Feasibility Study

Grand Rapids, Michigan
Dominique DeLisi
1-(302)650-5151
ddelisi@udel.edu
Victoria Cirillo - Louth
1-(302)983-0645
vlouth@udel.edu
Joyce Chan
1-(917)-755-6287
chjoyce@udel.edu
Tara Ramirez
1-(201)744-7234
tararam@udel.edu
Home2 Suites
Grand Rapids, MI
Hotel Project Proposal

1Home2 SuitesbyHiltonGrandRapids,MI
Table of Contents
Introduction ……………………………………………………………………………………… 3
Executive Summary ……………………………………………………………………………... 5
Market Area Analysis …………………………………………………………………………… 8
Operational Strategies ………………………………………………………………………….. 20
Franchise Comparison …………………………………………………………………………. 25
Product & Service Description ………………………………………………………………… 31
Operational Plans ………………………………………………………………………………. 39
Marketing Strategies & Sales Plan …………………………………………………………….. 43
Management Organization …………………………………………………………………….. 47
Project Construction Costs …………………………………………………………………….. 50
Project Management Action Plan ……………………………………………………………… 54
Sustainable Approaches ……………………………………………………………………….. 59
Financial Statements …………………………………………………………………………… 66
Conclusion ……………………………………………………………………………………... 72
Appendix A – Market Segmentation …………………………………………………………... 74
Appendix B – Financial Statements …………………………………………………………… 76

Introduction

Introduction
This document is a business proposal to develop a Home2 Suites by Hilton in Grand Rapids,
Michigan. The location chosen for this hotel will be outside of the downtown area, near Reeds
Lake. The Home2 Suites hotel will offer 100 rooms available to prospective guests. After
analyzing the downtown area of Grand Rapids, Michigan, it was decided to place the hotel
outside of the downtown area near Reeds Lake because of the demand for a hotel in this area.
With a breathtaking view of the lake, and great deal of retail and attractions located minutes
away, it was determined that this particular area would fit best with the Home2 Suites. Home2
Suites by Hilton is an all-suite extended stay hotel featuring contemporary accommodations and
customizable guest room design. With the change in traveling trends, today’s travelers are
younger and globally minded. Today’s travelers are looking for more modern, and high use of
technology in hotels. It will appeal to a variety of guests including but not limited to families,
business travelers, and all guests seeking a home away from home. Home2 Suites, by Hilton,
“guarantees an engaging experience and clean, comfortable accommodations. If guests aren’t
completely satisfied, let us make it right or that night’s on us.” As soon as construction is
complete, this will be demonstrated by producing revenue and providing a home away from
home for prospective guests.
Confidentiality Agreement
It is understood and agreed to that the below identified discloser of confidential information may
provide certain information that is and must be kept confidential. To ensure the protection of
such information, and to preserve any confidentiality necessary under patent and/or trade secret
laws, it is agreed that
1. The Confidential Information to be disclosed can be described as and includes:
Hotel Technical and other Business information relating to proprietary ideas and
inventions, ideas, patentable ideas, trade secrets, drawings and/or illustrations, patent
searches, existing and/or contemplated products and services, research and development,
production, costs, profit and margin information, finances and financial projections,
customers, clients, marketing, and current or future business plans and models,
regardless of whether such information is designated as “Confidential Information” at
the time of its disclosure.
2. The Recipient agrees not to disclose the confidential information obtained from the discloser
to anyone unless required to do so by law.
3. This Agreement states the entire agreement between the parties concerning the disclosure of
Confidential Information. Any addition or modification to this Agreement must be made in
writing and signed by the parties.

4. If any of the provisions of this Agreement are found to be unenforceable, the remainder shall
be enforced as fully as possible and the unenforceable provision(s) shall be deemed modified to
the limited extent required to permit enforcement of the Agreement as a whole.
WHEREFORE, the parties acknowledge that they have read and understand this Agreement and
voluntarily accept the duties and obligations set forth herein.

Executive Summary

Executive Summary
The anticipated hotel for Grand Rapids, Michigan area is a Home2 Suites, the newest brand of
Hilton Worldwide. It is planned to be looking out towards Reeds Lake, a beautiful fresh-water
lake of 265 acres. Adding this hotel will supply the city with 100 quality rooms that will
accommodate both business and leisure travelers. The brand new property will be fully capable
and welcome big parties of guests such as but not limited to families, other special occasion
visitors such as those to a wedding or social convention goers, and business travelers in town to
use the convention centers’ meeting space.
Each and every suite will be fully equipped with chic style, in suite kitchen amenities from fridge
to utensils, a business center, fitness room, pool, walking track, an on-site convenience store, and
free Wi-Fi and hot breakfast every day of your stay. The hotel will attract the exponential
popular trend of those wanting to stay in a suite. Home2 Suites by Hilton will be the place to stay
that will exceed both the needs and expectations of both leisure and business travelers.
Home2 suites target market as a new brand is leisure travelers, and the east Grand Rapids
property will also target the business market. Leisure travelers will stay for style and well-priced
room accommodations. The suite atmosphere provides guests with a sense of privacy and the
comforts of their home without having to stay home. Group Travelers are another highly
anticipated type of guest at the Home2 Suites hotel. With 3-4 people being able to fit in a room at
a time, the group’s spatial and payable desires are met. However, research shows that the city of
Grand Rapids, Michigan is a vast business center and attracts business travelers from around the
world; and so due to the variety of guests, Home2 Suites is designed to accommodate all
markets. A more in depth look at local demand generators, tourist attractions, and trends in the
Grand Rapids market is necessary to determine current target markets and can be found in the
Market Analysis portion of this proposal.
The Home2 Suites will be located about 14 minutes east of the Downtown area, and about 17
minutes to the Gerald R. Ford International Airport making it prime real estate practically in the
middle of both. The hotel will provide an easy commute to those who need to be in downtown
for business but, do not wish to be in the hustle of it all. From exploring the Grand Rapids
shopping scene to sandy white beaches and cultured packed museums to the Grand festivals that
bring guests from all over the world, guests will never be bored with all of the excitement. Only
to start the list of cultured attractions and only 7 minutes north east of the location is the world-
renowned sculpture and horticultural landscape park known as Frederik Meijer Gardens &
Sculpture Park. A place of impeccable proportion of not only flowers but of guests and those in
need of a venue. Other attractions such as the John Ball Zoo, the abundance of museums for art
and history, adventurous activities like kayaking and dune buggy riding are only a few of what
Grand Rapids has to offer with a short drive away for the enjoyment of all the hotels guests.
The competitive set is comprised of six hotels, all of which are a reasonable distance to the
Home2 Suites. The hotels consist of the Comfort Inn Grand Rapids Airport, the Comfort Suites
South Grand Rapids, the Holiday Inn Express Hotel & Suites Grand Rapids South, the Clarion

Inn & Suites Grand Rapids Airport, the Ramada Plaza Grand Rapids, and the Country Inn &
Suites Grand Rapids. All of these hotels target a similar market and provide similar
accommodations. However, the Home2 suites will differentiate itself from its competitors by
being a Hilton Worldwide brand hotel, offering HHilton Rewards one of the best rewards
programs in the world, brand new and stylish rooms and amenities, and a staff with integrity that
will surpass the expectations of all guests.
The total projected cost for the project is $7,522,200 – $12,661,100 equaling to about $69,650
per key at the lowest. The largest source of revenue will come from rooms’ revenue which will
by 2018 be projected at $18,658,306, bringing in more than the initial investment. The
occupancy rate in the first year could be slightly higher than what is projected, considering the
hotel will be brand new, attracting guests to the brand new amenities provided by the hotel and
thanks to the marketing staff. Throughout the first five years of operation, occupancy rates will
continue to grow at a steady rate to about 62.5% and ADR at just below 100% at 99%, keeping
in line with the trends STR data of the Grand Rapids market.
The Home2 Suites brand is going to implement several sustainable practices that they already do,
in all of the other locations. Home2 Suites is earth conscious and proving so are the incorporated
aspects like the saline-based pools, convenient recycling collection stations on every floor and
each suite, using only appliances with Energy Star ratings, and being eco-friendly. Sustainability
is simply good business. Home2 Suites would also bring the community together with YOUR2
HANDS™. Producing a local community campaign encouraging and empowering individuals to
make their mark on our planet, encouraging involvement from each of our hotels within their
communities and awareness for the Home2 brand and its core values. Overall, the Home2 Suites
will be an asset to the Grand Rapids area.

MARKET ANALYSIS

Market Analysis
Historical Abstract
Over 2,000 years ago, people associated with Hopewell culture occupied the Grand River Valley.
The Grand Rapids area was first settled by Europeans near the start of the 19th century. The first
European settlers consisted of mainly missionaries and fur traders. These settlers lived alongside
the Ottawa people, with who they traded European metals and goods for fur pelts. In 1826
Detroit-born Louis Campau became the official founder of the Grand Rapids area. By 1857, the
City of Grand Rapids’ area totaled to about 10.5 square miles. Grand Rapids was an early center
for the automotive industry. Grand Rapids also became the first city in the United States to add
fluoride to its drinking water in 1945.
Geography
With about 45 square miles, Grand Rapids is bisected by the Grand River, Michigan’s longest
river and about 30 miles east of Lake Michigan. This city is located just near the Grand River
Valley with elevations ranging from 785 feet to 1,075 feet above sea level. Because of the
location of this beautiful city, this has become a tourist destination during the warm seasons with
the shoreline and its beaches.

Climate
Much of this regions climate is influenced by the lake which tempers cold waves from the
northwest and west during the winter season producing effects of vegetation and frost during the
season. Because of the lakes influences, Grand Rapids does not experience seasonal extremes.
Although the Grand Rapids may be hot, humid weather can be expected for about three weeks
during the summer. The average temperatures for Grand Rapids range from January, 21.8 degree
F, to July, 71.6 degrees F, with an annual average of about 47.4 degrees F. The average annual
precipitation features about 37.13 inches of rain and 71.9 inches of snow per year.
Figure 3.1
Climate Graph
Population
The city of Grand Rapids is one of the largest cities in Michigan. As of the census of 2010, the
population is 188,040, with about 72,126 households and 41,015 families residing in the city.

