Terminal 2 Linked Hotel Development Opportunity Presentation

25eea58c72b1f8a76a40003e222e748f?s=47 Gillian Gore
January 09, 2017

Terminal 2 Linked Hotel Development Opportunity Presentation

Terminal 2 Linked Hotel Development Opportunity Presentation

25eea58c72b1f8a76a40003e222e748f?s=128

Gillian Gore

January 09, 2017
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Transcript

  1. 2.

    Presentation Overview 1. Our Team 2. Project Overview 3. Dublin

    Airport 4. Irish & Dublin Hotel Markets 5. Terminal Linked Hotels 6. Dublin Hotel Transactions & Supply Pipeline 7. The Terminal 2 Linked Hotel 8. Process
  2. 3.

    Our Team Aaron Spring Senior Surveyor Tom Barrett Director /

    Head of Hotels Ireland Savills Dublin Airport Andrew Sherry Associate Director Development Land Aaron Spring Senior Surveyor Hotels & Leisure Aaron Spring Senior Surveyor John Brennan General Manager Commercial Ruth Scallon Head of Commercial Concession Lisa Jordan Terminal 2 Hotel Project Coordinator
  3. 4.

    Project Overview A Unique Opportunity to Develop, Internationally Brand and

    Operate a Terminal Linked Hotel at the Fastest Growing Major Airport in Europe • Ready to go 0.33ha (0.81 acre) site • Less than 100m from Terminal 2 • Planning for 22,840 sq m 11 storey hotel • 402 Bedrooms, 27 sq m average size • Significant F&B opportunities and extensive meeting room capacity • 2015 RevPAR grew by 27% in Dublin Airport Area Hotels & STR forecast 20% growth for Dublin in 2016 The Best Hotel Development Site in Ireland
  4. 5.
  5. 6.
  6. 12.

    Dublin Airport - Passenger Traffic Growth 5 10 15 20

    25 30 Passengers (millions) Pax (millions) Linear (Pax (millions))
  7. 14.

    Dublin Airport - Long Haul Passenger Growth .0 .5 1.0

    1.5 2.0 2.5 3.0 3.5 4.0 2010 2011 2012 2013 2014 2015 2016 Est Millions
  8. 15.

    Dublin Airport - Connecting Passenger Growth 0.0 0.2 0.4 0.6

    0.8 1.0 1.2 1.4 2011 2012 2013 2014 2015 2016 Est Millions
  9. 16.

    Dublin Airport Growth • Dublin Airport has planning permission to

    build a 3,110m runway, 1.6k north of the existing main runway • Construction is scheduled to start in Q2 2017 and the Runway will be fully operational by 2020 • In 2015, a record 25 million passengers used Dublin Airport. Passenger numbers continue to grow strongly in 2016 with double digit growth recorded this year • Dublin Airport is the fastest growing airport in Europe
  10. 18.
  11. 21.

    Dublin Airport Central • Work commenced in 2015 to create

    a business campus • Newly refurbished ONE Dublin Airport Central fully let to ESB International • daa are in the process of developing the first phase of this with a planning application for 4 buildings totalling circa 42,000 m2 • Vibrant business community • Virtual Dublin Airport Central “Chamber of Commerce” • Dedicated tenant focused property team • Join over 200 vibrant businesses at Dublin Airport Central
  12. 23.

    Overseas Trips to Ireland by Area of Residence 2008 to

    2016(F) 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 (F)* No. of Trips (000s) Other Areas USA and Canada Other Europe Great Britain Source: CSO * If +12% +12%
  13. 24.

    Dublin Hotel Performance 2007 to 2018(F) 0% 10% 20% 30%

    40% 50% 60% 70% 80% 90% 100% €0 €20 €40 €60 €80 €100 €120 €140 €160 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (f) 2017 (f) 2018 (f) Occupancy ADR ADR Occupancy
  14. 25.

    Dublin Hotel Performance – 2015 by Area 75% 78% 81%

    84% 87% 90% €0 €50 €100 €150 €200 €250 Dublin Luxury South City Docklands North City Dublin 4 Airport Surroundings Arr RevPAR Occ % Source: STR
  15. 26.

