, to the eastern city limits of Livermore, to the proposed southern Urban Growth Boundary for Livermore on the March 7, 2000 election ballot to U.S. I-580, and west to the City of Pleasanton Urban Growth Boundary. Policy 82 (Measure D): In areas designated Large Parcel Agriculture, the County shall permit limited agriculture enhancing commercial uses that primarily support the area s agricultural production, are not detrimental to existing or potential agricultural use, demonstrate an adequate and reliable water supply, and comply with other policies and programs of the Initiative. Policy 83 (Original ECAP): The County shall require any proposal for a visitor-serving commercial use in an agricultural area to meet all of the following criteria: The project will primarily promote agricultural products grown or processed in Alameda County; The project is compatible with existing agricultural production activities in the area; The project mitigates, to the satisfaction of the County, all potential conflicts with surrounding agricultural uses and other environmental impacts; and
Board of Supervisors Transportation and Planning Committee Bed and Breakfast Inns, South Livermore Valley Area Plan March 5, 2018 Page 3 The project can demonstrate an adequate and reliable water source that does not significantly diminish the availability of water to serve existing or potential agricultural use. Policy 115 (Measure D): In all cases appropriate building materials, landscaping and screening shall be required to minimize the visual impact of development. Development shall blend with and be subordinate to the environment and character of the area where located, so as to be as unobtrusive as possible and not detract from the natural, open space or visual qualities of the area. To the maximum extent practicable, all exterior lighting must be located, designed and shielded so as to confine direct rays to the parcel where the lighting is located. Large Parcel Agriculture (Measure D definition) requires a minimum parcel size of 100 acres, except as provided in Programs 40 and 41. The maximum building intensity for non-residential buildings shall be.01 FAR (floor area ratio) but not less than 20,000 square feet... One single family home per parcel is allowed provided that all other County standards are met for adequate road access, sewer and water facilities, building envelope location, visual protection, and public services. Residential and residential accessory buildings shall have a maximum floor space of 12,000 square feet. Additional residential units may be allowed if they are occupied by farm employees required to reside on-site. Apart from infrastructure under Policy 13, all buildings shall be located on a contiguous development envelope not to exceed 2 acres except they may be located outside the envelope if necessary for security reasons or, if structures for agricultural use, necessary for agricultural use. Subject to the provisions of the Initiative, this designation permits agricultural uses, visitor-serving commercial facilities (by way of illustration, tasting rooms, fruit stands, bed and breakfast inns) and similar uses compatible with agriculture. Different provisions may apply in the South Livermore Valley Plan Area, or in the North Livermore Intensive Agriculture Area. [The foregoing definition has land use implications. Recalling that the original requirement for B&B establishments includes locating within existing or permitted dwellings (which imply a residential use and associated FAR limitations of 12,000 square feet), B&Bs are also referred to as visitor-serving commercial uses, which implies the larger allowance of.01 FAR or 20,000 square feet minimum building size. This ambiguity may need to be resolved. In either case, this definition strongly implies that B&B establishments are generally compatible with agriculture.] DISCUSSION Policy 253 (Measure D): The County shall approve new development only upon verification that an adequate, long-term, sustainable, clearly identified water supply will be provided to serve the development, including in times of drought. 1. Present Conditions: Since adoption of the SLVAP, only one B&B has become established in the SLVA. This establishment is the Purple Orchid Inn, located at 4549 Cross Road, in the northeast section of the SLVA. The Purple Orchid Inn offers 10 rooms for lodging, a spa, and amenities for events such as weddings. A handful of other developers have proposed B&Bs in the SLVA in the last 25 years. Currently, the Purple Orchid Inn proposes to add two rooms to its facility, and another developer, in association with Rios-Lovell Winery, has submitted an early concept to construct a new B&B with 14 rooms, a restaurant and other amenities. All other current motels, hotels, inns and other commercial lodging establishments are located near
Board of Supervisors Transportation and Planning Committee Bed and Breakfast Inns, South Livermore Valley Area Plan March 5, 2018 Page 4 the I-580 freeway, several miles north of the SLVA. Staff also understands that the City of Livermore has tentatively approved a concept for a downtown hotel. 2. Desire and Demand for Additional B&B Establishments: Staff has investigated the demand for B&Bs or other appropriate lodging for the SLVA and the eastern Tri-Valley in general. While no hard demand-side data appears to exist, there is some information from city and private sources that suggests a desire for more lodging of different types, or at least that if the availability of lodging were greater it would make the area more accessible and would attract more multi-day visitation for both business and leisure. The accommodation and food service industries in the Tri-Valley already support almost 3,500 jobs as of 2016 (Dean Runyan Associates, Tri-Valley, California Travel Impacts, 2012-2016, June 2017) and occupancy for existing lodging varies from 67% - 81%, depending on the year of record and cost of lodging (CBRE Hotels, Hotel Horizons, September-November 2017 edition). These values appear to be a strong indicator of regional lodging demand, well above the long-term average. In the Tri-Valley, lodging demand is generally greater during weekdays than on weekends (STR, Inc., Tri-Valley CVB for the month of December 2017), suggesting that business and government travel are more significant attractors than leisure travel; however, this is not necessarily an indicator of lack of demand or desire for more leisure lodging with regional cultural appeal, as the existing lodging does not necessarily cater to leisure travelers looking for wine country or other regional experiences. According to a Regional Tourism Asset Assessment prepared for Visit Tri-Valley (Strategic Marketing Group [SMG], 2014), strong desire has been expressed among various community organizations to increase appropriate styles of lodging, including B&Bs and other small to mediumsized facilities, to provide greater access for tourist travelers seeking wine country and regional cultural / recreational experiences. At least some of the SMG analysis focuses on the SLVA, identifying a need for up to 150 rooms in the region, and while it recognizes the desire for small facilities such as B&Bs in a few places, it specifically describes only a single hypothetical 100-150 room resort to primarily serve the dual golf course recreational opportunities of Poppy Ridge and the Course at Wente Bros. In addition, the SMG analysis discusses an overall marketing and outreach strategy for increasing tourism and visitation to the Tri-Valley region. 3. Possible Amendments to Encourage Bed and Breakfast Establishments: In order to accommodate the community desire to establish new B&Bs, it would be necessary to alter ECAP Policy 344, ECAP Program 125 and the Zoning Ordinance. Those amendments could be simple or more extensive, depending upon what the Board deems appropriate. To this end, staff seeks to answer the following questions: a. Should B&Bs continue to be limited to existing or permitted dwelling units, or could they be built as new stand-alone facilities? b. Pursuant to Question (a) above, should B&Bs then be limited to 12,000 square feet maximum floor area, as required for a residential dwelling, or should a more liberal size allowance be
Board of Supervisors Transportation and Planning Committee Bed and Breakfast Inns, South Livermore Valley Area Plan March 5, 2018 Page 5 adopted (e.g., 0.01 FAR or 20,000 square feet) as implied by its identification as a visitorserving commercial use? c. Should an owner / operator be required to maintain his or her residence at the B&B, as is most common, or could the establishment be owned and / or operated by an offsite person? d. Can a B&B appropriately include a full-service restaurant for multiple meals, a spa or an event center? e. Should the County continue the policy that construction of separate additional structures shall not be permitted, or could this requirement be relaxed? f. If the existing requirements are relaxed to make B&Bs more viable, should the County place a limit of the number of applications that may be approved in a given time period? NEXT STEPS: Some possible next steps could be: - Prepare a presentation for community meetings and workshops, describing the issues and seeking public input about the questions above and any other ideas or concerns the community may have. - Seek input from the Planning Commission, the Agricultural Advisory Committee, the City of Livermore, the Livermore Valley Winegrowers Association, the Tri-Valley Conservancy, Visit TriValley and others. - Assemble the information gathered at these meetings, develop draft recommendations for your Committee, the Planning Commission and Board of Supervisors to consider. Attachments: - Dean Runyan Associates, Tri-Valley, California Travel Impacts, 2012-2016, June 2017 - CBRE Hotels, Hotel Horizons, September-November 2017 edition - STR, Inc., Tri-Valley CVB for the month of December 2017 - Strategic Marketing Group[SMG], Regional Tourism Asset Assessment prepared for Visit Tri- Valley, 2014 - Airsage, Airsage Visitor Analytics, Tri-Valley, December 2016 cc: County Counsel
AirSage Visitor Analytics Tri-Valley December 2016
AirSage Company Overview Patented Population Analytics 15 billion location data points per day 100 million mobile devices Consumer privacy protection
AirSage WiSE Platform
Explanation Tri-Valley Tri-Valley Attendees Devices seen in any of the 9 points of interest (POI) as defined below: 1. Vineyards 2. Fairgrounds 3. Outlets 4. Automotive Museum 5. Downtown Danville 6. Downtown Livermore 7. Downtown Pleasanton 8. Emerald Glen Park 9. Dublin Civic Center Resident is a device with a home location inside Alameda and Contra Costa Counties. Visitor is a device with a home location outside of Alameda and Contra Costa Counties. 4
Devices Unique Devices By POI Tri-Valley 12,000 10,000 9,692 8,000 6,000 4,000 4,474 3,918 3,034 3,152 2,564 2,776 3,774 2,000 0 370 936 1,070 834 Vineyards Fairgrounds Outlets Automotive Museum Downtown Livermore 440 1,882 Downtown Danville 916 Downtown Pleasanton 748 196 Emerald Glen Park 1,704 Dublin Civic Center Visitor Resident 5
1-Dec 2-Dec 3-Dec 4-Dec 5-Dec 6-Dec 7-Dec 8-Dec 9-Dec 10-Dec 11-Dec 12-Dec 13-Dec 14-Dec 15-Dec 16-Dec 17-Dec 18-Dec 19-Dec 20-Dec 21-Dec 22-Dec 23-Dec 24-Dec 25-Dec 26-Dec 27-Dec 28-Dec 29-Dec 30-Dec 31-Dec Unique Device Activity By Day 3000 Tri-Valley 2500 2000 1500 1000 500 0 Visitor Resident 6
California Visitor Home Locations Tri-Valley Top Counties from California outside Study Area 1. San Joaquin, CA 2. Santa Clara, CA 3. San Francisco, CA 4. San Mateo, CA 5. Stanislaus, CA 6. Sacramento, CA 7. Los Angeles, CA 8. Orange, CA 9. El Dorado, CA 10. Placer, CA 7