Demographics
The demographics below are broken up into parts for the allowance of comparability amongst
themselves. Divvying the population this way will allow for the focus of a certain area or areas
of the market to reach out to and draw information from.
Age Distribution
The mostly populated age range is 25-44; while the second most populated age range is
45-64 years old. The metropolitan area surrounds the central city of Grand Rapids. This city is
noted for its proximity to the Lake Michigan shoreline and its beaches. Because of this, the area
has become a tourist population in the warm seasons.
Figure 3.2
Source: US Census Bureau
Grand Rapids City
Subject 2000 2010 2020 2025
Total Population 197,800 188,040 333,896 346,407
Male Population 96,761 91,579 164,812 171,196
Female
Population
101,039 96,461 169,084 175,211
Under 25 Years 79,462 73,592 106,187 108,371
Over 24 Years 118,3385 114,448 234,507 245,569
Racial Distribution
The racial makeup of the city was 64.6% white, 20.9% African American, 15.6% Hispanic or
Latino, 0.7% Native American, 1.9% Asian and about 7.8% other races. Within the 72,126
households, 31.1% had children under the age of 18 residing within them, 35% were married
couples living together, and 43.1% were non-families.
Figure 3.3
Racial Distribution

Continue of Demographics
The average household size was 2.49 and the average family size was 3.2. The estimated median
household income in 2012 was $38,643, with the estimated per capita income in 2012 was
$19,689. Within the city of Grand Rapids, there is an increase in job availability and business
opportunities within Grand Rapids which also increases the demand for hotels.
Figure 3.4
Average Household Income
Retail Sales
Grand Rapids, Michigan’s downtown shopping area is a well-known tourist attraction in the city.
The downtown shopping area has a beautiful landscape over-looking the Grand River Valley.
The retail sales per capita was $10,855 in 2007. The chart below shows the general merchandise
category as one of the highest for the Grand Rapids city area.
Figure 3.5
Retail Sale Comparisons
Grand Rapids, MI Michigan United States
Total Area Household Income $4,271,073,988 $264,300,855,408 $8,877,041,207,141
Median Household Income $46,005 $53,201 $55,970
Average Household Income $58,728 $68,163 $74,974
Per Capita Household Income $22,202 $26,542 $28,779
Income Less than $15,000 10,504 14.44% 454,884 11.73% 14,165,359 11.96%
Income $15,000 to $24,999 8,257 11.35% 383,930 9.90% 10,837,720 9.15%
Income $25,000 to $34,999 8,943 12.30% 414,230 10.68% 11,829,365 9.99%
Income $35,000 to $49,999 11,802 16.23% 586,061 15.11% 17,010,932 14.37%
Income $50,000 to $74,999 14,146 19.45% 778,161 20.07% 22,437,035 18.95%
Income $75,000 to $99,999 9,082 12.49% 529,053 13.64% 16,654,204 14.07%
Income $100,000 to $124,999 4,893 6.73% 313,145 8.08% 10,110,396 8.54%
Income $125,000 to $149,999 2,158 2.97% 172,348 4.44% 5,931,821 5.01%
Income $150,000 to $199,999 1,413 1.94% 122,737 3.17% 4,245,070 3.59%
Income $200,000 and Over 1,528 2.10% 122,955 3.17% 5,180,241 4.38%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Building Material & Garden
Clothing & Accessories
Electrical & Appliances
Food & Beverage
Food Services
Gasoline Stations
General Merchandise
Health & Personal Care
Home Furnishings
Motor Vehicles
Nonstore Practices
Sporting Goods
Grand Rapids, MI Michigan United States

Work Force
Grand Rapids, Michigan is ranked by Forbes Magazine as #39 best place for business and
careers and #17 in job growth. As of 2013, the unemployment rate for was 5.5% with a job
growth rate of 3.2%. The projected annual job growth rate is 2.7%.
The graph below is a sample of Grand Rapid’s top 10-employment industry. Automotive parts,
industrial machinery, printing, graphic arts, grocery wholesalers, and food processors
compromise a substantial portion of the economic base. International businesses also play an
important role with more than 50 foreign-owned firms in the county and many metropolitan area
firms involved in international trade. Moreover, tourism is an emerging industry as West
Michigan increasingly becomes a popular vacation and convention destination. With that said,
finance, insurance, and real estate account for 5.3% of the city’s employment while wholesale
trade accounts for 4.4% of the city’s employment. The largest industry percentage is services for
Grand Rapids, Michigan; services account for 42.0% of the city’s employment. These industry
numbers are important to look at because they produce a substantial number of visitors who are
not necessarily rate sensitive.
Figure 3.6
Top 10 Employers
Market Segmentation
As of 2009, Michigan leisure is up in every volume metric; visitors, parties, days spent at the
destination, and direct spending. Leisure business travel for this segment consists of getaway
weekends, general vacations, visiting friends and family, special events, and other personal trips.
The group-meeting segment of this market consists of conventions along with training and
seminars. Finally the transient business segment of the market consist of client service and
consulting, inspection and audit, construction and repair, sales and purchasing, as well as
government and military. See market segmentation graph in appendix A.

Transportation
Grand Rapids and its 45.27 miles is very easy to get to and through. With access by plane, train
and automobile, this buzzing city has something to do at almost every corner. Grand Rapids is
situated at the junction of two major expressways, interstate 69 and interstate 94. There is the
Gerald R. Ford International Airport which offers flights in and out from six different airlines.
Not only by plane or automobile, Amtrak also services the area daily with rides from Grand
Rapids to Chicago. Another interesting fact is that Michigan is within a day's drive of half the
U.S. population making it an easy, fun, accessible destination.
Gerald R. Ford International Airport at Grand Rapids
Ranked by Airports Council International as one of the top five best airports in the world (by
size), GRF International Airport is the primary air transportation facility serving Grand Rapids
and the entire West Michigan region. Located at the intersection of 44th Street and Patterson
Avenue SE, it is just 15 minutes or so from downtown Grand Rapids. The airport serves more
than 2 million passengers each year. Daily nonstop service is offered to the following major
market destinations, with continuing service available to points around the world.
Gerald R. Ford International Airport is served by six passenger airlines with 120 daily scheduled
nonstop flights. Approximately 6,250 travelers pass through Gerald R. Ford International Airport
each day. There were about 2,237,979 passengers that have traveled through Gerald R. Ford
International Airport in 2013.Takeoffs and landings in 2013 totaled more than 75,000 - an
average of more than 200 a day. Gerald R. Ford International Airport is the 82nd busiest
commercial airport in the nation and the second busiest airport in Michigan.
Figure 3.7
Gerald R. Ford International Airport at Grand Rapids
Year Passenger Traffic Percent Change from
Previous Year
2014 2,335,105 4.34
2013 2,237,979 4.83
2012 2,134,956 -6.17
2011 2,275,332 4.09
2010 2,185,924 23.40

Amtrak Train Services
Amtrak serves Michigan with three daily service trains; the Wolverine Service, Blue Water, and
Pere Marquette. There are over 101,000 Michigan residents are members of the Amtrak Guest
Rewards frequent user program which makes it one of the most popular transportations. It is not
only a good use for transportation but, provides the Amtrak employees of Michigan with wages
as a total with $19,545,302. At their new location this connects with the intercity and local bus
service (The Rapid) and provide an attractive ADA-compliant facility for Amtrak customers.
Bus Services
The Rapid (Interurban Transit Partnership) is the authority that provides a variety of public
transportation services for the Grand Rapids metro area and beyond. It operates fixed route,
demand-response services for people with disabilities and those living outside the fixed-route
service area, and car and vanpooling programs among other services.
Attractions
Frederik Meijer Gardens & Sculpture Park
1000 E Beltline Ave NE, Grand Rapids, MI 49525
A destination marrying world-renowned sculpture and horticultural landscapes, Frederik Meijer
Gardens & Sculpture Park's indoor and outdoor gardens and sculpture galleries hold something
for the whole family to enjoy. The 158-acre main campus may take up to two, four, or eight
hours to walk through depending on what you choose to explore. Here at this beautiful attraction,
not only can you stop and smell the roses and marigolds but, enjoy an array of concerts or be a
guest to a wedding. This place has everything you need and even delicious foods in order to
refuel from your long sightseeing tours.

Gerald R. Ford Presidential Museum
303 Pearl St NW, Grand Rapids, MI 49504
The Gerald R. Ford Presidential Museum is the presidential museum and resting place of Gerald
Ford, the 38th President of the United States. Coming here you not only get to view the museum,
you get to experience history by participating in it thanks to hands-on, interactive, video, and
holographic displays. The Gerald R. Ford Presidential Museum not only lets you experience the
past but, the present as well. Enjoy special events, everything from a 1940s fashion show to
activities for school children. The Museum also hosts naturalization ceremonies for new citizens
and opens the grounds to the community festivities and fireworks on the fourth of July.
John Ball Zoo
1300 Fulton W, Grand Rapids, MI 49504
John Ball Zoo is a nonprofit corporation committed to the advancement of public education on
the need for wildlife conservation and preservation. The zoo is the 4th most attended cultural
facility in Michigan with 470,000 visitors in a past year. Over 250 species and 2000 individual
animals are care for daily and available to see; from snow leopards and crazy colored frogs to
penguins and eels.
GRJazzFest
Rosa Parks Circle, Downtown Grand Rapids MI
Let the music move you along with nearly 10,000 others. Over the two day spectacle, people of
all ages, races and socioeconomic levels enjoyed two days of FREE, live jazz. They came from
all over the country and Canada! With the help of volunteers and sponsors, people come to enjoy
good food and more importantly good music by awesome performers.