    Dublin Airport Area Hotels – Monthly Performance Trend 0% 10%

    20% 30% 40% 50% 60% 70% 80% 90% 100% 0 30 60 90 120 J 14 F 14 M 14 A 14 M 14 J 14 J 14 A 14 S 14 O 14 N 14 D 14 J 15 F 15 M15 A 15 M 15 J 15 J 15 A 15 S 15 O 15 N 15 D 15 J 16 F 16 M 16 A 16 M 16 J 16 J 16 A 16 S 16 ADR RevPAR OCC
  16. 28.

    Terminal Linked Hotels – The Advantages • Physically connected airport

    hotels generally achieve higher Occ % and ADR than off site competitors1 • Used as a hub for corporate meetings where people fly in from different locations2 • Convenient location for short same day business trips and meetings2 • No commute - time insulated from bad weather and delays2 • Unique ability to capture day use from international travellers and short haul air crew2 • F&B can compete with airport outlets from non-hotel guests2 • Research shows guests prefer to stay at connected terminal hotels and are willing to pay a premium to do so3 1 “Airport Hotels – Laying the Foundation for a synergistic Relationship” – Summer 2015, Boston Hospitality Review 2 “RevPAR Penetration at Airport Terminal Hotels” – April 2008 HVS 3 “Results Soar at hotels connected to Airports” – April 2013 Hotel News Now (STR)
  17. 29.

    European Terminal Linked Hotels v Airport Area Hotels Hotel Brands

    • Crowne Plaza • Hilton • Park Inn • Radisson • Sheraton Airports • Amsterdam • Brussels • Copenhagen • London STN • Manchester • Milan • Stockholm Source: STR
  18. 30.

    Performance of European Terminal Linked Hotels v Airport Area Hotels

    Source: STR Occupancy % 50% 60% 70% 80% 90% 2010 2011 2012 2013 2014 2015 2016 Aug YTD Terminal Linked Hotels Occ % Airport Area Hotels Occ %
  19. 31.

    Performance of European Terminal Linked Hotels v Airport Area Hotels

    ADR (€) Source: STR €60 €70 €80 €90 €100 €110 €120 €130 €140 2010 2011 2012 2013 2014 2015 2016 Aug YTD Terminal Linked Hotels ADR Airport Area Hotels ADR Euro
  20. 32.

    Performance of European Terminal Linked Hotels v Airport Area Hotels

    RevPAR (€) Source: STR €0 €20 €40 €60 €80 €100 €120 2010 2011 2012 2013 2014 2015 2016 Aug YTD Terminal Linked Hotels RevPAR Airport Area Hotels RevPAR Euro
  21. 34.

    Source: Savills 2016 Dublin Hotel Transactions •O’Connell Street, Dublin 1

    •323 Bedrooms •4 Star •Significant Capital Expenditure required •c.€285k per room The Gresham Hotel c. €92m •Burlington Road, Dublin 4 •502 bedrooms •4 Star •Rebranding to Clayton •c.€360k per room Doubletree (Burlington) c. €180m •IFSC, Dublin 1 •169 bedrooms •4 Star •c.€400k+ per room The Spencer Hotel •Fleet Street, Dublin 2 •129 bedrooms •4 Star •c.€400k+ per room The Morgan Hotel •Sandyford, Dublin 18 •88 bedrooms •4 Star •c.€225k+ per room The Beacon Hotel c.€150m
  22. 35.

    Dublin Hotel Supply – Very Limited Bedroom Pipeline Source AM:PM

    Opened 2016 342 1,144* 383* Due 2017 Due 2018 AM:PM (October 2016) Room Pipeline by Date Confirmed 4,313 2,499 1,486* Speculative On Hold AM:PM (October 2016) Room Pipeline by Status Dublin five openings since 2007: • Gibson Hotel (2010) • Marker Hotel (2013) • The Dean (2014) • Temple Bar Inn (2015) • Holiday Inn Express (2016) Dublin needs as many as 30 new hotels (5,000 bedrooms) between now and 2020 Source: ITIC (2014) *Excludes impact of Clyde Court closure January 2016 (185 bedrooms) and expected closure of Ballsbridge Hotel in 2018 (400 bedrooms).
  23. 36.

