Initial Opinion Report for Development of the Planned Resort
THE EVERGLADES ECOLODGE
at
BIG CYPRESS
on the Big Cypress Seminole Reservation in
Western Broward County, Florida
December 2006
Brush & Company
Lodging Industry Consultants
16410 SouthWest 77th Court
Miami, Florida 33157-3765
Tel 305-253-7415 Fax 305-251-2108
www.Brush-and-Company.com
Associated with
Cayuga Hospitality Advisors
An International Network of Executives
Counseling the Hotel, Resort, Club,
Casino & Foodservice Industries Firm information
December 1, 2006
Brush & Company Lodging Industry Consultants
16410 SouthWest 77th Court
Miami, Florida 33157-3765
Tel 305-253 -7415 Fax 305 -251 -2108
ScottBrush@Brush-and-Company.com
Mr. C. Wendell Collins
Founder/Chief Executive Officer
EcoExperience Development, Inc.
102 Mako Lane
Jupiter, FL 33477
Re: Initial Opinion: Proposed Sustainable Tourism
Development on the Big Cypress Reservation
Dear Mr. Collins:
In accordance with our earlier discussions, this Initial Opinion report is presented to provide a synopsis of our review of the materials you have submitted with respect to your planned ecotourism development on the Seminole Big Cypress reservation in western Broward County. This Opinion Report outlines our initial opinions concerning the lodging facility based on the information provided and our years of experience in the hospitality industry however no fieldwork has been performed specifically for this assignment.
As in all studies of this type, the developer’s estimated results are based upon competent and efficient management of the property and presume no significant change in the lodging industry from that outlined. There will usually be differences between estimated and actual results because events and circumstances do not occur as expected, and those differences may be material.
Despite the slight (-0. 1%) downturn in the first half of 2006, the record number of visitors to Florida in 2005 (85.8 million generating $62 billion in sales) up 5.2 percent from 2004’s (former record) level of 79.7 million visitors ($57 billion in sales) and up 23.4% from 2001’s 69.5 million ($48.6 billion in sales), reinforces the consensus that the recovery of the overall lodging/tourism industries from both political and weather-related events from an occupancy standpoint continues and that 2006 could be another record year in Florida tourism. This picture should be tempered with the fact that additional events (such as the number of hurricanes in the late summer and early fall of both 2004 and 2005 or the rapidly rising/falling gas prices of 2006) might affect the continuing economic improvement and this consultant is not obligated, or qualified, to predict future political, economic or social trends emanating from recent events or those which may or may not occur as a result.
The scope of our preliminary reveiw does not include the possible impact of zoning, environmental regulation, licensing requirements or other governmental/tribal matters, which may be material. The conclusions and recommendations contained in this report are preliminary and based upon our present knowledge and information with respect to economic and demographic data, demand sources and the status of the competitive lodging market as of late 2006. The information provided by the developer is assumed to be correct although we cannot guarantee its accuracy.
We would be pleased to hear from you if we can be of further assistance in the interpretation and application of our findings and conclusions. If you have questions, please do not hesitate to call.
Very Truly Yours,
EVERGLADES ECOLODGE PAGE 3 DECEMBER 4, 2006
Brush & Company
THE EVERGLADES ECOLODGE
AT
BIG CYPRESS
Summary Opinion
It is our opinion that the lodging operation described in this report, to be located on the Big Cypress reservation just off Interstate 75 will be able, due both to the hotel’s pla nned facilities and location as well as the tourism orientation of the State of Florida, the southeastern Gold Coast and Broward County, to draw a substantial market demand segment.
This will allow the hotel to operate at an occupancy and rate level that should represent a successful facility, one that is able to cover its debt service and provide a return to ownership.
The Developer ’s Vision
As outlined to us, the developer plans to both construct and operate ecologically oriented unique eco-lodge facilities – targeting leisure ecotourism which is defined as tourism carried out in an ecologically sound manner and both environmentally sensitive and economically sustainable for the long term. The first hotel planned is to be built on a ground lease covering approximately 15-acres on the Big Cypress Seminole reservation within the Everglades in western Broward County location and targeted specifically towards the outdoor, nature and cultural based adventure and environmentally-sensitive recreation and heritage/native tourism markets.
The Florida Everglades Resort at Big Cypress , will be a limited service eco- lodge complex, designed and operated within the overall theme and providing an outdoor recreation, nature based program within educational and environmentally sound parameters.