Beaches
Get your tan on laying by crystal-clear fresh water as far as the eye can see. Clean, spacious
sugar-sand beaches. Gorgeous sunsets that paint the sky orange and purple and pink. Condé Nast
Traveler named the Lake Michigan shoreline one of the 25 best in the world. MTV ranks Oval
Beach as one the five most beautiful in the U.S. Visitors who spend time on our lakeshore will
tell you it's unlike any other place on Earth. All the more amazing the beaches are just 30
minutes or so away from the bustling heart of Grand Rapids.
Biking
Grand Rapids has earned national recognition for its biking environment. From mountain biking
to street biking, biking along or with a group, Grand Rapids has tons of beautiful scenery to ride
around. The League of American Bicyclists named Grand Rapids a top "Bicycle-Friendly
Community" in 2009 and Outside Magazine named us the "Best Town for Mountain Biking" in
2010.
Other fun activities to do include more museums like the Grand Rapids Art Museum, the Grand
Rapids Children's Museum, and the Grand Rapids Public Museum. Want something else? Be
entertained by attending Laughfest or visiting Performance Arts. The more adventurous types
whether it be families or other groups will enjoy family fun parks and dune buggy riding. During
the winter months there are plenty of mountains to ski and snowboard. And last but, not least for
those who like to golf, you are within a 30 minute drive of about a dozen of them.
Construction Trends (Past & Current)
Grand Rapids is an area of about 45.27 mi² that is right off of the Grand River coming from Lake
Michigan. Since 1960 as stated in the chart above, there has been 45 hotels ranging from luxury
to economy constructed with a majority being sourced in the Downtown area. It has been
reported to be an up and coming area for visitors all over the world. Grand Rapids has dazzling
art and culture, dining and nightlife. According to experiencegr.com the online home to the
Experience Grand Rapids Convention & Visitors Bureau, Grand Rapids and Michigan's West
Coast was named the #1 Travel Destination for 2014 by Lonely Planet. It was ranked number 25

on its annual list of the best performing cities in America by The Milken Institute and has also
made the Top 10 chart for Emerging City in the U.S by Global Trade. From The Best City to
Raise a Family to The Best Beer Town, Grand Rapids Michigan has claimed many awards. With
the traffic of persons coming to visit, Current Trends have been increasing over the past years to
accommodate. The famous Grand Rapids “Medical Mile” is the largest employer in Western
Michigan and with its headquarters located in Grand Rapids, this has allowed the lodging
industry to thrive. Other current trends include the addition of the DeVos Place Convention
Center and The JW Marriott Grand Rapids which opened in 2007. From 2006 – 2009, Grand
Rapids had significant Hotel additions that impacted the market. The Springhill Suites by
Marriott Grand Rapids (2006), the Hampton Inn and Suites (2007), the JW Marriott Grand
Rapids (2007) as mentioned before, and the Hyatt Place Grand Rapids (2009). These four hotels
accounted for an addition of 660 rooms in the area and with more than half of those rooms,
specifically 340 of them, come from the JW Marriot Grand Rapids Hotel. Directly from the HVS
Database of Grand Rapids, it reports that “In early February 2014, CWD Real Estate Investment
announced that a new five-story hotel would be built in downtown Grand Rapids” and “increase
supply by 100-150 rooms”. With the 2009 recession, and a slight decrease along with the rest of
the country; the area has been increasing along all aspects of the lodging industry including
Occupancy rate which is reaching about 70% with an anticipation of further growth. With top
ranking recognitions of Grand Rapids tourism increasing, current trends and new projects will
continue to pop up all over Michigan’s 2nd largest city in order the supply up with the demand.
Figure 3.8
Construction Trends in Grand Rapids, Michigan
Year Built
Facilities Rooms
CumulativeNumber % Number %
1960-1979 11 24% 1,141 25% 1,141
1980-1989 12 27% 1,470 32% 2,611
1990-1999 10 22% 946 21% 3,557
2000-2009 10 22% 915 20% 4,472
2010 0 0% 0 0% 4,472
2011 1 22% 28 61% 4,500
2012 0 0% 0 0% 4,500
2013 1 2% 100 2% 4,600
2014 0 0% 0 0% 4,600
Total 45 100% 4,600 100% 34,453

Estimated Area Occupancy
Figure 3.9 Figure 3.10
Occupancy Percentages by Season Occupancy Percentages by Day
Trying to Estimate Demand
Figure 3.11
Trying to Estimate Demand
The total available room nights did not change much throughout the years so we estimated that in
2015 the total available rooms would probably not change much either. As for the occupied room
nights we saw a pretty steady increase therefore we predict that in 2015 that number will go up
as well. Occupancy, average rate, and RevPAR are also rising from 2009-2014; therefore we
estimate that in 2015 these numbers will increase as well. We concluded that in Grand Rapids,
Michigan opportunities for new hotels are feasible.
Season Estimated Area Occupancy (%)
Winter 50.70%
Spring 63.80%
Summer 72.30%
Autumn 52.70%
Overall Average 59.90%
2009 2010 2011 2012 2013 2014 2014 2015 Avg Annual Compound
Average Daily Room Count 11043 10917 10914 10918 10923 11013 11013 11013 Change 2010-2015
Available Room Nights 4030791 3984693 3983685 3984972 3986861 4019565 1658404 1658404
Change -1.1% 0.0% 0.0% 0.0% 0.8% 0.0% -0.10%
Occupied Room Nights 1794031 1967207 2111914 2187627 2290363 2408903 2408903 259348
Change 9.7% 7.4% 3.6% 4.7% 5.2% 5.0% 6.10%
Occupancy 44.5% 49.4% 53.0% 54.9% 59.9% 59.9% 62.3%
Change 11.0% 7.3% 3.6% 4.6% 4.4% 4.0% 6.2%
Average Rate 82.09$ 81.76$ 85.04$ 89.69$ 93.33$ 97.80$ 97.80$ 102.20$
Change -0.4% 4.0% 5.5% 4.1% 4.8% 4.5% 3.6%
RevPAR 36.54$ 40.36$ 45.08$ 49.23$ 53.62$ 58.61$ 58.61$ 64.18$
Change 10.5% 11.7% 9.2% 8.9% 9.3% 9.5% 9.9%
Season Weekday Weekend Overall
Winter 49.10% 58.40% 53.70%
Spring 59.30% 75.10% 67.20%
Summer 67.60% 84.10% 75.80%
Autumn 50.60% 57.50% 54.00%
Overall 56.70% 68.80% 62.70%

Operational Strategies

Operational Strategies
Vision
Home2 Suites will continue to be Grand Rapid’s most sought after brand for guests, colleagues,
and shareholders. At Home2, the goal is to change the way you think about extended stay. The
overall aim is to provide exceptional experiences through the warmth of hospitality.
Mission
The mission of Home2 Suites is to provide valuable hospitality experiences and services that
exceed the expectations of all guests. Home2 Suites focuses on individual business and leisure
travel as well as travel associated with groups and events. The hotel emphasizes high quality
standards through a modern approach to the midscale extended-stay market. It upholds the Hilton
name in remaining a beacon of innovation, quality, and success. Furthermore, the hotel provides
a fair return on investment for those who entrust it with managing their assets and recognize that
this cannot be done without the well trained, motivated, and enthusiastic employees.
Values
 Commitment to Guest Experiences
Above all, Home2 Suites makes delivering engaging guest experiences the cornerstone of each
and every effort, each and every day. With its commitment to quality, it creates positive and
memorable experiences for every guest.
 Respect and Integrity
The hotel also values respect and integrity on its team. The team values each other, its guests, its
business associates, and the environment. In order to create warm hospitality experiences for all
guests, Home2 provides a level of care for its team that inspires by example.
 Growth
Launched in 2009, Home2 Suites was the first new brand introduced by Hilton Worldwide in 20
years. This brand is growing and has several development opportunities. The hotel is committed
to delivering shareholder value; its success will result in consistent investment returns.
 Dedication to the Community
Home2 promotes a great deal of community involvement. Being the only hotel brand with a core
standard of giving back to the community it continuously provides guests with sustainable
products and services they can feel good about.
It is the unwavering commitment to the values that will continue to keep Home2 Suites on top.

Strengths, Weaknesses, Opportunities, & Threats (SWOT)
Strengths
The most significant strength for Home2 Suites in Grand Rapids, Michigan is undoubtedly its
opportune location. Home2 is located less than ten miles away from Gerald R. Ford International
Airport—the second busiest airport in Michigan. This airport is served by five passenger airlines
with 120 daily scheduled nonstop flights to and from 24 major market destinations. Grand
Rapids is economically diverse and has been listed one of the 10 Best Cities for Business in the
U.S by Fortune magazine as well as Best Places for Businesses and Careers by Forbes—this
attracts a great deal of our hotel’s business market segment. Moreover, our hotel is just minutes
away from downtown Grand Rapids. Downtown Grand Rapids is a thriving place that includes a
growing office environment, vibrant nightlife, and many cultural institutions.
Furthermore, Grand Rapids, Michigan has an abundance of natural resources and recreation
including a 300-mile stretch of beaches that keep Michigan a top tourist destination. Due to
Michigan’s temperate latitude in which creates four distinct seasons, Home2 also has the ability
to attract tourist and leisure travelers all year round.
Finally, Home2 Suites is a segment of the Hilton Worldwide brand. Holton’s 4,000 properties
span the globe and create unmatched brand recognition, economies of scale, and marketing
reach. Hilton’s Performance Advantage is intended to maximize each brand’s performance and
profit. Home2 Suites is supported with a 29 million-member frequent guest loyalty program.
Weaknesses
Michigan’s location and shape limit drive-through leisure traffic in which affects our numbers in
that market segment. Also, despite the fact that Michigan’s natural resources and recreation are
our biggest strengths, funding for many elements of the tourism product is inadequate. This
includes state and national parks as well as cultural and heritage locations. This will result in
limited activity maintenance and renovation as well as marketing potential. Although,
momentous progress has been made in the last few years post the recession, the tourism industry
is still fragmented, reducing its presence and lobbying power.
Opportunities
The main opportunity for Home2 Suites is the uprising popularity and attention that Grand
Rapids, Michigan is receiving as a tourist destination. Lonely Planet, the largest travel guide
book publisher in the world, ranked Grand Rapids as the number one U.S travel destination for
2014. Grand Rapids continues to evolve as a city that is being recognized as a destination that
caters to a wide range of visitor interests. This gives the hotel a huge opportunity to continue to
reach different markets and attract a variety of segments.
Threats
While the investment community is optimistic about the future of the hospitality industry, there
is still a global level of economic uncertainty preventing current travel. In addition, the excessive
and rapid tourism-related growth in the area can generate negative impacts for local people. For
instance, rising property prices, taxes, and congestion that can affect the millions of people who

call Michigan home. Moreover, climate variability and change can be a threat for our hotel.
Climate variability can negatively influence conditions at short notice and at any time of the
year. Michigan is home to many scheduled outdoor festivals and events in which attract a large
number of visitors that are dependent on climate for their success.
Furthermore, another threat for Home2 Suites in this area is its direct competition. Within its
competitive set, they have a list of hotel brands that compete with their same market segment and
market share. The rivalry for market share is stronger with those brands that have low differences
in product differentiation. While the direct competition is a great deal of threat itself, with Grand
Rapids tourism thriving and increasing, Home2 also needs to consider the threat of new entrants.
As competitors join the marketplace, this brand will be at risk of its current market share. In
order to manage the threat of the competitors the hotel must create and maintain competitive
advantage.