Nationwide Visitor Home Locations Tri-Valley Top Counties outside California 1. Clark, NV 2. Washoe, NV 3. Douglas, NV 4. Maricopa, AZ 5. King, WA 6. Cook, IL 7. Fairfax, VA 8. Salt Lake, UT 9. New York, NY 10. Broward, FL 8
Statewide Visitor Home Locations Tri-Valley 700 600 500 400 Shows the home locations aggregated by top 10 states excluding California California 14,127 devices 300 200 100 0 9
Visitor Arrivals Tri-Valley 1,200 1,000 800 600 400 200 0 10
Devices Visitor Time Spent Tri-Valley 6,000 5,000 4,000 3,000 2,000 1,000 0 1 2 3 4 5 6 7 8 9 10 11 12 Days 11
Percent Total Visitor Income Distribution Tri- Valley 35.0% 30.0% 25.0% Mean Income - $92,100 20.0% 15.0% 10.0% 5.0% 0.0% <$10K $10K - $15K $15K - $25K $25K - $35K $35K - $50K $50K - $75K $75K - $100K >$100K 12
Percent Total Resident Income Distribution Tri- Valley 75.0% 70.0% 65.0% 60.0% 55.0% 50.0% Mean Income - $124,400 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% <$10K $10K - $15K $15K - $25K $25K - $35K $35K - $50K $50K - $75K $75K - $100K >$100K 13
POI Travel Patterns Tri-Valley 90 80 70 60 50 40 30 20 10 0 Outlets & Downtown Livermore Downtown Livermore & Downtown Pleasanton Outlets & Dublin Civic Center Automotive Museum & Downtown Danville Fairgrounds & Downtown Livermore Fairgrounds & Dublin Civic Center Vineyards & Downtown Livermore Resident Visitor * Most frequent two POI travel patterns 14
Unique Device Activity by Hour Tri-Valley 15 0 50 100 150 200 250 300 1:00 AM 2:00 AM 3:00 AM 4:00 AM 5:00 AM 6:00 AM 7:00 AM 8:00 AM 9:00 AM 10:00 AM 11:00 AM 12:00 PM 1:00 PM 2:00 PM 3:00 PM 4:00 PM 5:00 PM 6:00 PM 7:00 PM 8:00 PM 9:00 PM 10:00 PM 11:00 PM Weekday Weekend
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VOLUME XI - ISSUE III SEPTEMBER - NOVEMBER 2017 EDITION PRICE: $545 See use and distribution restrictions on the last page of this report. Downloaded by Barbara Steinfeld, Visit TriValley OAKLAND REGIONAL ECONOMIC SUMMARY Economic activity in the Twelfth District continued to expand at a moderate pace during the reporting period of mid-may through June. Overall price inflation was flat, while upward wage pressures strengthened. Sales of retail goods REGIONAL ECONOMIC SUMMARY were modest, and growth in the consumer and business services sectors remained strong. Conditions in the manufacturing sector improved, and activity in the agriculture sector picked up to a modest pace. Contacts reported robust activity in residential real estate markets, and activity in the commercial sector picked up. Conditions in the financial services sector remained solid. Tourism demand remained strong, although contacts noted that continued uncertainty surrounding immigration policy slowed international bookings at hotels in Southern California. Restaurant sales remained sluggish, and contacts expect the sluggishness to continue through the end of the year. Real estate market activity picked up to a robust pace. Commercial construction activity was solid. Contacts reported an uptick in commercial investment aimed at remodeling and repurposing large retail spaces for healthcare and entertainment services. Financing conditions for commercial projects tightened slightly." Federal Reserve Bank Beige Book, July 2017 Oakland: Next 4 Quarters The arrows show the forecast direction of change over the next 4 quarters vs. the previous 4 quarters. Green indicates the change will be above the long run average, yellow indicates it will be the same, and orange indicates it will be below. Occupancy Occupancy will decrease to 75.0%, a decline over the past 4 quarters' rate of 77.0%, but above the long run average of 67.4% Average Daily Rate ADR growth expectations are weakening, 2.5% vs. the past 4 quarters' rate of 3.3%, and are below the long run average of 3.6% Revenue Per Available Room RevPAR change projections are falling to negative 0.2% as compared to the past 4 quarters' rate of positive 0.6%, and are lower than the long run average of positive 4.6% Supply (orange indicates above long-term average) Supply growth will stay about the same at 2.0%. This is greater than the long run average of 1.3% Demand Forecast demand change is falling, negative 0.7% vs. the past 4 quarters' rate of negative 0.6%, and is below the long run average of positive 2.1% Source: CBRE Hotels' Americas Research, Q2 2017 VOLUME XI - ISSUE III HOTEL MARKET SUMMARY SEPTEMBER - NOVEMBER 2017 EDITION By year-end 2017, Oakland hotels are forecast to see a RevPAR decrease of 0.9%. This is the result of an estimated decline in occupancy of 2.4% and a 1.6% gain in average daily room rates (ADR). The 0.9% decline in Oakland RevPAR HOTEL MARKET SUMMARY is less than the national projection of a 2.8% increase. Both the upper and lower-priced segments of Oakland are expected to show negative RevPAR change by year end. Upper-priced hotels are forecast to attain a 0.6% gain in ADR, but suffer a 1.4% decrease in occupancy, resulting in a 0.8% RevPAR decline. Lower-priced hotels are projected to experience an ADR growth rate of 1.3%, along with a 3.5% loss in occupancy, resulting in a 2.2% RevPAR decline. Looking towards 2018, Oakland RevPAR is expected to grow 0.6%, reversing the downward trend of 2017. Prospects for RevPAR growth in the upper-priced segment (positive 1.1%) are better than in the lower-priced segment (negative 0.3%). Oakland market occupancy levels are expected to range from 74.2% to 75.8% during the 5-year forecast period. Oakland Forecast Forecast Summary Summary YEAR OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR 2012 71.5% 6.2% $99.29 8.7% $70.95 15.4% 2013 73.8% 3.3% $106.86 7.6% $78.86 11.2% 2014 77.0% 4.3% $116.73 9.2% $89.86 14.0% 2015 79.4% 3.1% $130.91 12.2% $103.92 15.6% 2016 77.7% -2.1% $142.34 8.7% $110.65 6.5% 2017F 75.8% -2.4% $144.61 1.6% $109.68-0.9% 2018F 74.6% -1.6% $147.89 2.3% $110.36 0.6% 2019F 74.2% -0.6% $150.45 1.7% $111.64 1.2% 2020F 74.3% 0.1% $152.81 1.6% $113.53 1.7% 2021F 74.8% 0.6% $155.97 2.1% $116.62 2.7% Source: CBRE Hotels' Americas Research, STR, Q2 2017 Long Run Averages 1988 to 2016 EXHIBIT Occupancy: 1**: Performance 67.4%, ADR Change: Grade 3.6%, vs. RevPAR Long Change: Run 4.6% Average EXHIBIT 1**: Performance Grade vs. Long Run Average 3 Number of Standard Deviations 2 1 0-1 -2 Occupancy ADR Change RevPAR Change -3 '12 '13 '14 '15 '16 '17F '18F '19F '20F '21F Source: CBRE Hotels' Americas Research, STR, Q2 2017 **See Appendix for exhibit descriptions SEPTEMBER - NOVEMBER 2017 EDITION PRICE: $545
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Oakland Economic Summary Below are a select number of variables that drive the CBRE Hotels Americas Research econometric forecasts contained in this report. Income and employment are important barometers of economic health and are used in every Hotel Horizons forecast model. The lodging market is part of the larger economy, and the forces that affect us nationally also affect lodging, but in different magnitudes and time periods (see Exhibits 4 and 5 below). Exhibits 2-6 provide an overview of current economic history and forecast, and provide explanation of what to expect in the future, and how that affects the lodging industry. Exhibit 2*: Income Change 15.0% 10.0% 5.0% 0.0% -5.0% Real Personal Income See graph below Exhibit 3*: Employment Change -10.0% -8.0% '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 Source: CBRE EA, Q2 2017 Source: CBRE EA, Q2 2017 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% Total Payroll Employment See graph below Exhibit 4*: Quarterly Income vs. RevPAR Change Income (Left) RevPAR (Right) Exhibit 5*: Quarterly Employment vs. Demand Change Employment (Left) Demand (Right) Source: CBRE EA, CBRE Hotels, STR, Q2 2017 Source: CBRE EA, CBRE Hotels, STR, Q2 2017 Exhibit 6*: Average Annual Growth Rates 4% 3% Oakland 1988 to 2016 Oakland 2017 to 2021 3.1% 2.6% 2.8% 2.9% 2.6% 2% 1% 1.2% 0.9% 1.8% 0% Change in Total Employment Change in Consumer Price Index Change in Gross Metro Product Change in Real Personal Income Source: CBRE EA, Moody's Analytics, Q2 2017 *See Appendix for exhibit descriptions P. 2 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Oakland Hotel Summary The graphs on the left illustrate the magnitude of change in performance during the historical and forecasted period 2012 to 2021. Used as a relative benchmark, each market segment is plotted against a common index value of 2012 = 100. This method provides clear insight of how each market segment performed and is expected to perform in relation to others in the specified period. The charts on the right compare near-term historical compound annual growth rates (CAGR) to the CAGRs for the forecast period. Exhibit 7*: Occupancy Change All U.S. Lower-Priced Hotels 114 112 110 108 106 104 102 100 Source: CBRE Hotels, STR, Q2 2017 Exhibit 8*: ADR Change All U.S. Lower-Priced Hotels 170 160 150 140 130 120 110 100 Source: CBRE Hotels, STR, Q2 2017 Exhibit 9*: RevPAR Change All U.S. Lower-Priced Hotels 170 160 150 140 130 120 110 100 Upper-Priced Hotels All Hotels Upper-Priced Hotels All Hotels Upper-Priced Hotels All Hotels Exhibit 10*: Compound Average Annual Supply Change Past 5 Years Next 5 Years 2.0% 1.4% 1.0% 0.9% 0.5% 0.0% -0.1% -0.1% -0.1% -1.0% All Hotels Upper-Priced Lower-Priced Source: CBRE Hotels, STR, Q2 2017 Exhibit 11*: Compound Average Annual Demand Change Past 5 Years Next 5 Years 3.0% 2.5% 2.0% 2.0% 1.5% 1.2% 1.0% 0.6% 0.0% 0.0% -1.0% All Hotels Upper-Priced Lower-Priced Source: CBRE Hotels, STR, Q2 2017 Exhibit 12*: Compound Average Annual RevPAR Change Past 5 Years Next 5 Years 14.0% 13.2% 12.0% 11.8% 10.8% 10.0% 8.0% 6.0% 4.0% 2.0% 1.5% 1.5% 1.3% 0.0% All Hotels Upper-Priced Lower-Priced Source: CBRE Hotels, STR, Q2 2017 *See Appendix for exhibit descriptions Source: CBRE Hotels, STR, Q2 2017 P. 3 / CBRE HOTELS' AMERICAS RESEARCH *See Appendix for exhibit descriptions
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Oakland Forecast - All Hotels YEAR PERIOD OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Δ SUPPLY Δ DEMAND 2012 Annual 71.5% 6.2% $99.29 8.7% $70.95 15.4% -0.2% 6.0% 2013 Annual 73.8% 3.3% $106.86 7.6% $78.86 11.2% -0.3% 3.0% 2014 1 70.6% 6.0% $109.04 8.0% $76.97 14.5% 0.0% 6.0% 2014 2 79.3% 3.8% $114.23 8.4% $90.59 12.6% -0.1% 3.8% 2014 3 84.1% 2.7% $122.92 10.4% $103.41 13.4% 0.0% 2.7% 2014 4 73.9% 5.2% $119.70 9.9% $88.50 15.6% -0.1% 5.1% 2014 Annual 77.0% 4.3% $116.73 9.2% $89.86 14.0% 0.0% 4.3% 2015 1 74.5% 5.5% $121.17 11.1% $90.28 17.3% -0.1% 5.5% 2015 2 82.4% 3.9% $128.54 12.5% $105.90 16.9% -0.2% 3.7% 2015 3 85.6% 1.8% $139.35 13.4% $119.33 15.4% -0.9% 0.9% 2015 4 75.0% 1.5% $133.65 11.7% $100.28 13.3% -1.0% 0.5% 2015 Annual 79.4% 3.1% $130.91 12.2% $103.92 15.6% -0.5% 2.6% 2016 1 74.1% -0.5% $137.59 13.5% $101.95 12.9% -0.7% -1.3% 2016 2 81.3% -1.3% $143.29 11.5% $116.55 10.1% -0.1% -1.3% 2016 3 82.7% -3.5% $147.97 6.2% $122.31 2.5% 0.6% -2.9% 2016 4 72.9% -2.9% $139.72 4.5% $101.83 1.5% 1.8% -1.1% 2016 Annual 77.7% -2.1% $142.34 8.7% $110.65 6.5% 0.4% -1.7% 2017 1 71.9% -2.9% $140.08 1.8% $100.73-1.2% 2.8% -0.2% 2017 2 80.5% -1.0% $144.14 0.6% $116.03-0.4% 2.9% 1.9% 2017F 3 80.5% -2.6% $147.68-0.2% $118.95-2.7% 3.3% 0.6% 2017F 4 70.4% -3.4% $146.23 4.7% $102.96 1.1% 2.6% -0.9% 2017F Annual 75.8% -2.4% $144.61 1.6% $109.68-0.9% 2.9% 0.4% 2018F Annual 74.6% -1.6% $147.89 2.3% $110.36 0.6% 0.6% -1.0% 2019F Annual 74.2% -0.6% $150.45 1.7% $111.64 1.2% 0.7% 0.1% 2020F Annual 74.3% 0.1% $152.81 1.6% $113.53 1.7% 1.1% 1.2% 2021F Annual 74.8% 0.6% $155.97 2.1% $116.62 2.7% 1.4% 2.0% 2016 2Q Year to Date 77.7% -0.9% $140.58 12.4% $109.27 11.4% -0.4% -1.3% 2017 2Q Year to Date 76.2% -1.9% $142.23 1.2% $108.40-0.8% 2.9% 0.9% 2017 2Q Trailing 4 Qtrs 