The Lodge facilities will be built using traditional Florida "cracker-style” architecture, creating a unique, attractive, peaceful and relaxing atmosphere. The most current environmental building technologies will be incorporated into the design to maximize efficiency and minimize negative environmental impact.
The Lodge will have visitor lodging facilities that are comprised of 124 units. These fall into three basic categories:
- The Welcome Center/Ecolodge will function as the gateway to the EcoResort, the area where visitors are given an introduction to EcoExperience. The Welcome Center will include a registration desk, orientation program area, gift shop and snack facilities, interactive exhibits, van/bus pick- up stops and other hospitality and educational services. At the Welcome Center area visitors will register, receive a complete orientation and interact with educational exhibits.
- The EcoExperience Lodge Service-Spa and Conference Facility. The main facility will be themed with both for the natural and cultural heritage of the region -- the wilderness and "cracker" architecture prevalent from the 18th through 20th centuries and give excellent views of the surrounding wilderness. The main EcoExperience facility will include limited food and beverage facilities, virtual reality facilities for individuals and groups, reading room, gathering areas, meeting and program rooms, gift shop, craft concessions, wildlife viewing, other hospitality services.
- Three EcoExperience Exploration Station Activity Areas. Teaching/meeting areas, called EcoExperience Exploration Stations will be scattered throughout the property. Some will require wired electricity and water for specific activities but most will take advantage of solar powered lighting and other environmentally sound technologies. The areas will be roofed, serving as covered picnic areas when not used in programming and also serve the retreat/ conference activities.
- An EcoExperience Education Center and Research Institute. This center and associated institute will be a joint venture with an educational institute. The program will be designed to attract researchers and college classes from around the world, these facilities will be used in conjunction with the dorm-style facilities to provide an ideal setting for ongoing research and short or seasonal college experiences. Data from the baseline and ongoing research studies at each EcoExperience site and surrounding habitats would be maintained. Partnership agreements for program or research activities with nearby or well known universities may be beneficial to both EcoExperience and the academic partner.
The developer believes that the ecotourism market is large, growing, under-developed and under served (especially in South Florida). The combination of these factors creates an attractive financial opportunity for EcoExperience. According to the World Travel Organization, the global nature-based ecotourism market is estimated at $423 billion. It has experienced annual growth rates of 20-30% from 1996 to 2006).
"In addition, according to a Lou Harris poll for Travel and Leisure Magazine, the growth is being driven by two factors: an overall increase in tourism coupled with a shift away from traditional luxury hotels as travelers seek places they have never seen before - locations with natural beauty and opportunities to learn and gain new perspectives"
Within the United States almost $40 billion was spent on "non-consumptive, wildlife-related recreation" in 2001. A U.S. Travel Data Center survey revealed that 30% of travelers intend to take an ecotourism trip within the next three years. These market size indicators are further supported by several facts:
- One segment of ecotourism, bird watching, was the specific intent of 24 million American travelers in 2003 (U.S. Department of Interior). The 2003 -2005 National Recreation Survey shows that bird watching has become one of the fastest growing recreational activities in the US, ahead of such activities as hiking and
skiing;
- Yellowstone and the Grand Canyon each attract between 3-4 million visitors per year. These are magnificent attractions. However, they are single attraction locations, inconveniently located and have seasonal limitations;
- Direct nature-based tourism expenditures in Hawaii exceeded $400 million in 2003; and
- Roughly 50% of all international tourists entering the U.S. were classified as "nature tourists" with 20- 40% specifically interested in wildlife.
- In 2005 the Big Cypress attracted over 650,000 visitors to the area
Florida serves over 80 million tourists annually, with 15% originating in foreign countries. Ecotourists currently account for approximately 5% of the total . . . or about 2 million ecotourists per year. They spend an estimated $200- $300 per day. This translates into a current total market value of $400-$600 million.
