the limited number of short-term rental units in Mequon at 32 bedrooms, we have chosen to apply the North Milwaukee submarket from CoStar data to the short-term rental market, as well.
During the course of our research and analysis, which included discussions with representatives from major hotel brands and local individuals knowledgeable about the hotel market, we did not identify any hotels currently proposed for development in Mequon.
Based on the foregoing, the adjacent table provides a summary of the estimated historical and projected operating performance for the Mequon lodging market, which is comprised of the three traditional hotels with 136 rooms and the 10 short-term rentals with 32 bedrooms. We have assumed that no new supply will be added to the Mequon lodging market, therefore the occupancy is projected to stabilize at 52.0 percent. Furthermore, we have assumed that the average daily rate will increase at the rate of inflation, or by 3.0 percent.
Next, in accordance with our proposal, we reviewed the allowed uses of the local lodging tax. As demonstrated in the adjacent graphic, the state of Wisconsin law allows municipalities to impose a local lodging tax but requires that at least 70 percent be
| Historical and Projected Operating Performance of the Mequon Lodging Market | ||||
| Year | Annual Occupancy | Average Daily Rate | RevPAR | Rooms Revenue |
|---|---|---|---|---|
| Historical Performance | ||||
| 2023 | 52.0% | 90.00 | 46.80 | 2,869,776 |
| 2024 | 50.0% | 87.00 | 43.50 | 2,667,420 |
| 2025 | 52.0% | 86.00 | 44.72 | 2,742,230 |
| CAGR(1) | 0.0% | (2.2%) | (2.2%) | (2.2%) |
| Projected Performance | ||||
| 2026 | 52.0% | 89.00 | 46.00 | 2,824,497 |
| 2027 | 52.0% | 91.00 | 47.00 | 2,909,232 |
| 2028 | 52.0% | 94.00 | 49.00 | 2,996,509 |
| 2029 | 52.0% | 97.00 | 50.00 | 3,086,404 |
| 2030 | 52.0% | 100.00 | 52.00 | 3,178,997 |
| 2031 | 52.0% | 103.00 | 53.00 | 3,274,367 |
| 2032 | 52.0% | 106.00 | 55.12 | 3,372,598 |
| 2033 | 52.0% | 109.00 | 56.68 | 3,473,775 |
| 2034 | 52.0% | 112.00 | 58.24 | 3,577,989 |
| 2035 | 52.0% | 115.00 | 59.80 | 3,685,328 |
| CAGR(1) | 0.0% | 3.0% | 3.0% | 3.0% |
Note:(1) Compound Annual Growth Rate.
Source: CoStar; compiled by REVPAR International, Inc.
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