77.0% -2.6% $143.15 3.3% $110.19 0.6% 2.0% -0.6% Source: CBRE Hotels' Americas Research, STR, Q2 2017 Exhibit 13*: Oakland Standardized Changes in Real RevPAR Movements Over Time Exhibit 13*: Oakland Standardized Changes in Real RevPAR Movements Over Time 3 2 U.S. Oakland Number of Standard Deviations 1 0-1 -2-3 -4 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017F 2019F 2021F Source: CBRE Hotels' Americas Research, STR, Q2 2017 *See Appendix for exhibit description P. 4 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Oakland Forecast - Upper-Priced Hotels YEAR PERIOD OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Δ SUPPLY Δ DEMAND 2012 Annual 75.2% 6.0% $125.26 8.3% $94.17 14.8% 0.0% 6.0% 2013 Annual 76.9% 2.3% $134.76 7.6% $103.68 10.1% -0.9% 1.5% 2014 1 72.5% 5.1% $139.86 8.2% $101.34 13.8% -0.3% 4.8% 2014 2 81.5% 1.6% $144.23 8.9% $117.47 10.7% 0.0% 1.6% 2014 3 86.2% 1.7% $153.67 10.0% $132.41 11.9% 0.0% 1.7% 2014 4 76.7% 3.6% $149.79 9.5% $114.84 13.4% 0.0% 3.6% 2014 Annual 79.2% 2.9% $147.14 9.2% $116.52 12.4% -0.1% 2.8% 2015 1 75.6% 4.4% $155.90 11.5% $117.92 16.4% 0.0% 4.4% 2015 2 84.0% 3.1% $161.32 11.9% $135.52 15.4% -0.5% 2.7% 2015 3 87.4% 1.4% $172.06 12.0% $150.37 13.6% -1.4% 0.0% 2015 4 77.2% 0.7% $165.24 10.3% $127.57 11.1% -1.4% -0.7% 2015 Annual 81.0% 2.4% $163.85 11.4% $132.80 14.0% -0.8% 1.5% 2016 1 76.1% 0.6% $174.54 12.0% $132.76 12.6% -0.9% -0.4% 2016 2 83.5% -0.6% $179.00 11.0% $149.44 10.3% 0.5% -0.1% 2016 3 85.2% -2.5% $182.46 6.0% $155.52 3.4% 1.5% -1.0% 2016 4 75.5% -2.1% $172.59 4.4% $130.38 2.2% 3.9% 1.7% 2016 Annual 80.1% -1.2% $177.33 8.2% $141.98 6.9% 1.3% 0.0% 2017 1 73.9% -2.9% $176.94 1.4% $130.71-1.5% 6.1% 3.0% 2017 2 83.4% -0.1% $178.55-0.3% $148.88-0.4% 5.1% 5.0% 2017F 3 83.7% -1.8% $179.20-1.8% $150.06-3.5% 5.4% 3.6% 2017F 4 74.8% -1.0% $178.75 3.6% $133.65 2.5% 3.8% 2.8% 2017F Annual 78.9% -1.4% $178.39 0.6% $140.81-0.8% 5.1% 3.6% 2018F Annual 78.4% -0.7% $181.70 1.9% $142.42 1.1% 0.8% 0.1% 2019F Annual 77.8% -0.7% $184.56 1.6% $143.62 0.8% 1.1% 0.3% 2020F Annual 77.9% 0.2% $187.33 1.5% $146.00 1.7% 1.8% 1.9% 2021F Annual 78.1% 0.3% $191.02 2.0% $149.27 2.2% 2.1% 2.4% 2016 2Q Year to Date 79.8% 0.0% $176.88 11.4% $141.14 11.4% -0.2% -0.2% 2017 2Q Year to Date 78.6% -1.5% $177.79 0.5% $139.79-1.0% 5.6% 4.0% 2017 2Q Trailing 4 Qtrs 79.5% -1.9% $177.78 2.9% $141.27 0.9% 4.2% 2.1% Source: CBRE Hotels' Americas Research, STR, Q2 2017 Oakland Financial Benchmarks* - Full-Service Hotels FULL-SERVICE HOTELS - PERCENT OF TOTAL REVENUE - 2016 Financial Line Item Mountain / Pacific Region ADR Between $125 & $250 150 to 300 Rooms Rooms Revenue 70.5% 70.9% 72.8% Food and Beverage Revenue 24.3% 24.9% 22.6% Total Departmental Expenses 38.8% 35.5% 37.1% Total Departmental Profit 61.2% 64.5% 62.9% Total Undistributed Expenses 23.1% 25.1% 26.1% Gross Operating Profit** 38.1% 39.4% 36.8% *Data from 2017 Trends in the Hotel Industry report Oakland Upper-Price Average ADR: $177.33 **Before deductions for management fees and non-operating income and expenses. Oakland Upper-Price Average Size: 187 Rooms Source: CBRE Hotels' Americas Research, 2016 For a more comparable and detailed financial comparison, we recommend a Benchmarker SM report. Please contact Viet Vo at +1 404 812 5112 for more information. P. 5 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Oakland Forecast - Lower-Priced Hotels YEAR PERIOD OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Δ SUPPLY Δ DEMAND 2012 Annual 68.2% 6.3% $74.69 9.3% $50.97 16.2% -0.3% 6.0% 2013 Annual 71.1% 4.2% $81.19 8.7% $57.74 13.3% 0.2% 4.5% 2014 1 69.0% 6.7% $81.54 8.6% $56.27 15.9% 0.3% 7.0% 2014 2 77.5% 5.9% $87.42 9.1% $67.73 15.5% -0.1% 5.8% 2014 3 82.4% 3.7% $95.58 11.4% $78.75 15.5% -0.1% 3.6% 2014 4 71.6% 6.6% $92.30 11.6% $66.09 19.0% -0.1% 6.5% 2014 Annual 75.1% 5.6% $89.47 10.2% $67.21 16.4% 0.0% 5.6% 2015 1 73.5% 6.6% $90.79 11.3% $66.76 18.6% -0.1% 6.4% 2015 2 81.0% 4.6% $99.77 14.1% $80.83 19.3% 0.0% 4.6% 2015 3 84.1% 2.1% $110.77 15.9% $93.20 18.4% -0.4% 1.7% 2015 4 73.2% 2.2% $105.56 14.4% $77.27 16.9% -0.6% 1.6% 2015 Annual 78.0% 3.8% $101.96 14.0% $79.51 18.3% -0.3% 3.5% 2016 1 72.4% -1.5% $104.70 15.3% $75.84 13.6% -0.6% -2.1% 2016 2 79.5% -1.9% $111.21 11.5% $88.43 9.4% -0.6% -2.4% 2016 3 80.5% -4.4% $116.69 5.3% $93.88 0.7% -0.2% -4.6% 2016 4 70.5% -3.6% $108.86 3.1% $76.80-0.6% 0.0% -3.6% 2016 Annual 75.7% -2.9% $110.56 8.4% $83.74 5.3% -0.3% -3.2% 2017 1 70.2% -3.1% $105.21 0.5% $73.81-2.7% 0.1% -3.1% 2017 2 77.9% -2.0% $111.40 0.2% $86.83-1.8% 1.1% -0.9% 2017F 3 77.7% -3.4% $117.46 0.7% $91.28-2.8% 1.4% -2.0% 2017F 4 66.5% -5.7% $113.42 4.2% $75.42-1.8% 1.5% -4.3% 2017F Annual 73.1% -3.5% $112.01 1.3% $81.86-2.2% 1.0% -2.5% 2018F Annual 71.3% -2.5% $114.55 2.3% $81.63-0.3% 0.5% -2.0% 2019F Annual 70.9% -0.4% $116.65 1.8% $82.76 1.4% 0.3% -0.1% 2020F Annual 71.0% 0.0% $118.12 1.3% $83.82 1.3% 0.5% 0.5% 2021F Annual 71.6% 1.0% $120.50 2.0% $86.33 3.0% 0.7% 1.7% 2016 2Q Year to Date 76.0% -1.7% $108.11 13.2% $82.13 11.3% -0.6% -2.2% 2017 2Q Year to Date 74.1% -2.5% $108.49 0.3% $80.35-2.2% 0.6% -1.9% 2017 2Q Trailing 4 Qtrs 74.8% -3.3% $110.78 2.4% $82.84-1.0% 0.2% -3.1% Source: CBRE Hotels' Americas Research, STR, Q2 2017 Oakland Financial Benchmarks* - Limited-Service Hotels LIMITED-SERVICE HOTELS - PERCENT OF TOTAL REVENUE - 2016 Financial Line Item Mountain / Pacific Region ADR Between $75 & $115 Under 100 Rooms Rooms Revenue 97.5% 98.5% 98.4% Food and Beverage Revenue 0.0% 0.0% 0.0% Total Departmental Expenses 25.5% 27.7% 26.6% Total Departmental Profit 74.5% 72.3% 73.4% Total Undistributed Expenses 26.9% 30.9% 31.0% Gross Operating Profit** 47.5% 41.4% 42.4% *Data from 2017 Trends in the Hotel Industry report Oakland Lower-Price Average ADR: $110.56 **Before deductions for management fees and non-operating income and expenses. Oakland Lower-Price Average Size: 68 Rooms Source: CBRE Hotels' Americas Research, 2016 For a more comparable and detailed financial comparison, we recommend a Benchmarker SM report. Please contact Viet Vo at +1 404 812 5112 for more information. P. 6 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Oakland Airbnb Summary Below is an overview of Airbnb s presence in this market. The estimates of Airbnb performance come from Airdna, a firm that provides data and analytics on Airbnb rental performance for 4 million+ Airbnb listings worldwide. Figure 1 shows the total number of units available, sold and revenue generated during from July 2016 June 2017 along with the calculated Occupancy, Average Daily Rate(ADR), RevPAR, and year-over-year growth rates. Figure 2 shows the percent of units and revenue by unit type. Figure 3 shows the average daily number of active Airbnb units by month. Figure 4 lists the ADRs broken down by unit types and number of bed rooms over the past 12 months. More detailed reports on Airbnb performance in this market can be found at https://pip.cbrehotels.com/airbnbinsights. Figure 1: July 2016 June 2017 Airbnb Performance METRIC 2017 Y-o-Y CHANGE Occupancy 63.3% -0.9% ADR $114.83 1.4% RevPAR $72.73 0.5% Available Supply 906,515 32.7% Units Sold 574,187 31.5% Total Revenue $65,961,056 33.4% Source: Airdna, CBRE Hotels' Americas Research, Q2 2017 Figure 2: Percent of Active Units and Revenue by Listing Type 2017 TTM Active Units 2017 TTM Revenue 3.1% 1.0% 44.5% 52.5% 25.8% 73.3% Entire Home/Apt Private Room Shared Room Figure 3: July 2016 June 2017 Active Units by Month Active Units 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 JUL 2016 AUG 2016 SEP 2016 OCT 2016 NOV 2016 DEC 2016 JAN 2017 FEB 2017 MAR 2017 APR 2017 MAY 2017 JUN 2017 Figure 4: July 2016 June 2017 ADRs by Unit Type and Bedroom Count 2017 Average Daily Rate ($) Glossary 0 100 200 300 400 500 Bedrooms Active Units - a unit is considered active if it had at least one night sold during the 1 $114.93 month Average Daily Rate (ADR) - The revenue collected divided by the units sold. Bedrooms - The number of rooms that are available within each unit. 2 $168.47 Entire home/apt Private room Shared room 3 4+ $70.12 $42.28 $236.59 $415.90 Unit Types: Detailed Report on Airbnb data for any U.S. Market Can be found at: https://pip.cbrehotels.com/airbnbinsights Entire Home - The guest has complete and sole access to the entire Unit during the stay. Private Room - The guest has their own sleeping area, but shares access to the Unit common areas with others. Shared Room - The guest rents a common area, like an airbed in a living room. P. 7 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS National Horizon Profile 2018 Average Annual Supply Change SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND This page showcases the CBRE Hotels' Americas Research Hotel Horizons forecasting universe. The map below displays average supply change for 2018. Quarterly Hotel Horizons reports are available for the nation and all the markets shown below. https://pip.cbrehotels.com 2 Albany 2 Dayton 2 Milwaukee 2 Raleigh-Durham 3 Albuquerque 1 Denver 2 Minneapolis 3 Richmond 3 Anaheim 2 Detroit 1 Nashville 2 Sacramento 2 Atlanta 1 Fort Lauderdale 3 New Orleans 3 Saint Louis 1 Austin 2 Fort Worth 1 New York 3 Salt Lake City 2 Baltimore 2 Hartford 2 Newark 2 San Antonio 2 Boston 2 Houston 3 Norfolk-VA Beach 2 San Diego 1 Charleston 2 Indianapolis 3 Oahu 2 San Francisco 1 Charlotte 3 Jacksonville 3 Oakland 2 San Jose-Santa Cruz 2 Chicago 2 Kansas City 2 Omaha 1 Savannah 2 Cincinnati 2 Long Island 3 Orlando 1 Seattle 3 Cleveland 2 Los Angeles 2 Philadelphia 2 Tampa 3 Columbia 1 Louisville 2 Phoenix 3 Tucson 2 Columbus 2 Memphis 2 Pittsburgh 2 Washington DC 1 Dallas 1 Miami 1 Portland 3 West Palm Beach Less Than 2% Between 2% and 5% Greater Than 5% Source: CBRE Hotels' Americas Research, STR, Q2 2017 P. 8 CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Oakland Market Profile Total Room Supply: 19,882 Oakland Top Brands UPPER-PRICED BRANDS PROPERTIES ROOMS % MARKET LOWER-PRICED BRANDS PROPERTIES ROOMS % MARKET Marriott 4 1,450 7.3% Extended Stay America 10 1,213 6.1% Courtyard 8 1,301 6.5% Motel 6 9 1,140 5.7% DoubleTree 3 796 4.0% Best Western Plus 7 605 3.0% Hilton 2 689 3.5% La Quinta Inns & Suites 5 556 2.8% Hyatt House 4 646 3.2% Holiday Inn 2 368 1.9% Source: STR, Q2 2017 Oakland Supply Pipeline Upper-Priced Lower-Priced Unclassified / Independent PHASE PROPERTIES ROOMS % MARKET PROPERTIES ROOMS % MARKET PROPERTIES ROOMS % MARKET Unconfirmed 1 93 0.5% 0 0 0.0% 0 0 0.0% Planning 4 886 4.5% 10 1,382 7.0% 0 0 0.0% Final Planning 7 890 4.5% 4 375 1.9% 0 0 0.0% In Construction 1 115 0.6% 0 0 0.0% 0 0 0.0% Total 13 1,984 10.0% 14 1,757 8.8% 0 0 0.0% Source: STR, CBRE Hotels' Americas Research, Q2 2017 Pipeline Status Definitions PHASE DEFINITION Unconfirmed* Potential projects that remain unconfirmed at this time. STR is unable to verify the existence of these projects through a corporate chain feed or other verifiable source. Planning Final Planning In Construction Source: STR, Q2 2017 Confirmed, under contract projects where construction will begin in more than 12 months. Confirmed, under contract projects where construction will begin within the next 12 months. Vertical construction on the physical building has begun. This does not include construction on any sub-grade structures including, but not limited to, parking garages, underground supports/footers or any other type of sub-grade construction. *Formerly Pre-Planning P. 9 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Oakland Submarket Map Total Room Supply: 19,882 Oakland Submarket Summary Source: CBRE EA, Q2 2017 SUBMARKET UPPER-PRICED LOWER-PRICED TOTALS Properties Rooms % Market Properties Rooms % Market Properties Rooms % Market Pleasanton / Livermore 18 2,807 14.1% 24 2,129 10.7% 