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Metropolitan Atlanta Overview
With a population of nearly 5.5 million, the 28-county Atlanta-Sandy Springs-Marietta metropolitan statistical area (Atlanta MSA) is the ninth largest in the United States. It serves as a center of commerce, finance, culture and transportation for the Southeast.
The economy of the MSA is dominated by the trade and services sectors, withal relatively minor contribution from manufacturing. Total nonagricultural employment for the Atlanta MSA contracted at a compound annual rate of 1.0 percent over the past five years, caused primarily by a precipitous drop in 2009. July 2010 was the first month to show positive growth in employment (as compared to the same month in the prior year) since April 2008. The growth of 1.3 and 1.5 percent were Critical to the metropolitan area’s positioning is an extensive transportation network, including the world’s busiest and one of its largest airports. Over 95 million passengers were served in 2012. experienced in 2011 and 2012, respectively.
Critical to the metropolitan area’s positioning is an extensive transportation network, including the world’s busiest and one of its largest airports. Over 95 million passengers were served in 2012.
Site and Neighborhood Evaluation
Duluth is located approximately 23 miles northeast of downtown Atlanta. It had a 2010 population of 26,600.
The City of Duluth has identified four potential hotel sites in the downtown area.
Downtown Duluth is relatively vibrant, with numerous shops, restaurants, and businesses lining Main Street. Revitalization of the downtown area is being approached in phases. The first two included development of the town green followed by construction of a new 44,000-square foot city hall and pedestrian improvements around Church Cemetery. The third phase of revitalization is to encompass The Block, a 3.3-acre parcel including the former city hall and warehouse space. It is to be redeveloped into a restaurant district with eight to ten outlets and perhaps a salon or spa. Completion of The Block by the end of 2015 is a critical assumption to our analysis.
There are no hotels within the Duluth city limits at present. Thus, given the pioneering nature of the subject, we recommend pursuing development of a relatively small (approximately 100 units) select-service hotel with a strong, high-quality brand with broad appeal to business travelers and leisure guests alike and which will help drive demand through its reservation system. This combination of size, orientation and branding will help minimize project costs and the financial risks of the project. Amenities prototypical of the brand selected should be provided with perhaps an expanded complement of meeting space, say 1,500 to 2,000 square feet. Some select-service brands require the inclusion of a restaurant. For purposes of analysis, we have assumed such a property would offer a restaurant leased to and operated by a third party.
Again because of the subject’s pioneering nature, we believe it is critical to its success to be distinguished from the competitors via design elements and support amenities. There are clear synergies resulting from the presence of several hotels at a given location. A single hotel is therefore challenged to gain adequate market exposure, absent a unique location or physical characteristics.
For purposes of this analysis, we have assumed a January 1, 2015, opening date.