    2016 to 2018 Bedroom Pipeline - Estimate 1,500 Additional Bedrooms

    Source: Savills -600 -400 -200 0 200 400 600 800 Dublin 1 Dublin 2 Dublin 4 Dublin 6 Dublin 8 Dublin 22 Dublin Airport New Rooms 2016 New Rooms 2017 New Rooms 2018
  24. 37.

    Dublin Airport Area Hotels Map Hotel Name KM to Airport

    Star Bedrooms Terminal 2 Linked Hotel Terminal 4 402 1 Maldron Hotel Dublin Airport 0.4 4 251 2 Radisson Blu Hotel Dublin Airport 0.5 4 229 3 Carlton Hotel Dublin Airport 1.7 4 100 4 Travelodge Dublin Airport North Swords 3.7 3 130 5 Premier Inn Dublin Airport 3.1 3 155 6 Clayton Hotel Dublin Airport 4.6 4 469 7 Holiday Inn Express Dublin Airport 3.3 3 114 8 Crowne Plaza Dublin Airport 3.3 4 204 9 Metro Hotel Dublin Airport 5.1 3 88 10 Hilton Dublin Airport 7.1 4 166
  25. 39.
  26. 40.

    Dublin Airport - Terminal 2 Linked Hotel Advantages • Significant

    scale (402 bedrooms & meeting rooms) = impressive profit margins • Easy to find, great transport links and extensive car parking • High profile location, with very strong physical presence • Significant volume of passing traffic & footfall • Captive audience • Branding opportunity
  27. 44.

    Second Floor • Concourse • Hotel entrance • Lobby /

    reception • Bar • Restaurant All on the same level as the link to Terminal 2 arrivals level and car park pedestrian entrance
  28. 45.

    Typical Bedroom Floor (3rd to 8th) • Floors 3 to

    8 • 51 bedrooms per floor • Average size 27 sq m
  29. 46.

    Typical Bedroom Floor (9th & 10th) • 45 bedrooms /

    3 suites • Average suite size 42 sq m
  30. 47.

    Terminal 2 Linked Hotel - Operating Potential • 2015 Dublin

    Airport Area Hotels RevPAR = €81 • 2016 RevPAR forecast +20% = €96 (September YTD = €98.77) • Terminal Linked Hotels Average Performance Premium v Airport Area Hotels in the 6 years to December 2015 = 41% • “IF” Terminal 2 Hotel had RevPAR of €125 = Room Revenue of €18m • “IF” Room Revenue = 70% of mix, then Total Revenue = €26m • “IF” Profit Margin of 40% = Profit of €10.5m
  31. 49.

    Indicative Process & Timeline October 2016 June 2017 October 2017

    March 2019 Contract Construction Complete Dec 2016 – Jan 2017 RFT RFI PIN Feb - May 2017 * Subject to Change
  32. 50.

    FBOT Considerations Could Include Duration Prior Experience Legal Structure Construction

    Consortium Members Covenant Rent Revenue & Project Projections Hotel Brand Hotel Operation Funding Planning Deadline Price Equity
  33. 51.

    Q & A DISCLAIMER Savills Ireland and the Vendor/Lessor give

    note that the particulars and information contained in this brochure do not form any part of any offer or contract and are for guidance only. The particulars, descriptions, dimensions, references to condition, permissions or licences for use or occupation, access and any other details, such as prices, rents or any other outgoings are for guidance only and are subject to change. Maps and plans are not to scale and measurements are approximate. Whilst care has been taken in the preparation of this brochure intending purchasers, Lessees or any third party should not rely on particulars and information contained in this brochure as statements of fact but must satisfy themselves as to the accuracy of details given to them. Neither Savills Ireland nor any of its employees have any authority to make or give any representation or warranty (express or implied) in relation to the property and neither Savills Ireland nor any of its employees nor the vendor or lessor shall be liable for any loss suffered by an intending purchaser/Lessees or any third party arising from the particulars or information contained in this brochure. Prices quoted are exclusive of VAT (unless otherwise stated) and all negotiations are conducted on the basis that the purchasers/lessees shall be liable for any VAT arising on the transaction. This brochure is issued by Savills Ireland on the understanding that any negotiations relating to the property are conducted through it.