42 4,936 24.8% Northeast / Concord 10 2,106 10.6% 47 2,976 15.0% 57 5,082 25.6% Oakland / Berkeley / Hayward 22 4,428 22.3% 85 5,436 27.3% 107 9,864 49.6% Source: STR, Q2 2017 Total 50 9,341 47.0% 156 10,541 53.0% 206 19,882 100.0% P. 10 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Submarket Profile - Pleasanton / Livermore Total Room Supply: 4,936 The Pleasanton / Livermore submarket includes hotels in Livermore and Pleasanton, as well as hotels in San Ramon, Dublin, and Danville. Submarket Rank* 104% Pleasanton / Livermore Submarket Inventory UPPER-PRICED PROPERTIES ROOMS %SUBMKT LOWER-PRICED PROPERTIES ROOMS %SUBMKT Inventory 18 2,807 56.9% Inventory 24 2,129 43.1% UPPER-PRICED BRANDS BY SHARE PROPERTIES ROOMS %SUBMKT LOWER-PRICED BRANDS BY SHARE PROPERTIES ROOMS %SUBMKT Marriott 2 610 12.4% Extended Stay America 5 632 12.8% DoubleTree 2 418 8.5% Holiday Inn 1 222 4.5% Courtyard 3 402 8.1% Motel 6 2 178 3.6% Pleasanton / Livermore Construction Pipeline Source: STR, Q2 2017 UPPER-PRICED LOWER-PRICED UNCLASSIFIED/INDEPENDENT PHASE PROPERTIES ROOMS %SUBMKT PROPERTIES ROOMS %SUBMKT PROPERTIES ROOMS %SUBMKT Unconfirmed 0 0 0.0% 0 0 0.0% 0 0 0.0% Planning 0 0 0.0% 1 119 2.4% 0 0 0.0% Final Planning 4 493 10.0% 0 0 0.0% 0 0 0.0% In Construction 0 0 0.0% 0 0 0.0% 0 0 0.0% TOTAL 4 493 10.0% 1 119 2.4% 0 0 0.0% Source: STR, CBRE Hotels' Americas Research, Q2 2017 Pleasanton / Livermore Performance - All Hotels All Hotels Penetration vs. Market Total YEAR OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR YEAR OCC ADR REVPAR 2012 72.5% - $96.90 - $70.28-2012 101.5% 97.6% 99.1% 2013 75.5% 4.1% $105.07 8.4% $79.33 12.9% 2013 102.3% 98.3% 100.6% 2014 75.6% 0.2% $116.67 11.0% $88.25 11.2% 2014 98.3% 99.9% 98.2% 2015 79.3% 4.9% $133.68 14.6% $106.03 20.1% 2015 99.9% 102.1% 102.0% 2016 78.3% -1.3% $146.60 9.7% $114.79 8.3% 2016 100.7% 103.0% 103.7% 2Q16 YTD 78.6% 1.2% $145.83 12.7% $114.62 14.0% 2Q16 YTD 101.1% 103.7% 104.9% 2Q17 YTD 74.4% -5.3% $152.45 4.5% $113.44-1.0% 2Q17 YTD 97.6% 107.2% 104.6% Pleasanton / Livermore Performance - Upper-Priced Hotels Source: STR, Q2 2017 YEAR OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Upper-Priced Penetration vs. Market Total 2012 74.5% - $113.79 - $84.75-105 2013 76.6% 2.8% $122.62 7.8% $93.90 10.8% 2014 2016 76.9% 80.2% 0.5% -1.2% $135.54 $168.61 10.5% 8.9% $104.26 $135.16 11.0% 7.6% 2015 2Q16 YTD 81.1% 79.9% 5.5% 1.6% $154.79 $169.89 14.2% 11.4% $125.60 $135.77 20.5% 13.2% 95 85 2Q17 YTD 75.7% -5.2% $177.77 4.6% $134.64-0.8% 2012 2013 2014 2015 2016 Pleasanton / Livermore Performance - Lower-Priced Hotels Market Occ ADR RevPAR YEAR OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Lower-Priced Penetration vs. Market Total 2012 69.9% - $72.68 - $50.81-110 2013 2015 74.1% 76.9% 6.0% 4.0% $80.63 $104.07 10.9% 15.4% $59.72 $80.02 17.5% 20.0% 2014 2016 73.9% 75.7% -0.2% -1.5% $90.20 $114.47 11.9% 10.0% $66.68 $86.71 11.7% 8.4% 105 100 2Q16 YTD 76.8% 0.5% $111.56 14.4% $85.69 15.0% 95 2Q17 YTD 72.6% -5.5% $116.41 4.3% $84.51-1.4% 2012 2013 2014 2015 2016 Source: STR, Q2 2017 Source: STR, Q2 2017 1 Out of 3 *Based on RevPAR change over the last 4 quarters. Submarket Penetration* *Submarket RevPAR penetration expressed as a percentage of the market RevPAR for the previous 4 quarters. Direction of arrow indicates if penetration is increasing or decreasing relative to one year ago's performance. P. 11 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Submarket Profile - Northeast / Concord Total Room Supply: 5,082 The Oakland NE / Concord submarket includes hotels in Concord, Walnut Creek, Richmond, Antioch, Pleasant Hill, Pittsburg, Martinez, Lafayette, Brentwood, and El Cerrito. Submarket Rank* Submarket Penetration* 2 89% Northeast / Concord Submarket Inventory UPPER-PRICED PROPERTIES ROOMS %SUBMKT LOWER-PRICED PROPERTIES ROOMS %SUBMKT Inventory 10 2,106 41.4% Inventory 47 2,976 58.6% UPPER-PRICED BRANDS BY SHARE PROPERTIES ROOMS %SUBMKT LOWER-PRICED BRANDS BY SHARE PROPERTIES ROOMS %SUBMKT Marriott 1 340 6.7% Motel 6 4 402 7.9% Hilton 1 329 6.5% Extended Stay America 2 223 4.4% Crowne Plaza 1 323 6.4% Clarion 1 198 3.9% Northeast / Concord Construction Pipeline Source: STR, Q2 2017 UPPER-PRICED LOWER-PRICED UNCLASSIFIED/INDEPENDENT PHASE PROPERTIES ROOMS %SUBMKT PROPERTIES ROOMS %SUBMKT PROPERTIES ROOMS %SUBMKT Unconfirmed 0 0 0.0% 0 0 0.0% 0 0 0.0% Planning 1 81 1.6% 2 271 5.3% 0 0 0.0% Final Planning 1 160 3.1% 1 84 1.7% 0 0 0.0% In Construction 1 115 2.3% 0 0 0.0% 0 0 0.0% TOTAL 3 356 7.0% 3 355 7.0% 0 0 0.0% Source: STR, CBRE Hotels' Americas Research, Q2 2017 Northeast / Concord Performance - All Hotels All Hotels Penetration vs. Market Total YEAR OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR YEAR OCC ADR REVPAR 2012 67.1% - $95.47 - $64.10-2012 94.0% 96.1% 90.3% 2013 69.8% 3.9% $99.00 3.7% $69.06 7.7% 2013 94.5% 92.6% 87.6% 2014 76.1% 9.1% $105.88 6.9% $80.61 16.7% 2014 98.9% 90.7% 89.7% 2015 79.9% 4.9% $116.58 10.1% $93.13 15.5% 2015 100.6% 89.1% 89.6% 2016 77.6% -2.9% $125.60 7.7% $97.41 4.6% 2016 99.8% 88.2% 88.0% 2Q16 YTD 77.0% -0.5% $123.70 10.1% $95.20 9.5% 2Q16 YTD 99.0% 88.0% 87.1% 2Q17 YTD 77.1% 0.1% $125.35 1.3% $96.58 1.4% 2Q17 YTD 101.1% 88.1% 89.1% Northeast / Concord Performance - Upper-Priced Hotels Source: STR, Q2 2017 YEAR OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Upper-Priced Penetration vs. Market Total 2012 72.0% - $122.82 - $88.44-105 2013 74.2% 3.1% $127.38 3.7% $94.55 6.9% 2014 2016 79.2% 78.2% 6.7% -3.8% $135.92 $160.19 6.7% 7.1% $107.69 $125.32 13.9% 3.0% 2015 2Q16 YTD 81.4% 76.8% 2.7% -3.0% $149.50 $158.65 10.0% 8.8% $121.62 $121.88 12.9% 5.5% 95 85 2Q17 YTD 77.9% 1.5% $159.80 0.7% $124.56 2.2% 2012 2013 2014 2015 2016 Northeast / Concord Performance - Lower-Priced Hotels Market Occ ADR RevPAR YEAR OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Lower-Priced Penetration vs. Market Total 2012 63.6% - $72.84 - $46.32-110 2013 2015 66.5% 78.8% 4.6% 6.7% $76.31 $92.18 4.8% 11.4% $50.78 $72.66 9.6% 18.8% 2014 2016 73.9% 77.1% 11.1% -2.2% $82.74 $100.37 8.4% 8.9% $61.15 $77.36 20.4% 6.5% 100 90 2Q16 YTD 77.1% 1.3% $98.65 12.9% $76.03 14.4% 80 2Q17 YTD 76.4% -0.8% $100.34 1.7% $76.67 0.9% 2012 2013 2014 2015 2016 Source: STR, Q2 2017 Source: STR, Q2 2017 Out of 3 *Based on RevPAR change over the last 4 quarters. *Submarket RevPAR penetration expressed as a percentage of the market RevPAR for the previous 4 quarters. Direction of arrow indicates if penetration is increasing or decreasing relative to one year ago's performance. P. 12 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Submarket Profile - Oakland / Berkeley / Hayward Total Room Supply: 9,864 The Oakland / Berkeley / Hayward submarket includes hotels in Oakland (primarily on MacArthur Boulevard and Hegenberger Road), hotels in Berkeley (mostly on University Avenue and near University of California Berkeley), and hotels in Hayward (mostly on A Street and Mission Boulevard). Submarket Rank* Submarket Penetration* 3 104% Oakland / Berkeley / Hayward Submarket Inventory UPPER-PRICED PROPERTIES ROOMS %SUBMKT LOWER-PRICED PROPERTIES ROOMS %SUBMKT Inventory 22 4,428 44.9% Inventory 85 5,436 55.1% UPPER-PRICED BRANDS BY SHARE PROPERTIES ROOMS %SUBMKT LOWER-PRICED BRANDS BY SHARE PROPERTIES ROOMS %SUBMKT Courtyard 3 615 6.2% Motel 6 3 560 5.7% Marriott 1 500 5.1% La Quinta Inns & Suites 3 407 4.1% Hilton Garden Inn 2 397 4.0% Extended Stay America 3 358 3.6% Oakland / Berkeley / Hayward Construction Pipeline Source: STR, Q2 2017 UPPER-PRICED LOWER-PRICED UNCLASSIFIED/INDEPENDENT PHASE PROPERTIES ROOMS %SUBMKT PROPERTIES ROOMS %SUBMKT PROPERTIES ROOMS %SUBMKT Unconfirmed 1 93 0.9% 0 0 0.0% 0 0 0.0% Planning 3 805 8.2% 7 992 10.1% 0 0 0.0% Final Planning 2 237 2.4% 3 291 3.0% 0 0 0.0% In Construction 0 0 0.0% 0 0 0.0% 0 0 0.0% TOTAL 6 1,135 11.5% 10 1,283 13.0% 0 0 0.0% Source: STR, CBRE Hotels' Americas Research, Q2 2017 Oakland / Berkeley / Hayward Performance - All Hotels All Hotels Penetration vs. Market Total YEAR OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR YEAR OCC ADR REVPAR 2012 73.2% - $102.39 - $74.98-2012 102.5% 103.1% 105.7% 2013 75.1% 2.6% $111.78 9.2% $83.98 12.0% 2013 101.8% 104.6% 106.5% 2014 78.2% 4.1% $122.50 9.6% $95.79 14.1% 2014 101.6% 104.9% 106.6% 2015 79.2% 1.3% $137.34 12.1% $108.76 13.5% 2015 99.8% 104.9% 104.7% 2016 77.6% -2.0% $149.10 8.6% $115.64 6.3% 2016 99.8% 104.7% 104.5% 2Q16 YTD 77.7% -2.1% $146.82 13.4% $114.07 11.0% 2Q16 YTD 100.0% 104.4% 104.4% 2Q17 YTD 76.7% -1.3% $146.05-0.5% $111.99-1.8% 2Q17 YTD 100.6% 102.7% 103.3% Oakland / Berkeley / Hayward Performance - Upper-Priced Hotels Source: STR, Q2 2017 YEAR OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Upper-Priced Penetration vs. Market Total 2012 77.4% - $134.12 - $103.78-115 2013 78.7% 1.7% $146.84 9.5% $115.55 11.3% 2014 2016 80.8% 81.0% 2.7% 0.1% $160.86 $191.96 9.5% 7.9% $130.02 $155.46 12.5% 8.1% 2015 2Q16 YTD 80.9% 81.3% 0.1% 0.4% $177.84 $190.79 10.6% 12.4% $143.82 $155.07 10.6% 12.9% 105 95 2Q17 YTD 80.8% -0.6% $186.06-2.5% $150.30-3.1% 2012 2013 2014 2015 2016 Oakland / Berkeley / Hayward Performance - Lower-Priced Hotels Market Occ ADR RevPAR YEAR OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Lower-Priced Penetration vs. Market Total 2012 70.1% - $76.37 - $53.57-110 2013 2015 72.5% 78.0% 3.4% 2.2% $83.89 $106.63 9.8% 14.9% $60.84 $83.12 13.6% 17.4% 2014 2016 76.3% 75.0% 5.2% -3.8% $92.79 $114.80 10.6% 7.7% $70.78 $86.13 16.3% 3.6% 105 100 2Q16 YTD 75.1% -4.1% $112.03 13.2% $84.10 8.6% 95 2Q17 YTD 73.3% -2.3% $110.14-1.7% $80.78-3.9% 2012 2013 2014 2015 2016 Source: STR, Q2 2017 Source: STR, Q2 2017 Out of 3 *Based on RevPAR change over the last 4 quarters. *Submarket RevPAR penetration expressed as a percentage of the market RevPAR for the previous 4 quarters. Direction of arrow indicates if penetration is increasing or decreasing relative to one year ago's performance. P. 13 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND MARKET SEGMENTS - REPRESENTATIVE BRANDS Upper-Priced Lower-Priced Fairmont Embassy Suites Courtyard by Marriott Best Western Plus Best Western Days Inn Four Seasons Hilton Crowne Plaza Comfort Inn Red Lion Econo Lodge Loews Hyatt Hyatt Place Hampton Inn La Quinta Extended Stay America Ritz Carlton Marriott Radisson Holiday Inn Mainstay Suites Red Roof W Hotels Westin Residence Inn TownePlace Suites Quality Inn Value Place EXHIBIT DEFINITIONS Exhibit 1 Exhibits 2-5 Exhibit 6 Exhibits 7-9 Exhibits 10-12 Exhibit 13 Occupancy levels, ADR change and RevPAR change are plotted on a fixed "grade" scale. Measured as current value minus the mean, divided by the series' standard deviation. Grades: A: Very strong, greater than one standard deviation above long run average. B: Strong, within one standard deviation above long run average C: Somewhat weak, within one standard deviation below long run average. D: Weak, below one standard deviation of the long run average. Year over year change in Income, Employment, RevPAR and Demand, displayed as annual (Exhibits 2 and 3) and quarterly (Exhibits 4 and 5). Average annual Employment, Consumer Price Index, Gross Domestic Product, and Real Personal Income change for the MSA. Index based change charts with base year 2012 = 100, illustrating the magnitude of change. Compound average annual RevPAR, Demand and Supply change for Upper Priced, Lower Priced, and combined (All) hotels within the MSA. Real RevPAR change (inflation adjusted, CPI) of the current period minus the historical mean of Real RevPAR change, divided by the historical standard deviation of Real RevPAR change. FINANCIAL BENCHMARKS The financial benchmarks come from the 2017 edition (2016 data) of Trends in the Hotel Industry, CBRE Hotels Americas