This "eco" market, while large, is both underdeveloped and underexploited, especially in Florida and other areas of the United States. Support includes:
- There are no ecolodge chains in the United States focused on providing ecotourism, nature based, outdoor recreational programs and experiences. Ecotourists must either search for the few facilities that exist, stay in standard hotel/motel not convenient to the outdoor recreational and ecoexperience, or stay in campgrounds, State and National Parks;
- Florida, with an abundance of high potential Nature Based/Ecotourism sites, a favorable year round climate, an excellent travel infrastructure, a large tourist base, and a large local population base, has only two quasi -nature based lodges (one on the northwest coast and the other in the National Park area in the
Everglades); and
- Traditional eco-tourists are special interests groups, such as bird watchers and adventure and outdoor sportsmen, who actively search for sites and will be inconvenienced in order to gain the desi red nature experience. A much broader potential market exists. However, the "eco curious", "eco aware" and educationally oriented market segments remain largely undeveloped due to the lack of facilities that enable a convenient and holistic nature experi ence and heritage coupled with the absence of sophisticated marketing programs to build awareness. These factors represent a tremendous twofold opportunity to better serving the existing outdoor recreational and expanding the total market by offering a 3-4 star facility.
EcoExperience Inc.'s facilities and programs will be uniquely positioned to capitalize upon the market opportunity . . . combining the convenience and luxury of a 3-star ecolodge with a true ecoexperience tailored to a broad range of interests.
"In a world increasingly bored with theme parks, Florida must stress its other assets" according to travel writer Herb Hiller. In a September 1997 report by the Florida Governor's Ecotourism - Heritage Tourism Advisory Committee, Florida committed itself to the development of ecotourism. A stated goal in this report is to "market Florida as a unique ecotourism and heritage tourism destination." The report emphasizes that the development and promotion of Florida's natural, coastal, historical, cultural and commercial aspects will give visitors more options, and encourage longer stays and repeat business. EcoExperience, Inc.'s president, C. Wendall Collins, served on the committee that produced this report and Arthur Hertz, its Chief Executive Officer serves as a representative on the state's Tourism Board. The Florida Everglades Resort at Big Cypress epitomizes these "'options" represented by unique programming and natural attractions.
The Company plans to target several family and group markets with its campaign, including:
- General leisure market
- Nature/recreation (specialized adventure/leisure) market
- Special interest market focused on wildlife, botany, ancient cultures, etc.
- Other specific markets, including day visitors, corporate and other group retreats and meetings
Area Overview
The proposed hotel’s location in the western reaches of Broward County places it in the center of southeast Florida’s "Gold Coast” comprising Palm Beach, Broward and Miami-Dade counties.
In general, the Broward County market area, as well as the State of Florida as a whole, has seen significant growth over the past few years and the economic and demographic indicators point to that growth continuing into the foreseeable future throughout the South Florida regional market area. It should be noted that all economic and demographic statistics are built on historical numbers and that the complete recovery from the effects of the September 11th tragedy and its aftermath have not yet been fully realized. Therefore, actual future events and circumstances may be significantly different from those highlighted here.
South Florida is a market of over four million people, one of the largest in the country. Centered between Miami-Dade and Palm Beach counties, Broward is within a one hour drive time from two major metropolitan areas in addition to the Fort Lauderdale market area; Miami to the south and West Palm Beach to the north, while three major international airports (Miami, Fort Lauderdale-Hollywood and Palm Beach) are within approximately one hour of the subject hotel site just off Interstate 75. By automobile the site is also about an hour from the fast growing southwestern Florida coastal area of Naples directly west via Interstate 75.
Population: The Fort Lauderdale MSA, which includes all of Broward County, was expected to reach a population level of 1.676 million in 2004 according to 1999 estimates by the University of Florida’s Bureau of Economic and Business Research. However, the county’s estimated population reached 1.698 million by the end of 2003, rose to 1.793 million in 2005 and is one of the nation’ s fastest growing metropolitan areas. The county population increased almost 30 percent from 1990 through 2000, representing a compound annual growth rate of 2.9 percent. According to Broward County’s Planning Services Division, the county’s population is expected to grow to 1.956 million in 2010 and to over 2.5 million by 2030, a compound annual growth rate of approximately 1.8 percent compared to 1.4 percent for the State of Florida and .9 percent for the United States. At the same time, the county’s population is becoming more international as a portion of Miami- Dade’s international inflow migrates
northward.
Income: South Florida offers a high quality of life, and accordingly is attractive to people desiring to improve their lifestyle. Because of the influx of labor, south Florida wages tend to be lower than in many areas of the country and given the number of retirees with lessened income potential, average household income which increased from $31,839 in 1991 to over $46,000 in 2000 represented only a 2.9 percent annual increase versus 4 percent nationally. Per capita personal income in Broward County increased to $26,973 by 2004 and is expected to reach $29,009 by 2009 according to the University of Florida.