Goals, Objectives, and Strategies
Goal
To increase the hotel’s average daily rate
Objective
Increase ADR by three percent above the previous year’s level.
Strategies
 Train sales personnel with enough knowledge to support their case and make a sale.
 Highlight our unique features and how they differ from our competitive set.
 Increase review scores on social media outlets.
o Transactional data from Travelocity showed that a 1-point increase on a 5-point scale,
allows a hotel to increase its price while maintaining the same occupancy.
Goal
To reduce Check-in times; surveys found that check-in speed is one of the top five keys to
customer satisfaction.
Objective
To reduce check-in time by two minutes before year end.
Strategies
 Ensure that front desk agents have adequate training and knowledge of the system.
 Hand-held check-in terminals around our lobby to expedite check-in procedures to pre-
registered guests.
 Create a computerized reservation system that allows guests to check-in before they arrive.
 Have more front desk agents present during high volume times of the day or night.
 Pre-assign and pre-code room keys during an early morning or night shift.
 Develop a clear structure and code for front desk agents to follow in order to create a
consistent and efficient check-in process.
Goal
Guest Retention
Objective
To increase the number of repeat customers by six percent over the next ten years.
Strategies
 Get to know our guests on a person level so that we can personalize their stay; personal
engagement and relationships are essential.
 Create and implement a guest loyalty program with attainable rewards and product offerings.
 While incentives for new guests are usually implemented, expand special offers to existing
guests as well.
 Go beyond guest satisfaction and ensure guest delight—going above and beyond.

Marketing Strategies & Sales Plans

Marketing Strategies & Sales Plans
The following marketing strategies were chosen to advertise Home2 Suites and strategically
highlight the amenities and services provided at the hotel and its surrounding community.
Partnerships and packages all throughout the city of Grand Rapids will appeal to potential
customers of all ages looking to take advantage of the deals offered through these relationships.
This section highlights the additional ways Home2 Suites’ marketing team will reach out to
potential customers and how they will compare to their competition in the future.
Date Night for Couples
Grand Rapids, Michigan’s beautiful atmosphere is an unforgettable setting for a romantic
getaway. Home2 Suites would like to be the home away from home for couples and their
romantic getaway. Home2 Suites will offer a package deal for guests to experience the beautiful
surroundings of Grand Rapids. This package will include a day in Frederik Meijer Gardens &
Sculpture Park, followed by the option of three dinners with 10% off coupons at Founders
Brewing Company, Bistro Bella Vita, and the Green Wall. After a wonderful night at dinner, the
couples will return to Home2 Suites at their leisure and enjoy a complimentary bottle of
champagne in their room.
Frederik Meijer Gardens & Sculpture Park
Home2 Suites will feature a day package for guests including the must-see Caterpillar Room,
Kid-Sense Garden, 1880’s Farmhouse, and the Butterfly Maze. The Frederik Meijer Gardens &
Sculpture Park will appeal to a variety of guests including art lovers, plant enthusiasts and
families seeking new fun adventures. Home2 Suites will offer a package deal for guests
including shuttle rides to and from the gardens, along with picnic options available for the
guests. For this adventure, there will be a limited amount of seats, due to the seating in the
shuttle. Based on availability, Home2 Suites will pair with Meijer Gardens for their summer
concerts by offering guests tickets at discounted rates. The concerts featured at Meijer Gardens
Stadium will start June 3 and run until September 7 throughout the summer. Because of the
beautiful setting, Meijer Gardens is home to many weddings. Along with the garden tours and
summer concerts, Home2 Suites will feature a 20 % discount to all wedding parties booking 20
or more rooms.

Grand Rapids Public Museum
Home2 Suites will offer guests the exciting experience of the Grand Rapids Public Museum.
Grand Rapids Public Museum is filled with artifacts, ideas and stories to experience throughout
the exhibit. This exhibit will allow guests to experience the fun of Grand Rapids in a museum
filled with memories. Home2 Suites will offer the all experience package to the museum. The
All Experience package will include General Admission, Carousel Rides, Planetarium Shows,
and the Featured Exhibit. If purchased at the museum, the total cost will be $31 per person. If the
guests wish to purchase the package through the hotel with the discounted rate this will be $24
per person. If the guest does not wish to experience all of the exhibits, they must purchase
individual tickets from the museum.
Grand Rapids Symphony
Home2 Suites is pairing with one of Grand Rapids oldest attractions, the Grand Rapids
Symphony! Established in 1930, Grand Rapids and West Michigan determined creating a
symphony would strengthen the city and region. The orchestra performs ten concert series with
more than 400 performances each year, appealing to the imagination of all ages. Home2 Suites
have a choice of Classical Concerts, Pop Concerts, Family Concerts, SymphonicBoom, Great
Eras Concerts, and Picnic Pop Concerts, based on availability. Home2 Suites will feature tickets
for 10% off of the original ticket price. These tickets will be offered on a first come, first serve
basis.

John Ball Zoo
Home2 Suites will pair with the John Ball Zoo for fun, outdoor adventures for guests. John
Ball Zoo encourages guests to be active participants within the wildlife community. From
exciting animals to adventurous zip lining, John Ball Zoo offers a variety of experiences for
guests to enjoy. John Ball Zoo offers guests zip lining, sky trail rope courses, camel rides,
sting ray lagoon, a petting zoo and more! Home2 Suites will offer a shuttle for guests to the
zoo, along with a 10% discount on the general admission ticket price.
Great Lakes Pub Cruiser
Home2 Suites will pair with one of Grand Rapids most popular attractions. The Great Lake Pub
Cruiser. This cruiser is an entertainment based business providing a fun experience while
enhancing the fun. This is a 15-person party bike that is powered by pedals. Great Lake Pub
Cruiser allows for one stop at a restaurant during the tour for the guests. The guests may enjoy
alcoholic beverages during the restaurant stop and are permitted to bring food on board. This is
an exciting event for guests of all ages. The pub will take guests to the downtown area for two
hours. Home2 Suites will offer this event to guests occasionally throughout the summer at a
discounted rate of $23 per person.

While implementing new package deals through the surrounding attractions in Grand Rapids,
Michigan, Home2 Suites will reach out to prospective guests through various ways of sales.
Home2 Suites will provide a discount to all groups associated with the businesses in the package
deal. Home2 Suites will utilize social media to create a sales blitz to attract potential guests to the
hotel. This will attract guests by creating promotional advertisements on social media promoting
our special packages and deals associated with the hotel. Home2 Suites will use e-mail to send
returning and potential guests discounts and gifts, as incentive to stay at Home2 Suites. Home2
Suite’s will reach out to Fredrik Meijer Gardens & Sculptures to create a relationship to attract
the weddings, and group parties from the park to stay with at the hotel. Home2 Suite’s marketing
managers will reach out to the parties associated with Fredrik Meijer Gardens to ensure the
guests of Home2 Suites excellent service. Home2 Suites will also send scratch-off cards to all
prospective and returning guests. These cards will offer either three, five or ten percent off of a
regular priced hotel room, as an incentive to stay with Home2 Suites.
Competitive Nature
Home2 Suites features stylish suites created for a comfortable extended stay. These suites
include in-suite kitchen, paired with a pet friendly stay. Because of the location, Home2 Suites
appeals to leisure travelers. Home2 Suites offers a variety of free amenities for guests during
their stay. These amenities include an indoor pool, fitness center and complimentary breakfast.
Home2 Suites package deals will help set Home2 Suites apart from their competitors. These
package deals will attract a variety of leisure guests while creating long lasting memories.
Home2 Suites offers extended stay perks for all guests staying with Home2 Suites for seven or
more nights. These perks include a business center, the oasis center, a patio with a grill, an
outdoor lounge and walking trail, along with package deals listed above. Along with all of the
amenities offered, Home2 Suites will offer guests a shuttle for locations located nearby for guest
convenience. The comfortable ambience of Home2 Suites helps set it apart from hotel
competitors.

Occupancy Penetration
The table below displays the forecasted Occupancy from 2018 to 2022 at Home2 Suites
compared to its competitive set. The competitive set occupancy of 58.6% is calculated by taking
the average occupancy from 2009 to 2014 of its comp set data. Also displayed in the chart above
is the penetration rate for each of the years, which are all greater than 100.0%. This means that
Home2 Suites will do better than its competitors from 2018 to 2022 in terms of occupancy.
Figure 5.1
Competitive Set Occupancy 2018 2019 2020 2021 2022
58.60%
Home2 Suites 60.00% 61.80% 61.80% 61.80% 61.80%
Penetration Rate 102.40% 105.50% 105.50% 105.50% 105.50%
ADR Penetration
The table above displays the forecasted ADR from 2018 to 2022 at Home2 Suites compared to
its competitive set. The competitive set ADR of $70.73 is calculated by taking the average ADR
from 2009 to 2014 of its comp set data. Also displayed in the chart above is the penetration rate
for each of the years, which all well exceeds 100.0%. This means that Home2 Suites will do
much better than its competitors from 2018 to 2022 in terms of ADR. By the end year five, the
ADR is still increasing therefore the revenue of the hotel seems to be greater than its competitors
in years to come.
Figure 5.2
Competitive Set ADR 2018 2019 2020 2021 2022
$70.73
Home2 Suites $111.78 $115.14 $118.59 $122.15 $125.81
Penetration Rate 158.00% 162.80% 167.70% 172.70% 177.90%

Franchise Comparison

Franchise Comparison
Their motto is to experience Grand Rapids, and experience you shall. This city is obtaining all of
the awards from best beer town to being nominated as the #1 Travel Destination of 2014. With a
population of 192,285 people and growing, this city has been able to keep its small town values
and comforts. Grand Rapids is the second largest city in Michigan, with a total area of 45.27
square miles, of which, 44.40 square miles of it is land and 0.87 square miles is water. The city
and surrounding communities are economically diverse and partake in economies based in the
health care, information technology, automotive and aviation, consumer goods manufacturing,
only to list a few. Backing its #1 Travel Destination of 2014, Grand Rapids is well known for its
abundance of culture include marvelous museums, remarkable parks, city architecture, and
festivals for any occasion attracts the attention from all over the world.
Grand Rapids currently has a supply of 60 hotels ranging in scales and class which make up a
total of 5862 keys. According to the STR data report, since 2009 Occupancy percentages by the
year have only continued to increase with, as of the most recent data at the moment, reads
February as holding a 62% occupancy percentage and for the past year recording a 65.2%
occupancy percentage. Revenue is $156,689 above average and ADR measures $79.73.
Since Grand Rapids is proving to be quite a developing city, it would be a prime time to add a
reputable, innovative, and fresh new franchised hotel to the market. The criteria used to narrow
down the options for a hotel in Grand Rapids include the desire to attract certain markets,
specifically to attract those who have need for the space and those who admire a view of a
gorgeous lake instead of the commotion of the city. A hotel with about 100 rooms and a
concentration on making each and every suite to make the guests feel closer to home than ever.
Based on the criteria listed above, the two most fit franchise options were determined to be
Home2 Suites, a Hilton brand hotel, and the Wyndham Garden Hotel and Suites, a Wyndham
Worldwide brand hotel.
Background of Franchise Options
According to the STR data report, of the 60 hotels class range, there are more economy hotels
than any other class with 40% of the market. The second most popular class to inhabit Grand
Rapids is the Upper Midscale with 17 hotels equaling 28%. This leaves 32% of the market to
include luxury, midscale, upper upscale, and upscale. Buying a franchise is a complex
investment. Franchised hotels provide guests with a recognizable place to stay all over the world.
Franchised hotels provide less of a risk along with the help needed to open and run a hotel
efficiently. When estimating demand during the market analysis portion of the analytics, there is
a promising desire for more supply and outlook of increases in occupancy percentage, ADR, and
RevPAR. By adding another franchise hotel that would provide at least 100 more rooms to