Research s annual analysis of hotel financial statements from thousands of properties located across the nation. To benchmark the performance of hotels in the local market, we relied on national operating data from hotels of a similar profile to the average hotel in the subject market. The average room count, occupancy, and ADR of upper-priced hotels were used to analyze the performance of full-service hotels. The average room count, occupancy, and ADR of lower-priced hotels were used to analyze the performance of limited-service hotels. For a more in-depth report with a custom comparable set designed for your individual property or the subject market, see our CBRE Hotels Benchmarker SM service. (pip.cbrehotels.com) HOW WE FORECAST CBRE Hotels' Americas Research prepares hotel market forecasts based on accepted econometric procedures and sound judgment. The two-stage process for producing the forecasts firstly involves econometric estimation of future hotel market activity and financial performance based on historical relationships between economic and hotel market variables, and secondly, a judgmental review of modeled outputs by experienced hotel market analysts. CBRE Hotels and others believe that errors in forecasting are minimized by relying on both data analytics and judgment. ECONOMETRIC MODELS Econometric forecasting represents one of the most sophisticated approaches to gaining insight into future economic activity. Unlike some forecasting methods used in business practice, the models that underlie econometric forecasts contain variables based in economic theory. The forecasts come from historical relationships, similar to statistical correlations, among hotel market measures and economic variables. The measures for the variables come from actual market transactions involving individuals and firms interacting in the economy. Positive Features of Econometric Models: The variables included in the models follow from economic theory. The relationships between variables are estimated with advanced statistical methods. The forecasts developed with econometric models are objectively determined, unlike forecasts based only on judgmental approaches. P. 14 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND Gaining insight into the futures of complicated economic environments requires the introduction of multi-level forecasting models. Several equations often need to be identified and estimated to model complex economic conditions such as the national economy. Multi-equation models have considerable appeal for economic forecasting because they explicitly recognize the interdependence of relationships commonly encountered in markets. Perhaps the best example of this type of model is one that involves both the demand side and the supply side of markets, in which prices of goods are set by the interaction of buyers and sellers. Thus, price appears as a variable in both the demand and supply equations. THE EQUATIONS The Hotel Horizons econometric forecasting models fall into the category of multi-equation, demand and supply models. These models have the structure defined below, but vary in their construction for particular market applications (e.g., different cities and hotel market segments). The three estimated equations are: 1. Demand for hotel rooms is primarily driven by the general level of economic activity in the nation or city, as measured by income and employment. The equation recognizes the fundamental relationship between room purchasing behavior and either growth or decline in the relevant economy. Both economic theory and historical data relationships strongly support the inclusion of ADR in the demand equation because lower ADRs motivate increases in travel and leisure spending, while higher ADRs motivate decreases. 2. Supply change - In historical lodging data, a strong relationship exists between growth in the supply of new hotel rooms and priorperiod lodging market conditions. In the equation, new hotel room growth in modeled as a function of past levels of new room growth, past ADR, and past occupancy levels. 3. ADR movements are correlated with room scarcity in the market. The equation which estimates ADR defines ADR as a function of past room rates and contemporaneous occupancy levels. The parameters (i.e., coefficients on each variable) then are used to forecast demand, supply change, and RADR by multiplying the parameters by CBRE Econometric Advisors and Moody s Analytics forecasts of the economic variables and relevant previously estimated values (lagged variables). Three additional calculations are made with these results, as follows: 1. Supply change is added to the previous-period number of available rooms to produce an available rooms level in future periods. 2. Number of rooms sold is divided by number of available rooms to obtain occupancy percent in each future period. 3. Expected inflation is added to real ADR to convert to nominal ADR. JUDGMENTAL INTERVENTION A committee of hotel experts from CBRE Hotels' Americas Research performs a thorough review of each model prediction. These assessments are made by locally-based hotel experts working in the various offices around the U.S. The quarterly forecasts for the current and forecast period years are subject to review. The committee modifies the model s market prediction when there is compelling evidence that factors have come into play that the model could not possibly foresee. A Super Bowl-type event, as an extreme example, would cause the committee s forecast to differ noticeably from the model's prediction not only in the city in which the event will occur, but also competing cities within the region. In most instances, however, the committee either defers to the model prediction or makes modest adjustments. Economic Data from July, 2017 Hotel Data from June 2017 P. 15 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND What Has Changed Since The Last Report? Forecasts are valuable tools for developing expectations of key variables. Changes to forecasts occur for two primary reasons. The first is adjustments to historical series made by the data provider, causing future periods to vary due to changes in their base. The second is that economic expectations tend to shift as more information becomes available, thus moving the hotel variables according to their underlying relationships. We are constantly re-evaluating the performance of our forecasts, and presented below is a view on how the world has changed since the June - August 2017 issue, presented in same period, prior year change format. All data under "This Report" are actual through 2nd Quarter 2017. Data marked as "Last Report" are actual through 1st Quarter 2017, with 2nd Quarter 2017 being the first forecast period for that report. As noted on earlier pages, all of the hotel variables below are modeled using data from Moody's Analytics. It is important to note that all historical data are subject to revision. At the beginning of each year, STR, our source for historical lodging data, repositions the chain-scale classifications for branded properties, and chain-class categories for independent hotels. The reclassifications are based on the ADR achieved the prior year. Because of these reclassifications, the historical data presented in this report may differ from the historical data presented in prior Hotel Horizons reports. Further, the reclassifications may have influenced our forecasts of future performance. 2017 2017 2017 2018 2019 1st Qtr 2nd Qtr 3rd Qtr F 4th Qtr F Year End Year End Year End CHANGE IN REAL PERSONAL INCOME* This Report 3.4% 3.3% 2.9% 2.8% 3.1% 2.1% 2.8% Last Report 2.7% 2.2% 2.5% 3.0% 2.6% 2.2% 2.8% CHANGE IN TOTAL PAYROLL EMPLOYMENT* This Report 2.4% 2.0% 1.6% 1.0% 1.8% 1.0% 0.1% Last Report 2.7% 2.5% 2.0% 1.6% 2.2% 1.1% 0.0% CHANGE IN SUPPLY** This Report 2.8% 2.9% 3.3% 2.6% 2.9% 0.6% 0.7% Last Report 2.8% 3.5% 4.0% 3.7% 3.5% 1.8% 1.2% CHANGE IN DEMAND** This Report -0.2% 1.9% 0.6% -0.9% 0.4% -1.0% 0.1% Last Report -0.2% 0.5% 1.9% 1.6% 1.0% -0.1% 0.0% CHANGE IN OCCUPANCY** This Report -2.9% -1.0% -2.6% -3.4% -2.4% -1.6% -0.6% Last Report -3.0% -2.9% -2.0% -2.0% -2.5% -1.9% -1.2% CHANGE IN ADR** This Report 1.8% 0.6% -0.2% 4.7% 1.6% 2.3% 1.7% Last Report 1.8% 1.9% 1.6% 6.4% 2.9% 2.6% 2.5% CHANGE IN REVPAR** This Report -1.2% -0.4% -2.7% 1.1% -0.9% 0.6% 1.2% Last Report -1.2% -1.0% -0.4% 4.3% 0.4% 0.7% 1.3% * Economic data (history and forecast) are from CBRE EA, Q2 2017 ** Hotel performance data: History supplied by STR; Forecast developed by CBRE Hotels' Americas Research, Q2 2017 2017 and 2018 Year End Forecast Change in RevPAR 2017 2018 0.6% 0.4% 0.7% -0.9% Source: CBRE Hotels' Americas Research, Q2 2017 This Report Last Report P. 16 / CBRE HOTELS' AMERICAS RESEARCH
HOTEL HORIZONS SEPTEMBER - NOVEMBER 2017 EDITION OAKLAND GLOSSARY OF TERMS ADR Occupancy RevPAR Supply Demand LRA Penetration Standard Deviation Average Daily Rate - rooms revenue divided by paid rooms occupied. Paid rooms occupied divided by available rooms. Revenue per Available Room - rooms revenue divided by available rooms. Average daily room nights available per quarter, represented as a change over previous year, same quarter except where noted annually. (Accommodated Demand) Average daily room nights occupied per quarter, represented as a change over previous year, same quarter except where noted annually. Long Run Average - Annual average from 1988 to last complete year end. Market area (or sub-market area) measurement as a percent of national (or market area) measurement. The plotting of a normal data series and how far each individual data point lies from the mean: 68.2% of the series will fall within 1 standard deviation, 95.4% of all data points will fall within 2 standard deviations, and 99.7% falling within 3 standard deviations of the mean. For more information about this market please contact: Chris Kraus at chris.kraus@cbre.com CBRE HOTELS CBRE HOTELS Dallas New York LEADERSHIP CONSULTING Jeff Binford Mark VanStekelenburg jeff.binford@cbre.com mark.vanstekelenburg@cbre.com Kevin Mallory National Practice Leader CBRE Hotels' Global Head Tom Huffsmith Houston Philadelphia kevin.mallory@cbre.com Senior Managing Director Randy McCaslin Tony Biddle tom.huffsmith@cbre.com randy.mccaslin@cbre.com anthony.biddle@cbre.com CBRE HOTELS Daniel C. Hanrahan II AMERICAS RESEARCH Atlanta Indianapolis daniel.hanrahan@cbre.com Scott Smith Mark Eble Mark Woodworth scott.smith@cbre.com mark.eble@cbre.com San Francisco Senior Managing Director Jill Bidwell Chris Kraus mark.woodworth@cbre.com jill.bidwell@cbre.com Jacksonville chris.kraus@cbre.com Hank Staley Jack Corgel Bozeman hank.staley@cbre.com Seattle Managing Director Chris Kraus Chris Kraus jack.corgel@cbre.com chris.kraus@cbre.com Los Angeles chris.kraus@cbre.com Bruce Baltin Jamie Lane Chicago bruce.baltin@cbre.com Washington, D.C. Senior Economist Mark Eble Jeff Lugosi Kannan Sankaran jamie.lane@cbre.com mark.eble@cbre.com jeff.lugosi@cbre.com kannan.sankaran@cbre.com For more reports visit our store at https://pip.cbrehotels.com/ Hotel Horizons is compiled and produced by CBRE Hotels Americas Research. Readers are advised that CBRE Hotels Americas Research do not represent the data herein to be definitive, neither should the contents be construed as a recommendation on policies or actions. Quotation, reproduction or transmittal (in any form or by any means, whether electronic, photocopying, recording or otherwise) is not permitted without consent from CBRE Hotels Americas Research. Please address inquiries to Hotel Horizons, 3280 Peachtree Road NE, Suite 1400, Atlanta, GA 30305. Phone: (855) 223-1200. Copyright 2017 CBRE Hotels Americas Research. All rights reserved.
