City Council

6. PRESENTATION REGARDING THE CITY OF ALHAMBRA’S DRAFT HOTEL MARKET\nAND FEASIBILITY STUDY – F2M26-25\nThe City of Alhambra commissioned HVS to conduct a hotel market and feasibility analysis\nto evaluate the City’s ability to attract a new hotel that would serve both residents and\nvisitors. HVS inspected the market area and multiple potential sites and analyzed the hotel\nmarket conditions in Alhambra and the surrounding areas. From a demand perspective,\nHVS found that the most likely profile for new hotel development in Alhambra will be an\nupper-midscale (such as Holiday Inn, Hampton Inn, and Best Western Plus) or upscale\nlimited-service hotel (such as DoubleTree, Wyndham, and Hilton Garden Inn), given the\ngap in current supply and the potential market clientele’s ideal price points. Key\nconsiderations for hotel development include ease of access, proximity to major freeways,\nand adjacency to established commercial corridors. However, from a financial perspective,\nbased on HVS analysis of a potential upper-midscale hotel, a new hotel is not financially\nfeasible under current assumptions where development costs (land acquisition,\npermitting, and construction) are projected to be higher than hotel revenue. Feasibility can\nbe achieved with an incentivized structure, such as reduced land cost or other forms of\nmonetary support. The feasibility gap can also be mitigated if complementary uses, such\nas retail or residential, are developed alongside the hotel and are able to share\ninfrastructure and development costs. Because current market conditions do not make a\nhotel developer feasible, this effort will be reprioritized until market conditions change.\nStaff will continue to monitor market conditions and re-engage with the hotel development\ncommunity should anything change.\nRecommended Action: City Council receive and file this report.