Employment: Employment in Broward County (as of December 2004) totals over 873,000, a 4.6 percent increase (38,310 jobs) since December 2003, above both the state and national growth percentages. Growth in jobs is expected to continue at a rate near or above the state and well above the nation according to the University of Florida. In 2005, employment had increased to 904,066, up 3.6 percent (and over 31,000 jobs) from 2004.
- Unemployment in the county has declined to 2.3 percent in April 2006, a 20 percent improvement from April 200 5’s 2.8 percent. Approximately 40 percent of the workforce is employed in the Services category, a reflection of the area’s successful growth in the tourism industry although only one of the top 10 largest private employers is tourism oriented.
- One of the most important engines of growth in the market is the transportation infrastructure including: trains, major highways (Interstates 95, 75, 595, Florida’s Turnpike, and the Sawgrass Expressway), locally important arteries (U.S. Route 1, State Road A1A), the seaport (Port Everglades) and air transportation through the Fort Lauderdale-Hollywood International Airport which has an annual $2.3 billion annual economic contribution and is the county’s largest employer with over 10,000 directly employed and another 21,000 jobs through ancillary services. The following paragraphs provide additional information regarding the economy’s transportation sector which is important to the continued success of an upscale, full-service independent hotel in the downtown market.
- Enplanements and deplanements exceeded 20 million people for the first time in calendar year 2004 at FLL, a 16.1 percent increase over 2003's (former) record level and 2005 saw a further 7.5% increase to over 22 million. The first ten months of 2006 have seen a decline from the same period in 2005 but the airport is still in line to accommodate more than 20 million passengers for the full year.
A major ($1.4 billion) renovation and enlargement project is underway at the airport and targeted for completion in 2012. The projects in total will double the number of terminal gates (the new Terminal 1 opened in May 2001), adding three parking garages and enlarge a runway that will allow substantial increases in passenger counts well into the next century (previous estimates indicated that passenger totals are expected to reach 25 million by the year 2015).
- The entry channel to Port Everglades is one of the shortest, straightest and safest harbor entrances of any major port in the world linking sea lanes with the deepest Atlantic harbor south of Norfolk Virginia. With docks only 1,000 yards from a railway loading facility and direct road links to Interstates 75, 95 and 595 as well as the Turnpike, the 2,190 acre port handled a record 25 million ton of goods in 2004. Second only to Miami in cruise passengers (over 4 million embarkations and debarkations in 2004 as shown in the following table), Port Everglades has about 45 cruise ships ported here at least part of the year and recent announcements indicate a number of new ships will be added over the next several years.
Tourism remains the area’s biggest business with a record 10.1 million visitors to Broward County in 2005 (up 7.8 percent from the previous year) and almost $8.6 billion in tourism expenditures and over $36 million in Tourism Tax revenues. Included in the overall county total number of visitors, the 600,000 square foot Broward County Convention Center on its 17-acre site on the 17th Street Causeway at the north end of Port Everglades hosted 442 meetings and conventions last year generating over 737,600 room nights and a total of almost $985 million in convention delegate expenditures.
Lodging Market
Based on statistics published by the research division of the Greater Fort Lauderdale Convention & Visitors bureau, overnight visitors to Broward County totaled 10.1 million in 2005 (the county’s first time over 10 million) up 7.8 percent over 2004’s 9.4 million which itself was up 5.6 percent from 2003. The estimates indicate that despite the two hurricanes in the second half of the year, 2005 was a record year for visitation to Broward County as shown in the following table:
Broward County’s over 10 million visitors in 2005 spent almost $8.6 billion in direct expenditures in the county, a daily average of over $146 per person and an average expenditure per trip of $715 during the 4.9 night median length of stay.
The county’s Tourist Tax Collections (the "Bed Tax” has seen double digit growth in both 2004 and 2005 as average rates climb out of the no/little growth period subsequent to 9/11. This double digit growth has continued into the first half of 2006 despite the statewide drop in the number of visitors and the downturn in the number of air passengers at Fort Lauderdale/Hollywood Internation al Airport which has seen a decline in traffic in eight of the last nine months.
Market Supply
According to the Broward County Revenue Collection Division, there were (at the end of 2005) 565 lodging facilities with a total of roundly 33,4 00 rentable units in the entire county. This includes 9 new or rehabilitated "branded” properties with just over 1,500 rooms in the two-year period from 2004 to the end of 2005. Th e number of properties is down from a high of 620 in both 1999 and 1996 while the number of available rooms hasn’t change significantly from 2002’s total of 33,242 rooms indicating little growth in the supply side of the industry but replacement of a number of older, smaller properties with larger, more modern facilities. According to Smith Travel Research (STR) there are 919 rooms under construction in the market as of September 2006 with another 6,848 in planning and 1,353 in the pre-planning process.