Grand Rapid’s total available hotel rooms to equal about 5962 rooms. With such success with
Upper Midscale in the area it is supported that another hotel in the same class would also
succeed.
Wyndham Garden Hotel
Home2 Suites Hotel by Hilton
SelectedFranchise
After closely analyzing and researching the advantages and disadvantages of each Hotel, it was
decided that Home2 Suites is the better option for the area of Grand Rapids, Michigan. Home2
Suites by Hilton carries the recognizable and dependable name of Hilton Worldwide. It is a
compelling and breakthrough alternative to the mid-scale, extended-stay marketplace. It was
Home2 Suites Hotel is an innovative all-suite extended stay hotel
brand brought to you by Hilton Worldwide. Targeting savvy,
extended-stay guests. This Hilton Worldwide Portfolio concept
delivers unexpected style, flexibility, expanded spaces and passionate
service. Every hotel includes roomy suites with a kitchen &
refrigerator, free breakfast served daily and a customizable space to
work with amenities perfect for an extended stay. They also honor
Hilton HHonors loyalty program used to upgrade and help pay for
your stay.
When franchising The Hilton Worldwide parent company Regional
Training Managers work directly with our managed properties and
Hilton Management Services uses best-in-class Human Resources
systems which include:
 Employment Relations
 Collective Bargaining Agreements
 Recruiting
 Training
 Employment Law
Wyndham Garden Hotel is brought to the world by Wyndham Worldwide a
parent company of severalhotel chains, travel consolidators and time share
properties. All hotels are independently owned and operated excluding certain
hotels which are owned or managed by an affiliate of Wyndham Hotel Group.
Wyndham’s name carries prestige, their Garden Hotels are made with the
business traveler in mind. Every hotel provides inviting lobbies and cozy
library lounges for reading or socializing. They also contain flexible meeting
spaces that can accommodate a wide range of functions. The Wyndham
Garden Hotels accept Wyndham Rewards,which allow guests to redeem
points and free nights.
When opening a Wyndham Hotel Group's School of Hospitality Operations
(SoHO) is a leading hospitality educator focused on helping our properties
create exceptional experiences for their guests and employees. Professionally
led training opportunities include:
• Executive Leadership Orientation for owners and GMs
• Live webinars and videos
• Self-paced online course

clear that this brand would fit perfect into the Grand Rapid market due to the fact it is an Upper
Midscale hotel that is still affordable for a wide range of guests. This includes but, doesn’t limit
to families who may need the extra space, those needing a room for after a reception which can
be held at the famous Frederik Meijer Gardens (only 10 minutes away), and those who wish to
be near downtown but, not in the center of it with a beautiful view. We know that although the
prime location is in downtown area, that the area is already populated by enough hotels. Not
even 30 minutes away to the Downtown area, an unpopulated area is uninhabited by other hotels
and has a beautiful view of Reeds Lake. Home2 suites by Hilton will be the only Home2 suites
in the area, gaining the interest of those looking for more than just a hotel.
Fees
Figure 6.1
Franchise Options
Costs/Services Wyndham Garden Annualized Home2 Suites Annualized
Application Fee $10,000 $10,000 $50,000 $50,000
Initial/Start Up Fee $35,000 $35,000 $90,000 $90,000
Marketing Fee $73,878 $369,392 at own expense N/A
Service Fee $61,565 $307,827 $66,329 $331,646.40
Reservation Fee $1,165 $1,165 $832 $832
Royalty Fee $73,878 $36,981,640 $66,329 $37,939,277
Total $255,487 $37,705,024 $273,491 $38,411,755
Training no yes
The chart below indicates the estimated franchise fees as a percentage of total room’s revenue.
With rooms revenue to be projected at 2018 to be $18,658,306 total, the average franchise fee as
a percentage of total room’s revenue.
Figure 6.2
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2018 2019 2020 2021 2022
FranchiseFees
Marketing Fee Service Fee Royalty Fee

Projected Occupancy and Revenue
Based on data findings and results from completing the market analysis on Grand Rapids,
Michigan, we have been able to project the estimated occupancy and room revenues of the
operation based on the market segments.
As of current data, business and leisure travel are as represented on the pie chart below with
leisure making up a significant majority of it. Our market analysis and target market will
accommodate all the leisure, group, and business traveler but, will be more focused on the leisure
markets due to the fact we believe that the leisure market is who we will appeal to more and
controls most of the markets segmentation and due to the vastness of the total will therefore
result in more revenue.
Figure 6.3
We predict that leisure and business travel will in fact change to a more even statistic. As
business in Grand Rapids is steadily climbing, it makes sense that with more business to be done,
more travel into the city will be done as well. An estimated increase of about 6-9% will occur as
of 2018 when the hotel is to be opened.
19%
70%
11%
TravelMarket Segmentation
Business
Group
Leisure

Room Types and Rates
Our Competitive Market’s Average Rate per style of Room:
Comfort Inn 1 KingBed $84
Grand Rapids Airport KingSuite $114
Comfort SuitesS. 1 KingBed $129
Grand Rapids Airport KingSuite $199
1 KingBed $109
Clarion Inn& KingSuite $129
SuitesGrand Rapids 2 queen $129
Ramada Plaza 1 KingBed $129
Grand Rapids KingSuite $149
Country Inn & 1 KingBed N/A
SuitesGrand Rapids KingSuite $144
1 QueenBed
Suite $129
Holiday Inn Express 1 KingBed $118
Hotel & Suites KingSuite $182
Grand Rapids S. 2 QueenBed $118
By looking at the above information, we have agreed that in order to stay along the market of our
competitors that we need to price out our rooms accordingly.
Figure 6.4
Home2 Suites Grand Rapids Room Rates
Type of Room
Number of
Rooms
Rates
1 KING BED
STUDIO SUITE 50 $129
1 KING BED 1
BEDROOMSUITE 40 $169
2 QUEEN BEDS
STUDIO 60 $159
Total 150
The rates above are a very strong average and will vary as other rates do as well. They are higher
than the competitive sets, and will be for only a short amount of time. We project that because
we will be expecting a high volume of guests because it is a brand new hotel, that we will be able
to achieve these rates and keep the occupancy percentage high. They will eventually level out

and lower in order to closely compete with our competitive market. What will make us stand out
to our guests compared to the other hotels, is the type of suite hotel it is, with the chic new style
and roomy area that will win over our target market.
Figure 6.5
Room Rates by Market Segment
2018 2019 2020 2021 2022
Market
Business $160 $163 $165 $172 $173
Leisure $150 $152 $155 $160 $163
Group $142 $143 $146 $150 $152
Average $151 $153 $155 $161 $163
Projected Average Yearly Room Rates by Market Segment
The chart above displays the average forecasted room rates for the first 4 years of operation
based on each type of guests. These segments include guests traveling for leisure, business, and
group business with a calculated average in the last row. After analyzing the data in both the
STR competitive set, we were able to determine the following projected room rates. These room
rates were determined after evaluating current trends and accounting for the popularity of suites
in this period of time and applying that trend and others to the projected room rates. These rates
show a slow steady growth in the hotel, and we assume that the steady growth in the rates of the
Home2 Suites will cause the other hotels to possibly raise their prices as well.
Projected Occupancy Percentages
According to our forecasting with data retrieved from the STR Data Trends report, we have
measured a 4 month moving average that shows our occupancy percentage will increase at a
steady rate and in 2018 will be 62.2% (our first year of opening). We think that Home2 Suites
can and will have a higher occupancy but, as we projected the years to come; we found that the
increase will approximately and conservatively be about a .04% increase for the future years to
come. This increase is due to the fact after just entering the market in 2018, Home2 Suites will
gain more of the market as it becomes more familiar to those looking for a hotel in the area.
Figure 6.6
Forecasted Occupancy Percentage
2018 2019 2020 2021
62.2% 62.5% 66.5% 70.5%

Figure 6.7
Forecasted Room Revenue
Above is our forecasted room revenue using the STR data and 4 month moving average. You
will notice that the forecast does not predict big jumps in room revenue for our markets. These
numbers above do not include the projected rates and revenue we will get from those staying at
the hotel for example who are involved in a wedding party, or large convention. We predict that
with a venue as beautiful as Fredrick Meijer Gardens & Sculpture Park and the fact it is only
7 minutes away, we will in fact gain that sub-market and be able to retain it. Home2 Suites will
achieve higher revenue and it will be thanks to large percentages of leisure travel and even group
traveling.
2018 2019 2020 2021
$2,210,976 $2,599,030 $2,951,393 $3,039,935

Product & Service Descriptions

Product & Service Descriptions
The Products and services offered at the Home2 Suites in Grand Rapids, Michigan are carefully
catered to the guests experience and the image of upper midscale standards. Home2 Suites is a
rapidly growing hotel brand. With the change in traveling trends, today’s travelers are younger
and globally minded. Today’s travelers are looking for more modern, and high use of technology
in hotels. Home2 Suites, by Hilton, is an award-winning mid-tier, all-suite brand hotel that will
provide a safe environment and appeal to a variety of prospective guests.
Comparative Analysis of Current Lodging Supply Situation
Grand Rapids, Michigan experience is cultured and cosmopolitan, filled with fun, family friendly
experiences, both indoors and outdoors. According to Men’s Journal in April 2010, Grand
Rapids, Michigan was named “One of America’s coolest towns”. Grand Rapids offers the big
city life, with suburb outskirts to appeal to a variety of prospective guests. The Grand Rapids
area offers approximately 1,439 hotel rooms in the downtown Grand Rapids area. By adding the
Home2 Suites, Grand Rapids will see a .07% increase in the growth in supply. Home2 Suites, by
Hilton, will be located minutes from the downtown area and feature a beautiful view of Reeds
Lake. Along with its modern style, Home2 Suites location will appeal to the prospective guests
seeking the thrill of the downtown city life and those seeking the adventurous and beautiful
outdoors sight.
Figure 6.1
Economy
35%
Midscale
19%
Upper Midscale
31%
Upper Upscale
4%
Upscale
10%
Luxury
1%
PERCENT MIX BY CHAIN SCALE