TRI VALLEY, CALIFORNIA TRAVEL IMPACTS, 2012-2016P JUNE 2017 Prepared for Visit Tri-Valley 5075 Hopyard Road, Suite #240 Pleasanton CA 94588 Dean Runyan Associates 833 S.W. Eleventh Avenue, Suite 920 Portland, Oregon 97205 503.226.2973
Introduction Travel and tourism are an important component of the economy in the Tri Valley Region of Alameda and Contra Costa Counties in California. This region is defined as the communities of Dublin, Livermore and Pleasanton in Alameda County and Danville in Contra Costa County. The attractive landscape, pleasant weather, established visitor services and attractive features such as gourmet wine and food bring both overnight and day visitors to the area. This research describes the economic benefits of these visitors, with primary findings covering the period 2012 through 2016. Findings include travel-generated sales, employment and payroll that these sales support, and the associated state and local tax receipts. In addition there are estimates of overnight visitor volume and the associated average spending. Methodology Overview The figures for Tri Valley are prepared from research for Alameda and Contra Costa Counties that is prepared for Visit California, augmented with the most recent data available for the Tri Valley Region. Figures representing 2016 are preliminary in that certain data involved in the analysis are not available in final form until after this report is prepared; for analysis purposes these are estimated on the basis of previous year data and trends. Overall findings typically vary little when final data are available. Region Definition and Population The Tri Valley Region consists largely of four communities, Livermore, Pleasanton and Dublin in Alameda County and Danville in Contra Costa County. The Tri Valley area represents about 13% of Alameda County and somewhat under 7% of Contra Costa County. The dominant portions of these counties abut San Francisco Bay and are very oriented to the economic activity of the East and South Bay region. Population, Alameda and Contra Costa Counties and Tri Valley Portions Population 2015 Alameda County Contra Costa County Location Number Percent Number Percent Tri Valley 217,145 13.3% 75,591 6.7% Remainder 1,421,070 86.7% 1,047,640 93.3% Total County 1,638,215 100.0% 1,123,231 100.0% Source: US Census 1
Commercial Lodging Commercial lodging is somewhat more concentrated in the Tri Valley area than is population, as appears in the table below. About 16% of commercial lodging units of the two counties are located in the Tri Valley Region. Commercial Lodging Inventory, Alameda and Contra Costa Counties, Tri Valley Region Lodging Sales Commercial Lodging Units Alameda County Contra Costa County Total Location Number Percent Number Percent Number Percent Tri Valley 3,683 21.2% 62 1.0% 3,745 15.7% Remainder 13,677 78.8% 6,435 99.0% 20,112 84.3% Total County 17,360 100.0% 6,497 100.0% 23,857 100.0% Source: STR, Dean Runyan Associates Lodging sales in the Region have grown substantially since 2012 but are concentrated in the Tri Valley Region in a manner very similar to lodging units, with the Region representing somewhat under 16% of all sales in the two-county area. Lodging Sales, Alameda and Contra Costa Counties, Tri Valley Region Annual Sales ($M) Location 2012 2013 2014 2015 2016 Alameda County 367.9 423.4 483.6 567.0 647.6 Tri Valley Portion 76.5 86.8 95.3 112.3 129.1 Percent 20.8% 20.5% 19.7% 19.8% 19.9% Contra Costa County 118.3 132.2 152.6 169.9 188.0 Tri Valley Portion 1.5 1.7 1.9 1.9 2.3 Percent 1.3% 1.3% 1.2% 1.1% 1.2% Total Region 486.2 555.6 636.1 736.9 835.6 Tri Valley portion 78.0 88.5 97.2 114.1 131.4 Percent 16.0% 15.9% 15.3% 15.5% 15.7% Source: STR, Dean Runyan Associates 2
Camping Campground capacity in Alameda County is concentrated in the Tri Valley Region, while most Contra Costa County camping is outside the area. Travel Spending Campground Units, Alameda and Contra Costa Counties, Tri Valley Region Campground Units Alameda County Contra Costa County Location Number Percent Number Percent Tri Valley 268 70.0% 60 18.8% Remainder 115 30.0% 260 81.3% Total County 383 100.0% 320 100.0% Source : Woodalls, Dean Runyan Associates Tri Valley travel spending has increased steadily since 2012, rising from $557 million to $646 million, an annual average increase of approximately 3.8%. Most of this growth is attributable to visitors staying in commercial lodging. Tri Valley Travel Spending, 2012 2016p Travel Spending ($M) Category 2012 2013 2014 2015 2016p Commercial lodging 312 328 335 364 386 Private home 100 101 103 105 106 Campground 5 11 17 16 17 Vacation home 4 4 4 4 4 Day 136 135 131 132 133 Total 557 579 589 621 646 Source: Dean Runyan Associates 3
Travel Spending by Type of Visitor Accommodation, 2016p Commodities Purchased Travelers to the Tri Valley Region spent the most on food service and accommodations, with substantial spending on retail as well. Purchases of visitor air transportation relate to the location of the Oakland International Airport in Alameda County. Visitor Spending by Commodity Category, 2016p Employment and Earnings Total 2016 earnings in the Tri Valley Region that are attributable to visitor spending totaled $281 million, with the largest portion ($132 million) in accommodations and food service 4
businesses. The Other Travel category includes earnings for such things as air transportation, travel arrangement and visitor industry services for meetings and visitor bureaus. Earnings, Tri Valley Region, 2016p Visitor spending supports a total of 5,900 jobs in the travel industry and related businesses. Jobs in the Tri Valley Region, by Business Category, 2016p Tax Receipts Local 2016p tax receipts, consisting of lodging tax, plus sales, TID and property taxes, amounted to $32.8 million. State taxes were $34.2 million, totaling $67 million. 5
Visitor Volume and Average Expenditures Visitor volume for the Tri Valley Region rose from 1.55 million visitors (person trips) in 2014 to 1.6 million in 2016. A substantial portion of visitors stayed with friends or relatives. Average expenditures Tri Valley Visitor Volume, 2014 2016p Person Trips (000) Party Trips (000) Lodging Category 2014 2015 2016p 2014 2015 2016p Commercial lodging 559 571 578 254 260 265 Private home 839 848 853 400 404 408 Other 160 162 164 64 65 65 Total 1,558 1,581 1,595 717 729 738 Source: Dean Runyan Associates Note: "Other" consists of camping and vacation home categories. Overall expenditures for overnight visitors averaged $95 per person per day, and $198 per party per day. Those staying in commercial lodging spent substantially more, $238 per person per day and $498 per party per day. Notes Regarding Methodology Average Daily Spending, 2016p Daily Spending per Lodging Category Person Party Commercial lodging $238 $498 Private home $37 $76 Camping $65 $196 Vacation Home $85 $183 All Overnight $95 $198 Source: Dean Runyan Associates The estimates in this report are expressed in current dollars. There is no adjustment for inflation. The economic impact measurements represent only direct economic impacts. Direct economic impacts include only the spending by travelers and the employment generated by that 6
spending. Secondary effects related to the additional spending of businesses and employees are not included. The employment estimates in this report are estimates of the total number of full and part-time jobs directly generated by travel spending, rather than the number of individuals employed. Payroll and self-employment are included in these estimates. 7
Visit Tri-Valley REGIONAL TOURISM ASSET ASSESSMENT Prepared for: Visit Tri-Valley 5075 Hopyard Rd, Suite 240 Pleasanton, CA 94588 Solutions for your competitive world.
Visit Tri-Valley Table of Contents Executive Summary 3 Part 1: Understanding Tourism Assets 7 Part 2: Existing Regional Assets 13 Part 3: Pipeline Projects 21 Part 4: Tri-Valley Tourism Asset Gaps 23 Part 5: Developing a Tourism Asset Strategy 44 Part 6: Summary Comments 45 Appendix 46 Appendix 1: Completed interviews 47 Appendix 2: Sources 48 Appendix 3: Project Overview 49 Appendix 4: Scope of Work 50 2 P a g e
Visit Tri-Valley Executive Summary The following report was developed in an effort to improve Tri-Valley s long term competitive position in the Northern California tourism market> the report sought to identify current tourism related destination assets as more importantly potential tourism asset gaps. The report also seeks to define a tourism strategy that can improve the competitive position of Tri Valley over the long term. The report identifies several key challenges including the lack of perception the region has as a destination and that it is seen by some to be a series of communities. Additionally, the areas have significant differences between them. For example, Livermore, with its downtown area and wineries, is a very different experience to San Ramon, which generates a significant level of corporate travel. Moving forward Tri-Valley needs to consider three specific steps with regard to its assets. 1. Continue to build its brand assets in order to create value for all of the areas within the region. 2. Continue to promote all of the area s assets and experiences. 3. Add both tangible and intangible assets over the long and short term. The report identifies a number of assets needs both tangible and intangible. Tangible Asset Needs 1. Develop a Broader Lodging Supply Mix One of the most frequently mentioned needs expressed by those interviewed was the need for a broader lodging supply mix to attract different visitor segments 2. Develop Additional Meeting and Convention Space The ability to attract more business travel for meetings and conferences is impacted by the lack of a significant meeting and convention facility capable of handling larger groups for corporate, association or industry gatherings as well as limited availability mid-week lodging supply given the current occupancy rates. Tri-Valley s lack of a confined city space is also a disadvantage. 3. Leverage Existing Performing Arts and Cultural Venues The desire to upwardly impact leisure visitation in the Tri-Valley region must focus on demand generators that draw visitors based upon some affinity. An additional demand generator that can be looked to is performing arts and cultural events. 3 P a g e
Visit Tri-Valley 4. Additional Recreation Facilities Stakeholder interviews identified the need for additional indoor and outdoor sports facilities that would both provide benefits for local residents as well as serve as a tourism trip generator to the region 5. Infrastructure Related Opportunities Transportation system(s) A number of stakeholder interviews identified transit as a significant concern, one that has a negative impact on the potential for tourism. San Ramon City Center One of the biggest potential opportunities within the region is the development of the San Ramon City Center. Signage & Wayfinding One area of need that was expressed by a number of stakeholders was the need for signage and wayfinding. 6. Cultural Assets Several interviews identified the need for additional cultural assets including museums, theaters and performing arts venues Intangible Assets Needs 1. Data and Information One of the key intangible asset needs is comprehensive tourism economic and market research. 2. Soft Tourism Infrastructure Another important intangible asset that needs to be added to Tri-Valley area is that of region wide organizations that can be a part of the tourism infrastructure. Below are the types of organizations that can be of assistance in growing tourism. Tri-Valley Regional Arts Committee A regional arts committee could provide significant support by developing programming that can be presented in a regional context. Tri- Valley Region Lodging Association A unified lodging industry association that meets periodically to discuss trends, market opportunities and market challenges while working with Visit Tri-Valley can be an important part of assisting the organization in being as effective as possible. 4 P a g e
Visit Tri-Valley Performing Arts Facility Association An organization that includes each of the performing arts facilities could provide an integrated calendar that could be presented region-wide and also provide a cohesive approach to entertainment within the region. Sports Commission- This organization would unify regional sports facilities in an effort to attract tournaments, swim meets track meets etc. in an effort to generate weekend occupancy. 3. Marketing Related Assets Within the conversation on tourism assets, a number of marketing related issues were identified. They include the following: Visitor information One of the opportunities to present a consolidated regional experience is to provide an integrated approach to branded visitor information. More funding for marketing Currently Visit Tri-Valley is funded by a Tourism Business Improvement District (TBID) which has become a funding mechanism for over seventy destinations throughout California. It will be important for Visit Tri-Valley s long term competitive position to also increase its available funding. Additional marketing/brand development Several stakeholders identified the need to increase the awareness and presence of the Tri-Valley brand. More diversified marketing In an effort to broaden the attraction of the Tri-Valley region to leisure visitors it s important to broaden the awareness of all of the activities available. Action step(s): 4. Process Related Assets A final area of interest expressed by stakeholders was related to the process of how things get done within Tri-Valley. Specifically it was suggested that Tri-Valley create a more collaborative mindset and improve the connectivity of the region. Developing a Tourism Asset Strategy In considering a long term tourism asset strategy one of the benefits the region has is an incredibly strong business travel segment which provides very strong mid-week occupancy for the flag properties. It is anticipated this trend will continue for the following reasons: Continued growth of the greater Bay Area economy specifically the South Bay tech industry. Favorable commercial real estate prices compared with Silicon Valley should continue to fuel commercial real estate demand The proposed San Ramon City Center. 5 P a g e
Visit Tri-Valley Given these strategic changes in the marketplace it is clear that the Tri-Valley region will continue to have a strong business travel segment. This anticipated strong business travel segment presents a unique opportunity for Tri-Valley to strengthen the overall tourism economy by strategically supporting assets that will also grow the leisure side of the market. This Business Travel Plus strategy provides the region a unique opportunity to grow overall tourism. 6 P a g e
Visit Tri-Valley Part 1: Understanding Tourism Assets Tourism assets can be defined in the following way: Any county, city, town or region that has a feature that attracts people and resulting travel spending that contributes to revenues, employment and taxes for that location. When considering tourism in general and Tri-Valley specifically, it is important to understand the elements that comprise the tourism experience. These elements/assets are outlined by McIntosh, Goeldner and Ritchie 1, and include the following: Tourism Element Characteristics 1. Natural Resources Natural assets unique to the region. 2. Infrastructure Air access, roads, utilities, etc. All elements that help support the visitor s experience. 3. Hospitality Human elements that interact and serve the visitor. 4. Visitor Services Hotels, food & beverage and retail services designed to assist the tourist. 5. Attractions Natural and built facilities, events and local residents that provide visitors with experiences. 6. Local Culture Culture is what makes the destination unique and real and provides memorable experience to visitors. 7. Organizational Organization and processes that work to attract visitors to the destination using a variety of promotional techniques. It is clear that while Tri-Valley offers a number of resources including attractions, local culture, organizational hospitality, and some infrastructure, the lack of a major natural asset (e.g. mountains, lakes, oceans), or significant natural resources and attractions, the remaining 1 McIntosh, Goeldner and Ritchie Tourism: Principles, Practices and Philosophies and the Strategic Marketing Group 7 P a g e
Visit Tri-Valley elements including infrastructure, hospitality, and visitor services are mixed. The area is very weak on organizational efforts and funding designed to attract visitors. In addition to the above tourism elements, it is important to recognize that these elements in and of themselves are not enough. In order to truly maximize the area s efforts, the following support is needed: A market-focused and market-driven strategy Too often organizations and regions can lose focus on marketing efforts and become concerned with political matters. A market-driven strategy can help refocus efforts. Funding In order to realize its stated goals, an organization needs to allocate the necessary funds to achieve the identified goals. Cooperation It is critical for all elements and areas of the county to work together to achieve mutual marketing objectives. Vision The tourism industry and its stakeholders need to provide a vision for the greater community. Community Benefits If all of these components work in unison, and are supplemented with the necessary resources and funding, the local community should benefit in a number of areas, including those illustrated below. Enhanced quality of life Recognition of the importance of protecting natural elements adds to visitor satisfaction as well as the local quality of life. Improved infrastructure and local services Tourism generated tax dollars can play an important role in municipal and county funding for local services. Jobs and business improvement Tourism often adds to the revenues that, in turn, increase employment and strengthen local business. Enhanced image and economic development value will help to attract and retain business entities. 8 P a g e
