Oregon Health and Science University
Review of assumptions
Review of NOI ratio
Assessment of feasibility of proforma
Best practices analysis
Strategy and guidance regarding OHSU’s involvement in the project
Johnson Consulting was retained to provide independent advice as the University considered becoming an equity partner in the acquisition and renovation of an existing hotel on campus. We provided a review of the hotel in terms of rooms and meeting space, operating projections prepared by a potential hotel developer, reasonableness of assumptions relating to occupancy, average daily rate (ADR), and net operating income (NOI).
Our comprehensive analysis was specifically tailored to answering the following questions: How many room nights do the University and Clinic currently generate? Would the hotel enhance this situation? If so, by what amount? What effects, positive or negative, could the presence of a hotel, as proposed, have on enhancing the clinical enterprise’s positioning and bottom line? Are there broader University factors that should be part of the decision-making equation? Does the hotel need an incentive to be successful? If the University were to provide a room night guarantee, what is the probability that it could be called to perform on that guarantee and what is the materiality of that provision? How much of a room night guarantee could the University provide without significant risk? Are there other tools that could be used to advance the hotel, if strategic to the Clinic and University, that may provide equal or more value, but with less exposure?