Competitive Set Identification and Analysis
Within the Grand Rapids area there are many upper midscale hotels within the market segment
Home2 Suites will have to compete with. Among the hotel’s competitive set the Comfort Inn
Grand Rapids Airport, Comfort Suites South Grand Rapids, Holiday Inn Express Hotel & Suites
Grand Rapids South, and Country Inn & Suites Grand Rapids all fall directly into the
competitive set of Home2 Suites based on the location and the market segment.
Comfort Inn Grand Rapids Airport
107 Rooms
- Fitness Center
- Onsite Laundry for guests
- Pet Friendly, Smoke Free
- Free Airport Transportation,
- Free Wi-Fi, & Business Center
- Free Breakfast
- Outdoor Parking
Comfort Suites South Grand Rapids
76 Rooms
Holiday Inn Express Hotel & Suites
Grand Rapids South
79 Rooms
- Fitness Center
- Indoor Pool/ Indoor Waterpark
- Free Wi-Fi, Outdoor Parking
- Kids Eat Free
- Business Center
- Onsite Laundry for Guests
Country Inn & Suites Grand Rapids
60 Rooms
- Fitness Center
- Indoor Pool
- Free Wi-Fi, Outdoor Parking
- Free Breakfast
- Fitness Center
- Onsite Laundry for Guests
- Pet Friendly, Smoke Free
- Free Wi-Fi, Meeting Center
- Free Breakfast
- Indoor Pool
- Outdoor Parking

Comparative Analysis of Projected Services to Targeted Market Segments
Grand Rapids, Michigan is the second largest city in Michigan. With 1,439 hotel rooms within
the Grand Rapids area, above are just a few of the hotels that fall into this number as our
competitors. Grand Rapids is one of the Midwest’s most popular convention cities. Because of
this, Home2 Suites will have a variety of prospective guests including business and leisure
travelers. The target market for Home2 Suites will focus on leisure, business and groups.
Because of the demand for business space in the Grand Rapids area, Home2 Suites will have a
meeting space to accommodate the guests. Home2 Suites will cater to the demands of the leisure
guests with an indoor pool, complementary continental breakfast, a fitness center and free Wi-Fi.
For the business travelers, Home2 Suites will feature a meeting center with a printing and fax
station for guest use. Because Home2 Suites is located near the Fredrik Meijer Gardens, the hotel
can expect group bookings due to social events and weddings. Together, the leisure, business and
group travelers will be able to access the indoor pool and hot tub to help make their stay much
more memorable.

Operational Plans

Operational Plans
In a Home2 Suites hotel, the goal is for the guests to feel as comfortable as if they were walking
into their very own home. The stylish extended stay suites are excellent for business or leisure
and have ample amount of room. They also provide the perfect room layout with all the
necessities and amenities to stay a night, week or even a whole season. Their promise is to
always provide their guests with earth-conscious products and services they can feel good about.
Home2 Suites guarantee an engaging experience with clean and comfortable accommodations
along with an impeccable staff there for guest assistance.
Guest Suite Amenities
Home2 Suites in Grand Rapids Michigan will have 150 stylish suites for work or sleep. Each
suite will have bed sheets that are made from ultra-comfy microfiber that are both durable and
wrinkle-free. All suites will also have a queen-sized sleeper sofa that offers extra space for sleep
or just a place to sit and relax. The suites will also offer a spatial place to work, which includes a
functional and customizable space stretching the entire length of the room with extra shelving
and drawer space for personal storage. Additionally, all suites will also have a phone where guest
can make free local calls and calls for any type of service, a TV, and a digital alarm clock with a
MP3 output. Inside the closets there will be an extra comforter, an iron and ironing board, and a
hair dryer. All suites will also have their own private bathroom with towels and toiletries.
Housekeeping will be done every day to ensure guest with upmost cleanliness of the suites.

In-Suite Kitchen Amenities
Along with the basic amenities hotels offer, Home2 Suites will also offer a kitchen with a full
size energy efficient refrigerator, microwave, sink, and dishwasher. In addition, the kitchen will
also offer a toaster, microwavable cookware, and cooking utensils. Home2 Suites will also
provide six place settings in each suite to allow guests to entertain guests and conserve water by
running the water less frequently. The cooktops in the suites are induction burner cooktops and
there will also be accessories that are free to check out at the front desk.
Lobby and Property Amenities
Home2 Suites in Grand Rapids offers many benefits for guests that will guarantee guests an
enjoyable stay. Home2 Suites in Grand Rapids will be pet friendly hotel. Upon entering the
hotel, guests will be welcomed warmly by front desk ready to assist them with check-in or
answer any questions. To the left of the front desk there will be a Home2 MKT, which is an on-
site store where guests can pick up groceries and toiletries. To the right of the lobby area there
will be a business center with two computers, and a fax machine gear towards business travelers
who has some extra work to finish and a lounge area with a flat screen TV, and plenty of chairs
and couches for guest to relax and hang out. In this particular Home2 Suites there will be two
meeting rooms available for guests to reserve for different events from banquets to weddings.

Fitness and Recreation
The indoor pool and fitness room will both be located on the first floor with a beautiful view
outside. In the poolroom, there will be a saline, chemical-free pool and hot tub for hotel guests to
enjoy at their leisure. The fitness room, which is right next to the poolroom, is equipped with two
treadmills, two elliptical, free weights, and mats. The will also be two flat screen TVs in the
fitness room for guests to be entertained while exercising.
Dining
Home2 Suites will be offering free breakfast every day from 6:00 AM to 12:00 PM for all hotel
guests with over 400 possible breakfast combinations from cereals to sandwiches and much
more. The will also be juice and vitamin-enhanced flavored water offered and of course coffee
which will be offered 24/7. All food will be served on real china for less wastage. Any other
waste guests may have can be thrown in the Conserve2 Preserve recycling stations in the
breakfast area. In the dining area there will also be electric outlets available on the tables for
catching up on emails, charging devices, and or reading the news.

Management Organization

Management Organization
Home2 Suites Grand Rapids values its customer services highly for the success and growth of
the hotel, therefore the management team will consist of well-qualified trained experts that will
be able to guide their team well. The diagram below illustrates the breakdown of the different
department that help to operate the hotel at optimal performance.
General Manager
The general manager of Home2 Suites Grand Rapids plays a huge role in the day-to-day
management of the hotel and its staff members. When it comes to the general manager, he or she
must be well qualified for the position to ensure the upmost management at Home2 Suites. All
general managers must have over 10 years of experience in other hotel, shows excellent
communication skills, is a good team player, and have conflict resolution abilities just to name a
few. Some of the daily tasks the general manager of Home2 Suites include promoting and
marketing the business, managing the financials of the hotel, recruiting, training, and monitoring
staff, coming up with the work schedules of the staff members, dealing with customer complaints
and comment, and carrying out inspections of property and services. General Manager will also
work with the human resources manager for any payroll, firing and hiring staff, and anything that
has to do with the staff members.
Front Office Department
The front office department will have a front desk manager that oversees the entire front desk
staff. The front office department duty is to help guests check in and out, make reservations and
answer any questions the guests may have prior their stay, during their stay, and after their stay.
Therefore, the front desk staff must be well educated with all the amenities and services the hotel
has to offer to prevent any miscommunication with guests. All front desk employees must be
able to communicate very efficient because that ties right in with bringing guests to the hotel.
The front office department will act as the “Nerve Center” of a hotel from where all the
information and messages are communicated to the different department or personnel.

Housekeeping Department
The housekeeping department will work hard to keep the suites clean and stocked for guests. In
the housekeeping department, there will be supervisors that will ensure the rooms are clean to the
standards of Home2 Suites. The supervisors will also provide a daily work schedules to the
different staff members on the housekeeping team to ensure that all the tasks given within each
day are completed. It is the duty of the supervisors to make sure all tasks are completed. The
housekeeping department is also in charge of any laundry service the hotel provides as well.
Security Department
Home2 Suites values the safety of guests, as its top priority; therefore at this location there will
be a Security department. The role of the security department is to ensure guest and employee
safety and make sure the premises of the hotel are safe as well.
F&B Department
The food and beverage department will be responsible for maintaining high equality of food and
service, food costing, managing the restaurants/bars. The food department will help to run room
service and the Home2 MKT. The F&B department will also help to run all the events in meeting
rooms that involve food or drinks of any sort. The F&B department will have a direct interaction
with the guests at the hotel so they must be able to communicate well and work well under
pressure.
Engineering Department
The engineering department is responsible for the maintenance and the operations of all
machinery and equipment inside and outside the hotel. There will be a chief engineer that
oversees all the maintenance of property and he or she will train the other engineers. Some of the
duties of responsibilities of the engineering department include running heating, ventilation, and
air conditioning, plant and machinery, water supply, boilers and water heating, and lighting. The
engineering departments’ task is to not only fix any maintenance problems, but also plan
preventive maintenance so the likelihood of problems occurring are at bay.