Visit Tri-Valley Positive Return on Investment (ROI) The combined benefits derived from a multi county-wide (Contra Costa and Alameda) tourism promotion effort can provide a positive ROI over the long-term for the entire community. Community Pride Pride in the community leads to reinvestment/further buy-in from the community. It is important to understand the overall regional demand drivers, namely those assets which actually drive consumer demand and visitation to the area. These demand generators include favorable climate; the wine and dining experience; special events that attract visitors and appeal to their interests; and specific niche activities that visitors engage in, ranging from golf to hiking, arts shopping and biking etc. It should also be noted that demand for the destination (specifically in the case Livermore) is also generated by two National Labs with corporate travel to the area s local governments and businesses. Business travel (specifically in San Ramon and Pleasanton) is another additional reason why people travel to Tri-Valley. In addition to the Livermore Labs, the area is home to a number of major corporations that generate travel to the area. Figure 1 Tri Valley Regional Tourism Demand Driver Assets Wine/Dining Shopping Downtowns Tri-Valley Recreation Special Events Corporate Travel Government/ Livermore Laboratory 9 P a g e
Visit Tri-Valley Tri Valley Major Asset Demand Driver Summary: Corporate Wine/Dining Livermore/Pleasanton wineries Dining areas that complement wine Downtowns Livermore Pleasanton Danville San Ramon (future) Dublin (future) Government Livermore & Sandia Laboratory Local government Corporate/Business National and regional business Recreation Mt. Diablo Del Valle Regional Park Carnegie Off Highway Vehicle Park East Bay Regional Trail System Shadow Cliffs Regional Recreation area Municipal recreation facilities Special Events Social events (weddings, reunions, etc.) Cultural events Sports events Affinity Events Shopping Premium outlets and downtowns Stoneridge Shopping Center Hacienda Crossing Historic National Historic Site Leisure Focus Notes Primarily leisure focus with some crossover to business travel (ex: dining, catering) Focus Despite these assets, the region has challenges as outlined below. Primarily focused on leisure travel shopping and dining. Corporate and government travel focused on servicing Livermore & Sandia Labs and local government. National and regional businesses primarily generate corporate business. Recreation assets primarily generate leisure business. Events generate leisure travel Eugene O Neill Home (i) (ii) The lack of perception the region is a destination and is seen by some to be a series of communities. There is a perception that the communities that comprise the Tri-Valley are spatially far apart despite only spanning twenty miles from one side to the other. There are also some challenges given that some areas have significant differences between them. For example, Livermore, with its downtown area and wineries, is a very different experience to San Ramon, which generates a significant level of corporate travel. 10 P a g e
Visit Tri-Valley This diversity is not unique among tourism destinations within California. There a number of areas that are very diverse in their offerings, and in fact are much more spread out than the Tri-Valley area. Case Study: Monterey Located on the central coast, Monterey is an excellent example of a destination that offers diversity in a number of areas: Coastal vs. inland The Monterey area includes both the coastal areas of Carmel, Pacific Grove and Monterey as well as inland areas such as Salinas. Tourism vs. other economic sectors Monterey boasts a variety of economic sectors beyond tourism, including agriculture, higher education and military. Monterey is also separated by distances specifically between inland and coastal areas. Case Study: Mendocino Like Monterey, Mendocino County, located on the North Coast, also offers a variety of diversity: Coastal vs. inland The Mendocino area includes both the coastal areas of Mendocino and Fort Bragg but also inland areas such as Hopland, Ukiah and Willets. Tourism vs. other economic sectors Mendocino also has a variety of economic sectors beyond tourism, including agriculture, logging and fishing. Mendocino is also separated by significant distances between inland and coastal areas as well as the north and south parts of the county. Case Study: Sonoma County Like the other two examples Sonoma County, located north of San Francisco, has a similar diversity. Coastal vs. inland Sonoma County includes both the coastal areas of Bodega Bay and Jenner, but also inland areas such as Santa Rosa, Healdsburg and Sonoma. Tourism vs. other economic sectors Sonoma County is home to a variety of economic sectors beyond tourism including agriculture, technology, higher education and light manufacturing. Urban vs. rural Sonoma County also has highly urbanized areas like Santa Rosa, located on a major highway access (CA 101), as well as extremely rural areas like Jenner, located on Highway 1. Sonoma is also separated by significant distances between inland and coastal areas as well as the north and south parts of the county. There are several key factors for success that each of these areas exhibit. (i) Each area is organized around a common brand that promotes the entire region. (ii) Each area has significant funding all or in part generated by their Tourism Business Improvement District. 11 P a g e
Visit Tri-Valley (iii) Each area continually promotes all the available tourism assets within the region. Moving forward Tri-Valley needs to consider three specific steps with regard to its assets. Add both tangible and intangible assets over the long and short term. Continue to build its brand assets in order to create value for all of the areas within the region. Continue to promote all of the area s assets and experiences. Tri-Valley Region Destination Level Strategy Continue to add tangible and nontangible assets Promote all assets and the experience they provide Build the Tri- Valley Brand 12 P a g e
Visit Tri-Valley Part 2: Existing Regional Assets Overview The Tri-Valley is comprised of the town of Danville, the cities of Dublin, Livermore, Pleasanton, and San Ramon, along with three valleys (Amador, Livermore and San Ramon). The region is located 33 miles east of San Francisco and 27 miles north of San Jose. The region offers a variety of recreation and cultural assets, and is home to a number of business and economic sectors. It has excellent road and air access and is also served by the Bay area Rapid Transit (BART) system. The Tri-Valley has transformed itself from its agricultural beginnings into an urban region that both serves as a bedroom community to the greater Bay Area as well as its own business and economic base. Below is a summary of each of the areas. Town of Danville Danville is known for its small-town atmosphere and quality of life. Visitors can enjoy the tree-lined streets of Danville s historic downtown and explore the area s nature trails by bike or on foot. Nearby Mt. Diablo State Park is one of the region s biggest natural attractions, with a 3,849-foot peak that offers views of the greater San Francisco Bay Area. Population: 43,088 2 Dublin This city is the gateway to the Tri-Valley region and is the region s most accessible city. Located at the I-580/I-680 interchange, Dublin is home to two Bay Area Rapid Transit (BART) stations. The city is undergoing a shopping and dining renewal, with new national and regional stores, as well as neighborhood plazas with specialty shops and restaurants. Dublin also had a variety of trails including the Schaffer Ranch Ridgeline, shopping at Hacienda Crossings and hosts the newest East Bay Regional Park, Dublin Hills Regional Park. Population: 53,462 3 Livermore Livermore is home to California's oldest wine region, boasting more than 50 wineries. The valley's western heritage is mirrored in the city's vast farmlands and awardwinning wineries. Livermore also has a revitalized downtown offering shopping, dining, and entertainment. In addition, Livermore is also home to renowned science and technology center, Lawrence Livermore National Laboratory. Population: 83,547 4 2 U.S. Census Bureau, July 2014 3 Ibid 13 P a g e
Visit Tri-Valley Pleasanton Pleasanton also one of the areas gateway s to the Tri-Valley region and one of the area s most accessible city s offers a variety of downtown festivals, street parties, parades, weekly summer concerts, and farmers markets. Its historic downtown area features excellent outdoor dining, boutiques, and art galleries. The Alameda County Fairgrounds are located near the downtown, and are home to the award-winning Alameda County Fair as well as other events throughout the year. In addition, Pleasanton offers miles of hiking, biking, and walking trails to explore among the ridgelines overlooking the region s three valleys. Golf and wine tasting among its recreational opportunities. Pleasanton also has a Bay Area Rapid Transit (BART) station. Population: 72,338 5 San Ramon San Ramon is located in the rolling hills of the San Ramon valley. In addition to its appealing climate, scenery and suburban charm, San Ramon is home to multiple golf courses, a performing arts center, a farmers market, and it s Central Park, home to many outdoor events. Population: 73,927 6 Tri-Valley Tourism Asset Inventory The following tourism asset inventory was developed to get a baseline understanding of currently available tourism related assets within the Tri-Valley region. The tourism asset inventory focused on the following areas: Available lodging Meeting facilities Attractions /activities Outdoor recreation Transportation access Arts & culture Downtown areas Shopping and dining In addition to these current assets, the region is also served by major corporate and governmental institutions that generate trip visitation. Business travel is key to specific areas of the Tri-Valley region, most notably San Ramon and Pleasanton as well as other areas within the region. 4 Ibid 5 U.S. Census Bureau, July 2012 6 Ibid 14 P a g e
Visit Tri-Valley Lodging The Tri-Valley includes 36 lodging properties and 4,648 rooms with the highest concentration located in Livermore, Pleasanton and San Ramon. Table 1A. Lodging (Number of Properties) Danville Dublin Livermore Pleasanton San Ramon Hotel 1 3 9 10 6 Inn/Suites 0 1 6 1 0 Motel 0 0 1 1 0 TOTAL 1 4 16 13 6 Table 1B. Lodging (Number of Rooms) Danville Dublin Livermore Pleasanton San Ramon Hotel 62 471 803 1310 1027 Inn/Suites 0 0 253 191 0 Motel 0 0 102 76 0 TOTAL 62 562 1275 1778 1027 In terms of lodging types, hotel units represent 3,673 of total units, fully 86% of all available lodging units. As can be seen above, Pleasanton, San Ramon and Livermore account for approximately 85% of lodging units in the Tri-Valley area. Lodging properties tend to be flag properties that bring global distribution systems, frequent user reward programs and other customer loyalty elements. One of the most frequently mentioned tourism needs is a resort property as well as smaller bed and breakfast and inn lodging products. Meeting Facilities There are 75 meeting facilities within the region, with 21 of these facilities located in hotels. It should be noted that a number of these facilities may be just a meeting room with no real accommodations for corporate meetings and groups. Hotel meeting rooms can typically accommodate 30-60 attendees. Table 2A. Meeting Facilities (Number of Facilities) Danville Dublin Livermore Pleasanton San Ramon Hotel Meeting Facilities 0 3 12 8 4 Other Meeting Facilities 7 4 24 12 7 TOTAL 7 7 31 19 11 15 P a g e
Visit Tri-Valley Table 2B. Meeting Facilities (Maximum Occupancy) Danville Dublin Livermore Pleasanton San Ramon Hotel Meeting Facilities 0 1,077 1,355 4,348 2,595 Other Meeting Facilities 3,497 2,146 16,172 1983 5,398 TOTAL 3,497 3,223 17,527 6,331 7,993 Table 2C. Meeting Facilities (Square Footage) Hotel Meeting Facilities Convention Centers Danville Dublin Livermore Pleasanton San Ramon 0 16,200 22,013 28,637 18,470 The Tri-Valley area lacks a traditional convention center. The largest event center is the San Ramon Valley Conference Center, with 25,000 square feet and a capacity of approximately 1,300. Attractions/Activities As can be seen below the primary attraction/activity within the region is the number of wineries that attract visitors from a wide region. Livermore hosts a significant portion of not only the region s wineries but attractions. One additional important asset is the Alameda County Fairgrounds which provides a facility for a number of events and activities. Table 3 - Attractions/Activities Danville Dublin Livermore Pleasanton San Ramon Agricultural Arcade/go carts/minigolf/indoor recreation Fairgrounds Interactive arts Museum Dog Parks Performing arts Tours Water parks Wilderness parks Winery/vineyard/tasting room 16 P a g e
Visit Tri-Valley Outdoor Recreation The Tri-Valley area includes a variety of outdoor recreation activities. Important from a tourism perspective are the 17 golf courses throughout the region as well as the hiking and biking opportunities. The region has a large number of municipal parks primarily used by local residents which may also be available for visitor tournaments and play. Table 4 - Outdoor Recreation Danville Dublin Livermore Pleasanton San Ramon Air sports Bocce Campgrounds Community centers Disc golf Fishing Golf Hiking Horseback riding/ equestrian centers Mountain biking trails Paintball Parks Road biking Skateboarding/BMX parks Swimming pools Tennis Watersports Note: additional golf courses include Blackhawk, Alamo and Sunol located in the unincorporated areas. 17 P a g e
Visit Tri-Valley Airports The closest major airports are Oakland International (OAK), San Francisco International (SFO) and San Jose International (SJC). The Tri-Valley area also includes Livermore Municipal Airport, which is owned by the City of Livermore and operates as a division of the Public Works department. It services private, business and corporate clients. Highway Access The Tri Valley is located within close proximity to the greater Bay Area with excellent access from the south and east bay. Highways I-680 and I-580 provide excellent access but are often the source of one of the area s greatest challenges, traffic. Traffic times in excess of one hour to travel twenty miles are frequent, and are a concern in impacting visitors experiences and access within the Tri-Valley area. Table 5 - Highway Access Danville Dublin Livermore Pleasanton San Ramon I-680 I-580 Transit Systems Another important regional asset is rapid transit access via Bay Area Rapid Transit (BART) which provides access and connectivity throughout the greater Bay Area. Currently BART has stations in Dublin and Pleasanton with proposed stations in Danville, Livermore and San Ramon. Table 6 - Transit Systems RAILS Danville Dublin Livermore Pleasanton San Ramon Bay Area Rapid Transit (BART) Proposed Proposed Proposed Altamont Corridor Express (ACE) BUS Danville Dublin Livermore Pleasanton San Ramon WHEELS County Connection (Central Contra Costa Transit Authority, or CCCTA) 18 P a g e
Visit Tri-Valley Arts and Culture The Tri-Valley region has a variety of arts and cultural activities, festivals, galleries and museums for both local residents and visitors to enjoy. One of the key areas of concern is the need for a more regional approach to the arts and cultural assets of the region, providing visitors with a comprehensive view of all available activities. Table 7 - Arts and Culture Danville Dublin Livermore Pleasanton San Ramon Art events Historic Festivals and fairs Wine events Performing arts centers & events Museums Galleries Downtown Areas Perhaps one of the most defining assets for any tourism destination is its downtown area. Today visitors enjoy walkable downtowns that provide a range of dining, shopping and lodging activities that give visitors a sense of the community and its authenticity. Currently the Tri-Valley area has three downtown areas including Danville, Livermore and Pleasanton. Table 8 - Downtown Areas Danville Dublin Livermore Pleasanton San Ramon Downtown area? Y N* Y Y N** Downtown association Y - Y Y - Member California Main Street Alliance N - Y Y - Historic Y - Y Y - Special events Y Y Y Y Y Shops Y Y Y Y Y Restaurants Y Y Y Y Y * Dublin Downtown Specific Plan, finalized in 2011, includes several improvements for the area. The plan notes "Opportunities exist to create a more urban character that enhances the environment for pedestrians, bicyclists, and transit riders." 7 ** Plans for a city center intended to create a more downtown feel were temporarily postponed in 2008 due to the economic decline. The plan is that the project will move forward when economic conditions improve." 7 Dublin Downtown Specific Plan, 2011 19 P a g e
Visit Tri-Valley Shopping/Dining While the Tri-Valley region may perhaps be best known for the Livermore Premium Outlets, Stoneridge Shopping Center and Hacienda Crossings, historic downtowns in Pleasanton, Danville, and Livermore have long provide shopping and dining opportunities for visitors. Table 9 - Shopping Danville Dublin Livermore Pleasanton San Ramon Accessories & jewelry Apparel Bicycle Books Children's apparel Chocolate/candy Cosmetics Florists/nurseries Gift/specialty Gourmet Hardware Health Housewares & home furnishings Leather/luggage Music Party supplies Pets Shoes Sporting goods Toys Table 10 - Dining Danville Dublin Livermore Pleasanton San Ramon Bakery/coffee Casual dining Fast food/deli Fine dining 20 P a g e