EXPERIENCE AND QUALIFICATIONS
SCOTT W. BRUSH, ISHC
Education
Durham University - Durham, England
Master of Science in Management Studies,
December 1975
Cornell University - Ithaca, New York
Bachelor of Science in Hotel Administration,
June 1970
Professional History
Brush and Company 1993 to Present
Established Brush and Company to provide professional advisory services to the hospitality industry with more senior executive involvement than is possible in a larger organization. Affiliated with International Society of Hospitality Consultants and Cayuga Hospitality Advisors which provides substantial back- up when appropriate and ongoing resources as needed.
Florida International University 2004 to Present
Adjunct lecturer in the School of Hospitality and Tourism Management . Annually instruct a graduate seminar course entitled Asset Management in the Hospitality Industry in the Spring semester. Developed a distance learning version of the same course beginning in Fall 2005.
Nova-Southeastern University 1989 to 1995
Adjunct professor (part- time) in the International Centre for Tourism and Hospitality Management , a program aimed at the working professional already in the industry. Developed the four course accounting sequence and instructed the upper level courses: Managerial Accounting and Financial Management.
PKF Consulting 1992 to 1993
One of ten founding directors of this full-service consulting firm formed from the Management Advisory Services division of Pannell Kerr Forster, CPA's. Headed the Miami regional office with responsibility for consulting and appraisal services throughout Florida, the Caribbean and Latin America.
Pannell Kerr Forster 1978 to 1992
Joined Harris, Kerr, Forster & Company as a consul tant in April 1978. Elected Senior Principal at Pannell Kerr Forster in June 1985 and selected to head the Miami Management Advisory Services (MAS) division in January 1989. Assignments have included general consulting on land purchase, management and franchise contracts, reorganization, layout and design as well as the more traditional market studies, operational reviews and appraisals and almost every other aspect of the hotel and resort industry.
Ramada Inns, Inc. 1976 to 1978
General Manager of the San Francisco International Airport l ocation, supervised a complete renovation of the full service, mid- market hotel while maintaining an 80% occupancy level and surpassing the profit budget. Transferred to the Ramada Inn, Colorado Springs.
Navy Resale System 1976
After completion of the Master's program at Durham University in England, accepted a temporary position as Assistant Food and Beverage Manager at the NAS Alameda complex. Primarily responsible for the impl ementation of new training programs and food service concepts at this multi- location base.
Navy Resale System Office 1972 to 1974
Held the position of "Specialist" in the Personalized Services Branch of this non- appropriated fund government organization. Responsible for all phases of devel opment and operation of a chain of 44 limited service hotels. Supervised the complete renovation of two properties in Japan and set up labor contracts for their operation. Also responsible for the compilation of the group’s first Manual of Operating Procedures for the on-base Navy Lodges.
Ramada Inns, Inc. 1970 to 1972
After a short training period, became relief general manager for managers on vacation or terminated at seven properties. Assisted in the pre- opening personnel selection, training and opening of full service, mid-market hotels in five locations.
Memberships/Activities/Publications
Developing a Hotel Business Plan: A How -To -Manual; Cornell Hotel & Restaurant Administration Quarterly; June 1993
Asset Managers Playing New Role in Hotels: South Florida Business Journal; February, 1994
Lies, Damned Lies . . . . . . and Statistics: Guest Editorial; Cornell Hotel & Restaurant Administration Quarterly , February 1994
The Caribbean Market ; Hotel & Resort Industry ; June 1987
Rethinking Your Business Plan; Hotel & Resort Industry, July 1994
Hotel Owners & Developers Find Money is Plentiful: Hospitality Highlights, Third Quarter 1997
Renovation, Refurbishment or Redevelopment: Is the Difference More than Semantics? ; Lodging Hospitality; April 1998
International Society of Hospitality Consultants - membership number 047
Cayuga Hospitality Advisors - Assistant Regional Director, Florida
Cornell Hotel Society - national organization and South Florida chapter
Academy of Travel and Tourism - Advisory Committee Treasurer - 1991 to 1999
Society of Nova Hospitality Professionals - Associate Lifetime Member