Project Construction Costs

Project Construction Costs
1
1 10.1: City of Grand Rapids General Information AssessorsValuation
Section 2
1 1,395,800.00$
2 13,958.00$
3 17,447.50$
4 6,000.00$
5 4,000.00$
6 1,000.00$
Sub Total 1,438,205.50$
Land
Land Cost
Closing Costs
Brokerage Fees
Legal Fees
Survey
Historic Review
Section 1
1 1,000.00$
2 N/A
3 1,000.00$
4 2,000.00$
5 1,000.00$
6 15,000.00$
Sub Total $20,000.00
Market / Feasibility Study
Legal
Investigatory
Travel & Miscellaneous
Appraisals
Environmental Study
Transportation Study
Section 3
1 2,000.00$
2 6,000.00$
3 55,860.00$
4 172,400.00$
5 9,000.00$
6 1,000.00$
7 3,000.00$
8 1,200.00$
Sub Total 250,460.00$
Engineering Fees
Initial Costs
Travel & Miscellaneous
Soils
Architectual Fees
Use Permit
Model / Renderings
Ground Breaking Ceremony
Signage

Section 4
1 5,000.00$
2 10,000.00$
3 $ 221,100.00
4 10,000.00$
5 -$
6 8,000.00$
7 172,400.00$
8 241,360.00$
9 20,000.00$
10 10,000.00$
Sub Total 697,860.00$
Title Insurance
Intangibles
Accounting
Permit Expediter
Franchise Fee
Consulting Fee
Liquor License
Construction Financing-points
Permit Loan-points
Legal
Mobilization
Section 5
1 258,600.00$
2 20,000.00$
3 40,000.00$
Sub Total 318,600.00$
Construction Financing Fees
Interest
Taxes
Insurance
Section 7
1 301,700.00$
2 10,000.00$
3 150,850.00$
4 86,200.00$
5 64,650.00$
6 6,000.00$
Sub Total 619,400.00$
Civil Engineering Fees
Professional Fees - Construction
Architect's Fee
Reimbursables
Mechanical & Elecctrical Fees
Structural Engineering Fees
Landscape Architect Fees
Section 6
1 100,000.00$
2 3,000.00$
3 25,000.00$
Sub Total 128,000.00$
Project & Supervision Costs
Development Fee
Payroll
Travel (out of pocket)

2
3
2 10.2: Pitch Black Paving& SealingCo.
3 10.3: City of Grand Rapids Energy Dept. & Utility Dept.
Section 10
1 64,650.00$
2 10,000.00$
3 8,000.00$
4 1,500.00$
Sub Total 84,150.00$
Professional Fees
Interior Design
Kitchen Consultant
Misc. Out of Pocket
Laundry Design Consultant
Section 11
1 1,160,000.00$
2 25,000.00$
3 20,000.00$
4 25,000.00$
5 60,000.00$
6 240,000.00$
7 86,200.00$
8 1,293,000.00$
Sub Total 2,909,200.00$
Supplies
Other Costs
Furniture, Fixtures, & Equip.
Equip. Gen. Build. Systems
Operating Equipment
Pre-Opening
Working Capital
Contingency
Interest Reserve
Section 9
1 6,000.00$
2 3,000.00$
Sub Total 9,000.00$
Exterior Landscaping
Interior Landscaping
Land Improvements
Section 8
1 8,620,000.00$
2 61,550.00$
3 N/A
4 64,650.00$
5 Builder's Risk Insurance 25,000.00$
6 500.00$
7 372,400.00$
8 172,400.00$
9 1,000.00$
10 1,000.00$
Sub Total 9,318,500.00$
Construction Costs
General Contracting - Building
Parking
Demolition
Bond
Plan Review
Building Permit
Utility Tap Fees
Fire Marshal Review & Permit
Board of Health R&P
15,793,375.50$Project Total

Project Management Action Plan

Initial Investigation:
The initial step is to understand the Home2 Suites franchise. This step also involves making sure
all the financials are available to start the project proposal. (2 months)
Project Proposal:
In this step, a feasibility study is required to see if the location, market, financials are sufficient
enough to build the hotel. After the study is complete, the proposal will be presented to corporate
to see if the hotel is feasible to start up. (3 months)
Property Acquisition:
Acquiring and purchasing the land need to build the hotel on. (3 months)
Approval and Permits:
Receiving all the necessary approvals and permits with the Grand Rapids, Michigan area for the
construction of the hotel. (3 months)
Designing Phase:
This step involves reviewing the plans and design with an architect or designer then reviewing
these plans with a contractor. (5 months)
Bidding Phase:
In this step, several contractors will provide their bids for their cost to build the hotel. Among
these bids, the best contractor with proper permits and licenses and with the best cost in mind to
build the hotel will be selected to start the construction of the hotel.
(1 month)
Mobilization:
After the design of the hotel is complete, all the necessary resources and equipment for the
construction of the hotel will be assembled in this step. (1 month)
Construction of hotel:
After reviewing the plans, Home2 Suites will start its construction, but this step also includes
continuous inspection of the location and construction work to make sure all work is in
accordance with the franchise. (12 months)
LEED Certification:
Home2 Suites is huge on its sustainability therefore before the building process begins, the hotel
will need to apply for LEED certification and make sure our property complies with all the
current LEED certification standards. (1 month)

Hiring Executive Staff Members:
Hire upper level management and train them to make sure their standards are sufficient for
Home2 Suites. Educate them how to handle emergency, and safety problems that may occur and
train them effectively so they can teach those under and after them. (4 months)
FF&E:
Purchase all the furniture, lighting, fixtures and equipment for the hotel guest suites, lobby, pool,
business center, meeting rooms, fitness room, and kitchen such as the chairs, tables, and beds. (5
months)
Hiring Staff Members:
After hiring the executive staff members, next step is to hire staff members that will be working
under these executive board members. These people will help to train those under them. (3
months)
Write Up Policies and Procedures:
Write up all the policies and procedures that all the employees must follow. These procedures
should include what to do during daily operations and emergency situations.
(2 months)
Set up bank accounts and payroll:
Make sure all bank accounts are set up and payroll is set up so the employees will get paid
during training and after training. (2 months)
Purchase PMS systems:
Purchase and install PMS systems in the front desk. (1 month)
Buy Shuttle Vans:
Purchases all shuttle vans necessary to efficiently run the shuttle service of the hotel. (2
months)
Apply for CDL:
Make sure that all shuttle drivers have a CDL (Certified Drivers Licenses) to drive the vehicles.
(1 month)
Set up the Telecommunications:
Look into local Internet and phone companies and set up Internet, telephone, fax, and any other
types of telecommunication needed at the hotel. (2 months)
Purchase Linens:
Purchase all linen for rooms and housekeeping needs such as sheets, pillowcases, and towels. (1
month)

Purchase Employee Uniforms:
After hiring and training the staff, purchase the necessary uniforms needed to maintain the image
of Home2 suites include shirts, pants, nametags, hats, and any other items that are needed. (2
months)
Sales and Marketing:
Come up with a sale and marketing strategy for the hotel that will gain an upper edge to its
competitors. This step also involve creating the hotel website and any other means of social
media to show off the hotel to the public. (5 months)
Advertise to the Local Community:
Identify any local companies that are willing to help advertise our property to their guests and
employees. Purchase and print any flyers, brochures to put in these locations to help advertise
our hotel. During this time, the employees should be actively participating in advertising the
hotel. (3 months)
Purchases room keys and daily operation supplies:
Purchase the room keys and daily operation supplies such as paper, pens, clipboards, and any
other materials that are needed for day-to-day operation at the hotel. (2 months)
Purchase F&B:
Purchase the food and beverages needed for the free breakfast the hotel offers and the food and
beverages offered at the Home2 Market. This should be done just a few days before grand
opening so the food doesn’t spoil.
Pre-Opening:
Make sure all hotel operations run smoothly and double check all functions of the hotel to make
sure all tasks are completed. Have a pre-opening party to celebrate the work that has been done
and get ready for grand opening. (1month)
Grand Opening:
This is the time to showcase all the work that has been done and show the public why Home2
Suites is the place to stay above all the other competitors. Make sure this event is heavily
advertised to the public with promotions during the first few months of operations. (3 month)

Months 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
TASKS
Initial Investigation X X
Project Proposal X X X
Property Acquisition X X X
Approval and Permits X X X
Designing Phase X X X X X
Bidding Phase X
Mobilization X
Building Construction X X X X X X X X X X X X
LEED Certification X
Hiring Executive Staff Members X X X X
FF&E X X X X X
Hiring Staff Members X X X
Write Up Policies and Procedures X X
Set up bank accounts and payroll X X
Purchase PMS systems X
Buy Shuttle Vans X X
Apply for CDL X
Purchase Linens X
Purchase employee uniforms X X
Sales and Marketing X X X X X
Advertise to the Local
Community X X X
Purchases daily operation
supplies X X
Set up the telecommunications X
Purchase F&B X
Pre-Opening X
Grand Opening X X X

Sustainable Approaches

Sustainable Approaches
Gas-Powered Absorption Heat Pumps: Air Control
With all industrial activities, tourism contributes to atmospheric pollution. Hotel boilers emit
atmospheric pollutants, such as particles, carbon dioxide, sulfur dioxide, carbon monoxide, and
nitrogen oxides. Furthermore, indoor air pollution is a typical feature of hotels. Many sources
contribute to the deterioration of air quality inside hotels. Pollutants range from mere bad odors
to toxic hazards, and include kitchen smells, sewer emissions, allergens, and volatile organic
compounds found in cleaning agents. In addition, legionnaire’s disease comes from bacteria in
which thrives in cooling towers and the cooling tower mist can be then be re-entrained into the
HVAC system.
Integrating high-efficiency, gas-powered absorption heat pumps, it is guaranteed up to a 40%
reduction in annual operating heating costs and up to 40% less carbon dioxide emissions
compared to the best condensing boilers. This idea is the most economically convenient solution
to increase a building’s energy classification because it will allow a rise in energy class, with a
resulting increase in the value of the property. As seen in the example chart below, hotels will
see a payback in just 3.5 years.
Figure 12.1
Sustainable Approach in Action
Problem High CO2 emissions due to hotel's heating system
Measure Installation of an eco-energetic heating system
Investment N/A
Payback 3.5 years
Environmental Impact Reduction in CO2 of 430 tons/year (avg. 2.7 tons / year / room)
Water Management Plan
Hotels consume water on a domestic basis as well as for processes. Water is used throughout
bathrooms, laundry rooms, swimming pools, outside grounds, kitchens, and also housekeeping.
Prior to setting a water management plan we must have set measurements and targets that will
not compromise quality, health, or safety. Some water conservation measures that will be
employed include fixture retrofits, towel and linen reuse programs, plumping system
improvements, and use of recycled/rain water for process and irrigation use.