Visit Tri-Valley Part 3: Pipeline Projects In addition to the current tourism assets there are a number of related projects in the development pipeline that will add to and/or enhance the tourism experience. These major projects include the following: San Ramon City Center The San Ramon City Center will include30 acres and 2.1 million feet of leasable space. The downtown area will create a neighborhood atmosphere that will combine residential living, a hotel and approximately 680,000 square feet of for commercial office space and 100,000 feet of restaurant space. Bishop Ranch AT&T Purchase The Bishop Ranch Business Park has indicated it will purchase the old AT&T regional headquarters in San Ramon with the intent of creating a large office campus. As part of this purchase it is anticipated there will be exhibit space, as well as an outdoor concert venue with upgraded food service. Livermore Premium Outlet Expansion Currently the Livermore Premium Outlets have 130 stores. Their Phase 2 development is looking to add an additional 80 stores and 800 jobs, making this one of area s largest retail shopping experiences. Alameda County Fairgrounds The Alameda County Fairgrounds currently provides a facility to host a variety of local and tourism related events. The Fairgrounds have already started a facility upgrade and is in the process of reviewing its assets for additional changes and improvements. Dublin Emerald Glen Recreation and Aquatics Center The City of Dublin is in the process of developing a new recreation and aquatics center, which will include locker facilities, classrooms, swimming facilities and an amphitheater. Wine Country Trolley Livermore is anticipating a new wine country trolley. Initial efforts will start with 20 seats going to 4 wineries and lunch, with a pick-up at various hotels. Bayer Ranch in Livermore This new development includes 6 or 7 winery pads, a 10,000 square foot event space and possibly 20 sleeping rooms. The primary vendor will be Nottingham. 21 P a g e
Visit Tri-Valley Bernal Community Park Approved $16 million plan to add three all-weather play fields and a 40-acre wooded nature area to the Bernal Community Park. Danville Hotel Redevelopment The Danville hotel redevelopment will include over 34,000 feet of residential, retail and dining space adding to the downtowns appeal and increasing the potential for attracting new businesses and restaurants. Kids Country Center for the Arts & Sciences Proposed center will include hands on instruction for science, technology, engineering, arts and mathematics creating the potential for a major attraction for families. 22 P a g e
Visit Tri-Valley Part 4: Tri-Valley Tourism Asset Gaps The goal of this project was to identify potential assets that would strengthen tourism visitation and stays within the Tri-Valley region. To that end SMG interviewed a cross-section of stakeholders within the Tri-Valley area to better understand their perceptions of those additional assets that would improve tourism within the region. Traditionally assets have been considered primarily tangible, such as stores and museums. For this project we have considered both tangible and intangible assets that would improve tourism to the region. In considering both tangible and intangible assets it is also important to consider how to best leverage the region s existing assets and the segments they could attract with potential new assets. In considering needed tangible tourism assets the comments provided by those interviewed fall into four different categories including lodging/meeting assets, recreation facility assets, infrastructure assets and cultural assets. Tangible Assets Needs 1. Develop a Broader Lodging Supply Mix One of the most frequently mentioned needs expressed by those interviewed was the need for a broader lodging supply mix to attract different visitor segments. As was previously identified in this report the Tri-Valley region has 4,295 lodging units. These units are both branded and unbranded hotel/motels and constitute the current lodging supply. What many interviews identified is the potential need for additional types of leisure lodging supply including both leisure lodging hotels and bed and breakfast/inn type properties, which would complement the mix of existing properties. It is felt the addition of these lodging supply elements would broaden the visitor base from its current highly concentrated business traveler visitor base to one that includes both business and leisure travelers. When looking at the leisure segment the focal point must come down to the set of demand generators that exist for leisure visitation, namely what demand generators must be created to spur leisure visitation within the Tri-Valley region. Most destinations immediately default to recreational elements such as outdoor activities (golf, hiking/biking, water sports, to name a few), yet the concept of sedentary recreation is often overlooked or misunderstood as a demand generator. It is believed both must be considered and developed appropriately to build leisure demand for the region. 23 P a g e
Visit Tri-Valley Demand Generator: Recreational and Outdoor Leisure The Tri-Valley has limited major facilities that draw recreational demand. Most golf courses are in fact private country clubs, yet several public access facilities such as Poppy Hills (Northern Californian Golf Association member property) and the Course at Wente Vineyards provide leisure destination quality play. Several other public courses also exist. Overall, the combined available tee times present limited opportunity to build broad demand, yet focused opportunities could exist. There are numerous sports playing fields found in the region but they can conflict with local use by resident populations. Family leisure travel for youth sports team play is a very significant weekend and year-round demand generator. It can create limited category hotel demand as well as business suite demand for weekend nights. This would allow higher utilization of existing products if the programs were strategically marketed and sold. It would likely require significant access to play fields, possibly requiring development of additional play field complexes. Demand Generator: Regional Parks Del Valle Regional Park Located south of Livermore, this park boasts a lake five miles long perfect for a variety of water-oriented recreation. The lake is surrounded by 4,395 acres of park land ideal for hiking, horseback riding, and nature study. Del Valle also is the eastern gateway to the Ohlone Wilderness Trail, with 28 miles of scenic backcountry trail. Mt. Diablo State Park Home to the 3,864 foot Mt. Diablo, this park is one of the ecological treasures of the San Francisco Bay Area. Located outside of San Ramon and Danville, the park features an extensive trail system, hiking, biking, and horseback riding and camping. East Bay Regional Park District-The East Bay Regional Park District is a system of parklands and trails in Alameda and Contra Costa counties that comprises 114,000+ acres in 65 parks, including over 1,200 miles of trails. All three parks are significant regional attractions but have yet to be proven overnight demand generators on a consistent basis. Demand Generator: Livermore Valley Wine Country The Livermore Valley has long been a wine region of notoriety, dating back decades. Principle players Wente and Concannon have long histories; while a new contingent of small boutique wineries have flourished in the last decade. A redevelopment of downtown Livermore has brought a fashion of wine country hospitality to its streets with restaurant offerings and shopping. It remains without major branding to compete against other well -known leisure visitation wine districts such as Napa Valley, Sonoma, Lodi and the Santa Cruz Mountains. In 24 P a g e
Visit Tri-Valley addition, it is isolated to the southern-most reaches of the Tri-Valley, and has less of an impact on the northern part of the region. Demand Generator: Sedentary Leisure This is an often overlooked demand generator, yet holds significant potential if developed properly. Sedentary leisure is about food and dining, performing arts and culture, learning experiences and embraces that sector of the population that is not overtly athletic and does not participate in outdoor recreation or sports. Destination dining is well understood in the Napa Valley where a disproportionate number of sophisticated restaurant experiences are the mainstream with notable celebrity chef/owners at the helm. Those who cherish culinary experience over other activities will gravitate to the leisurely pursuit of gourmet dining over a period of days. Cultural and performing arts have long been key elements of destination visitation in areas such as Santa Fe, NM (Santa Fe Opera), Monterey, CA (Monterey Jazz Festival), and Aspen, CO (music festival, literary festival). These are examples of longer term demand from ongoing performing arts events. Similarly the Tri-Valley area boasts the annual Eugene O Neill festival for three weeks in September. This event coupled with other cultural and performing arts events can serve as a basis for increased interest in visiting the area. Understanding the significant existing dining experiences and cultural offerings within the Tri- Valley region could lead to the targeted development of alternative markets and the corresponding development of appropriate types of lodging considerations to satisfy this consumer. Lodging Orientation for Leisure The current lodging mix is primarily clearly branded mid-market offerings that focus on the considerable corporate travel found within this region. That has led to a product defined for this traveler segment with amenities scheduled around their needs. Such property configuration has resulted in a mid-week occupancy pattern with low weekend occupancy. To break that pattern and expand occupancy across the Tri-Valley region, it is critical for lodging properties to support leisure activities. One way to do so is for properties to have fully trained staff that can expound on such activities. Opportunities will be driven by a mindset change and either expanding or re-theming existing facilities. It is rare the core leisure traveler feels well served by a business property and viceversa. The current configuration suggests that lodging focuses on corporate travel, meetings, and business appointments and amenities. 25 P a g e
Visit Tri-Valley A strong leisure property needs to fully satisfy the primary leisure demand needs, provide robust activities on-site and provide significant resources for guests to enjoy the leisure offerings of the destination. Sustainable program development is critical. Dedicated long-term development with a clear focus on one or several leisure pursuits can sustain a property and feed necessary demand into the remainder of the supply chain. Examples of such might include: Development of a small leisure luxury property focused on sedentary dining and the wine country lifestyle experience. Ongoing wine maker dinner programs pairing Livermore Valley wines with celebrity chefs (even if visiting). Independent high end restaurants with foodie credentials can draw overnight destination diners who then fill rooms. Cultural and performing arts events, concerts, or lecture series, can drive visitation from engaged consumers if the right facilities, both indoor and outdoor, are present and of a quality and amenity levels expected by the considered visitor. Development of existing venues or creating appropriate new venues might be required. A leisure property needs to provide ample on-site activities such as spas tailored to the level of audience. This means in-room entertainment amenities over business support services, trained concierges connected with the communities, and exclusivity that defines the top of the destination. Small over large is a virtue in top flight leisure properties. Positioning Where does Tri-Valley stake a position? One of the most challenging issues for leisure travel is the ability to appropriately position the destination on a unique set of perceptions. Business travel is the current default position within this region, which is understandable given the urban developed nature. At the same time this region is also positioned with some of the higher end residential and commercial zones in the East Bay. Currently the overall lodging mix is positioned to corporate travel and served by a series of well-defined brand hotel chains that fit the corporate segment. This is not ideal for positioning a leisure destination, and supports the development of one or several leisure boutique properties. Better understanding of the demographic nature of the prospect leisure traveler must drive how any new leisure product might be developed and sited. It could well be a leisure property in the south of Tri-Valley region would segment differently than a property on the north of the region. 26 P a g e
Visit Tri-Valley Wine country might well be primarily isolated to the Livermore (and to a lesser degree East Pleasanton) area while outdoor exploration (hiking, biking, naturalist activities) may be better suited to the Mt. Diablo(California) State Park and East Bay Regional Park District trails in Pleasanton area of Tri-Valley. The fact that the well-established Amgen Tour of California has now brought considerable attention to the mountain stage of Mt Diablo suggests that an entire cycling experience surrounding the various routes used could mimic what happens in France during the off months from the Tour de France (in a small scale). In such a hypothetical scenario it is clear a leisure property would need to provide every amenity that recreational sport participant might need or desire. The Poppy Hills Golf Course is a regional destination golf course developed for members of the Northern California Golf Association. It is in wine country and seeks members of the Association to visit for periodic rounds as well as key tournaments. Here a property would have a very different set of amenities and services and would likely serve a very different demographic group. Two Possible Opportunities South Tri Valley A golf wine country themed leisure resort comprised of 50 to 100 rooms, with a significant restaurant experience (rooms built around food and wine), high caliber spa and major water feature/outdoor bar - function space/ gym. The property would need to partner with both the Wente Golf Course and the Poppy Hills Golf Course for play access and business pursuit. This would potentially attract a leisure 1-2 night higher end destination audience. The property could be a keystone image to the entire wine country, corporate nature of the Tri-Valley region. North Tri-Valley An exclusive 50 100 room resort oriented spa and restaurant property designed to integrate the outdoor exploration of Mt Diablo State Park. This would be an urban spa in a natural close proximity setting. It should be positioned on natural elements, and incorporate all aspects of Mt Diablo State Park that it can implement at the luxury level. Affluent bicycle enthusiasts who want to experience the Tour of California mountain stage courses provide additional program opportunities. Food and celebrity restaurant status must complement the room demand. A Relax and Chateau type property affiliation would be crucial. 27 P a g e
Visit Tri-Valley Action Step(s): Short Term: (0-18 Months) 1. Continue to focus on existing and developing new recreation, special events, and cultural arts programs in an effort to support the potential development of a leisure property. 2. Promote a better balance between the Livermore wine industry and other recreational, special events and arts and cultural activities in an effort to promote and attract a broader reach to leisure segments, as well as provide additional reasons for business travel to extend their stay or make a return trip. 3. Work with the lodging industry to clearly provide them with the marketing tools to develop more pre and post business travel stays. Long Term: (19+Months) 4. Develop and implement a region-wide lodging supply and demand analysis that can identify current and future lodging needs, price points, potential sites and demand levels. Make the report available to potential developers who are interested in development opportunities in the region. 28 P a g e
Visit Tri-Valley 2. Develop Additional Meeting and Convention Space The overnight visitation pattern to the Tri-Valley region is very much corporate and business travel dominated, especially in San Ramon and Pleasanton. Scientific and government travel has considerable impacts in Livermore, home to Lawrence Livermore Lab and Sandia National Lab. Currently the hotel facilities have focused on those demand generators serving latent demand. Meeting space is largely supplied by the hotel properties and to a certain degree the San Ramon Valley Conference Center. The ability to attract more business travel for meetings and conferences is impacted by the lack of a significant meeting and convention facility capable of handling larger groups for corporate, association or industry gatherings as well as limited availability mid-week lodging supply given the current occupancy rates. Tri-Valley s lack of a confined city space is also a disadvantage. Some of the largest conference rooms offer little more that 3,000 to 4,000 square feet and handle groups to 400 in broadest capacity configuration, yet most space is smaller, even at larger properties such as the Double Tree in Livermore or Holiday Inn in Dublin. To support more meeting space, the creative use of winery facility barrel rooms, function space and grounds has provided some expansion in venue capacity, but these options are not dedicated to ongoing meeting business. What clearly is missing is larger space to engage broad out-of-area groups in their meeting needs. Yet there is very little demand information available to understand what scope and dimension is needed, and how existing room inventory utilization can accommodate larger group availability. While the Tri-Valley currently makes efforts to encourage meeting activity, there is little competitiveness to offerings not only around the broader Bay Area but simply within the East Bay. At this time the Tri-Valley organization is not equipped to be a meaningful player in the broader segment, yet can work to develop solid information that can lead to the prospect of capacity to engage and compete. 29 P a g e