Water accounts for 10% of utility bills in many hotels. Most hotels pay for the water they
consume twice—first by purchasing fresh water and then by disposing of it as waste water.
Depending upon the level of water efficiency, we can reduce the amount of water consumed per
guest per night by up to 50% compared with establishments with poor performances in water
consumption.
Figure 12.2
Average Water Consumption
The above chart displays the average annual water consumption in hotels according to area for
Michigan’s Climate.
Waste to Energy
Waste generated by hotels includes waste from construction and refurbishment, consumables,
durable goods, food and beverage wastes, hazardous materials, and recyclable oil.
Approximately 54 percent of a hotel’s solid waste can either be recycled or reused. There are a
variety of strategies used throughout hotels in order to reduce, reuse, and recycle wastes. We
would like to implement a waste-to-energy processing service, where wastes are processed into
alternative energy sources such as natural gas or biodiesel fuel and sold back to hotels at a
reduced price.
It is estimated that 46 percent of a hotel’s solid waste is food waste. Since all food waste can be
composted, we will compost all waste so that it can be used as organic fertilizer; this is a better
use of organic materials than trucking them to landfills. It is reported that an average hotel
produces in excess of one kilogram of waste per guest day. In this program of waste-to-energy,
an average hotel can save $6,000 annually by recycling 22 tons of materials. An energy study
conducted found that each ton of food waste can reduce enough energy to provide electricity to
power 10 average sized homes for one day. These practices will be very successful and they
have been justified by their future cost reductions and increasing occupancy rates.
Area M3 %
Guest Rooms 18,088 34
F&B Incl. Kitchens 11,704 22
Lockers / Public Toilets 10,640 20
Laundry 9,044 17
HVAC 532 1
Steam Generation 2,128 4
Pool 1,064 2
Temperate

Figure 12.3
Waste Management
The above images show how recycling is a sustainable approach to waste management and how
integrated systems will aid in the transformation of waste-to-energy.

Ozone Laundry System
The Ozone Laundry System helps reduce hotel’s operational costs by 40 percent. The Home2
Suites by Hilton will feature the new laundry device. The hotel is expected to run about twenty
loads per day on average, for a total of 1,600 pounds per day. The Ozone System’s key step in its
use is determining the appropriate cycle configurations. These configurations are designed based
on the type of linen being laundered. The Ozone cycle uses two fewer steps with the removal of
an extract and combining detergents and bleaching into one step. Each step in the Ozone System
allows for twenty two fewer gallons of water to be used and 11 minutes less in overall time. This
would help to save on labor and conserve water as well, all while using less time. Below shows
an image demonstrating the difference between traditional versus Ozone cycles and the total
savings.
Figure 12.4
Laundering Cycles: Traditional vs. Ozone

Figure # on the next page will show the Traditional and Ozone formulas projecting the uses in
each for one month of use. The bottom prices project the cost of the first month and year while
using the Ozone Laundry System versus Traditional. Overall, the Ozone system will result in an
annual cost savings overall.
Figure 12.5
Cycle Comparisons
Solar Power
Hotels are energy-intensive. Using cleaner and cheaper energy sources will help reduce
operational cost and increase competitiveness and sustainability. Home2 Suites will feature solar
powered energy. According to the US Federal Government’s Energy Star Program, US hotels
spend an average of $2,196 per room a year on energy. This requires a large amount of burning
fossil fuels, along with causing a significant expenditure. Because Home2 Suites is a new
building it will feature passive solar design called SunPower solar power system. This will allow
for the Home2 Suites to be designed to collect, store and distribute solar energy. This system will
feature a 25-year manufacturers’ guarantee and a working life of over 40 years. Because
Michigan is not too far north, it is an ideal location for solar powering.

The passive solar design will feature interest-free loans and tax rebates to cut the costs
dramatically. Home2 Suites can claim up to 40% of the start-up costs. With about 100 SF of
shade-free rooftop space, this can provide up to 4 kWh of solar power per day on average.
Home2 Suites will feature solar panels installed on the roof, this will consume most of the
rooftop.
Smart Energy
In a survey conducted in 2007 by the Element extended-stay brand of Westin Hotels found that
59% of guests admit to falling short of their “green routine” during their stay in hotels. The
survey surveyed 75% of guests expect fresh sheets and towels daily, while 63% are more likely
to leave a light on while absent from the room. After conducting the survey, guests stated many
fall from their green routine because they “don’t have to pay for it like at home”. Utility costs
represent a significant portion of the hotel’s operating costs. Water heating, lighting and
conditioning can represent up to 80% of the hotel’s bills. By following smart energy saving,
Home2 Suites can expect to save ab out 10% of the energy costs daily. The 10% reduction in
energy costs is equivalent to increasing ADR by 2.6%. By not increasing the ADR, Home2
Suites could increase occupancy rates by 4.3%. Home2 Suites will feature office equipment
verified by Energy Star. This will include using flat-panel LCD computer monitors which
consume 90% less energy than traditional monitors. The printers and copiers will be set to sleep
mode at all times when not in use. Home2 Suites will use recycled paper whenever possible. For
the hotel pool and spa, this will be covered over night when the pool and spa is not in use. This
will help reduce water heating costs. For lighting, Home2 Suites will have efficient lamps,
luminaires and controls to save money and improve lighting in the hotel. In guest rooms, the
hotel will have incandescent lamps and fixtures with high-efficiency compact fluorescent lamps.
In the lobby, Home2 Suites will install efficient T8 and T5 fluorescents. By installing light
controls, Home2 Suites can avoid lighting spaces that are not in use. Home2 Suites will feature
the Energy Star Smart Energy plan to conserve energy and go green.

Financial Statements

Financial Statements
Overview
This financial analysis needed to assess the feasibility of the proposed 100-room Home2 Suites
in Grand Rapids, Michigan is for the initial 6 years of operation. The construction cost for this
property will be $15,793,375.50 with a $158,000 cost per key. After completing a linear
regression analysis of historic ADR trends to estimate expected ADR growth, the ADR of this
hotel increased by approximately 3% each year. The total revenue of this property gathered from
room revenue the first year is $2,210,976 with a steady increase the following five years.
Average Daily Rate
The ADR for the projected Home2 Suites is just higher than the ADR from the STR report. The
ADR is higher due to the fact that the market in Grand Rapids, Michigan is a very struggling
market; however, it is slowly seeing a turn for the better. As mentioned in the overview, we
approximate that a steady increase of about 3% each year will occur from 2018 to 2023. Shown
below is a table and graph to further prove this statement. After dividing total rooms sales by the
number of rooms (100), the forecasted ADR is increasing for this particular Home2 Suites
location.
Figure 13.1
$110.00
$115.00
$120.00
$125.00
$130.00
$135.00
2017 2018 2019 2020 2021 2022 2023 2024
ADR
2018 2019 2020 2021 2022 2023
111.78$ 115.14$ 118.59$ 122.15$ 125.81$ 129.59$

Occupancy Percentage
The Occupancy percentage, using the percentages from the markets in the competitive set, falls
consistently near 60% across all projected years. Although not a substantial increase, the
Occupancy percentage does rise to about 61.8%. However, unfortunately the increase does not
continue to rise but instead plateaus just above 60%.
Figure 13.2
58
59
60
61
62
63
64
65
2017 2018 2019 2020 2021 2022 2023 2024
Occupancy Percentage
2018 2019 2020 2021 2022 2023
60.0% 61.8% 61.8% 61.8% 61.8% 61.8%

RevPAR
Revenue per Available Room is a crucial component of hotel operations because it is almost
100% of all money being generated for this property. With the results gathered from the
projections of ADR and Occupancy percentage, we were able to project RevPAR for the
following years. The RevPAR in the first year is drastically low due to the fact that the hotel is
new in the market and has yet to acquire its’ market share. The hotel has entered a very
struggling market and it will also be rather difficult to acquire a market at all. Given the
information we found, although RevPAR consistently increases by a significant amount, it is still
extremely minimal.
Figure 13.3
$66.00
$68.00
$70.00
$72.00
$74.00
$76.00
$78.00
$80.00
$82.00
2017 2018 2019 2020 2021 2022 2023 2024
RevPAR
2018 2019 2020 2021 2022 2023
67.12$ 71.21$ 73.34$ 75.54$ 77.81$ 80.14$

Total Revenue
Our data from total revenue comes directly and completely comes from the total room revenue,
as the complimentary breakfast does not offer any revenue and there are no further food and
beverage services. The graph below shows the projected room revenue that will be received in
the first 6 years of operations. Overall our trend shows an increase in revenue as the hotel
becomes more prominent in the market.
Figure 13.4
Net Operating Income
The graph below displays the proposed Home2 Suites Net Operating Income. When operating
this property, it is expected to have a NOI that gradually increases after the first year. This
number takes into account all income collected from operations with the deduction of all
expenses incurred from operations—management fees and fixed expenses. As expected after the
first year, the net operating income climbs significantly higher with a projection of
$1,396,366.00 by 2023.
Figure 13.5
$1,500,000.00
$1,900,000.00
$2,300,000.00
$2,700,000.00
$3,100,000.00
$3,500,000.00
$3,900,000.00
0 1 2 3 4 5 6 7
Total Rooms Revenue
2018 2019 2020 2021 2022 2023
2,210,976.00$ 2,599,030.00$ 2,951,393.00$ 3,039,935.00$ 3,131,133.00$ 3,225,067.00$
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
$1,400,000.00
0 1 2 3 4 5 6 7
Net Operating Income
2018 2019 2020 2021 2022 2023
2018 2019 2020 2021 2022 2023
658,766.00$ 1,044,456.00$ 1,277,873.00$ 1,316,209.00$ 1,355,696.00$ 1,396,366.00$

Conclusion
While all numbers in this financial analysis are only projections, these projections show the
feasibility of the proposed 100-room Home2 Suites in Grand Rapids, Michigan for the initial 6
years of operation. After careful research and analysis, building a Home2 Suites in this location
with the current stressed market is not feasible.
While growth is evident, it is still minimal. In this case, the Grand Rapids market ADR’s are too
low to support the costs associated with new construction. To increase the IRR, the cost per key
for this property must be lower to around $12,000 per key. Given the projected numbers for this
property, the cost per key is $158,000—too high to compete with our competitors. Given that
occupancies are falling right above 60%, it is evident that the market cannot handle new
inventory.
However, if an investor still wanted to go through with this property, the funding gap is not
astronomically high. In other words, if alternative funds are gathered, the property may become
feasible. For instance, if the city municipal will make an exception and lower the current
property taxes, there is potential for success. Furthermore, if contractors are willing to lower
building costs through sustainable options, the current construction costs may decrease enough to
make the property feasible.
Conclusively, it would be in an investor’s best interest not to go further with the Home2 Suites in
Grand Rapids, Michigan due to the foreseen impractical numbers. From the information gathered
after this analysis and to systematically mitigate the risk of any potential loss, we can suggest
that given the low occupancy percentages and low average daily rates it may be wise to purchase
an existing property. There may be several hotels in this market desperate to sell, giving the
opportunity to potentially buy at a bargain price. When an existing hotel is purchased, the value
of the location and the market can be quantified by reviewing the track record for the hotel and
many varied external factors that could cause the current market trends to shift upward.
Purchasing an existing property in this market will be purchasing a property with potential
performance; in other words, these properties are distressed and may need re-evaluating
assistance to guide their success.

Conclusion

Feasibility Study

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