Signs of the Times - October 2012 - (Page 93)

The Value of Signs Value Place invests heavily in EMCs By Jeff Rexhausen This month, on October 10-11, the National Signage Research & Education Conference (NSREC) will be held at the Kingsgate Marriott, on the University of Cincinnati campus. This column represents a small portion of a comprehensive research study that UC completed this summer. Other details from this “economic value of signs” study will also be presented as part of the program. The research was fully funded by the Signage Foundation Inc. (SFI),which also sponsors and organizes NSREC. SFI will continue to add to the body of research through the development of additional case studies conducted annually. Jeff Rexhausen was the principal researcher for this project, assisted by Chris Auffrey, UC School of Planning and Hank Hildebrandt, UC School of Architecture. Jeff’s title is Associate Director of Research, Economics Center, University of Cincinnati. Value Place is U.S. largest economy, extended-stay the franchise in the Founded in 2002 by entrepreneur Jack DeBoer (who also founded Residence Inns) in Wichita, KS, Value Place opened its 100th location in 2008 and its 175th in 2010. Its properties, all of which were newly constructed, are designed to combine hotel convenience with apartment essentials. Facilities average 120 suites. Its business model strives to appeal to small- and mid-sized-business owners and families who are relocating to a new community. Location criteria include interstate visibility, or at least a location along a primary, arterial route; a middleto moderate-income area, and a strong population density within a five-mile radius. The company has specific signage standards. Requirements include at least one wall sign with its logo, and a pole sign that includes its logo and pricing information. An LED-lit, electronic message center (EMC) is greatly preferred, but not an absolute requirement. Approximately 73% of the properties have EMCs, while 26% have readerboards in which copy is presented with plastic numerals. Only 1% doesn’t have pricing information. Properties with EMCs enjoyed a 2010 occupancy rate an average of 11.2% higher than breakeven, while those with readerboards averaged 9.5% above this threshold. All properties benefited from EMCs, but primarily, EMCs provided the most advantage to those properties with the biggest challenges. We divided all properties into four quartiles, based on occupancy rates. In the top three quartiles, properties with an EMC had occupancy rates 1-2% higher than their readerboard counterparts. However, in the bottom quartile, EMC properties had 10% higher occupancy rates than readerboard entities. The data suggests, for some properties, the EMC made the difference between profitability and loss. At one Value Place location, where local officials prohibited any pricing data on the property’s sign, occupancy rates were so low that it was, at best, breaking even. After an extended period of discussions and negotiation, the company reached a compromise with local officials that provided a multi-tenant sign in which Value Place, the lead tenant in the development, could post its pricing. The new sign was erected in 2010, nearly three years after the property had opened. The first nine months after the new sign’s installation, the property enjoyed an average occupancy rate 19% higher than the same nine-month period of the prior two years. The property has now become consistently profitable, even in traditionally slower months. It’s now projected to generate an additional $30,000 annually in hotel tax revenue. To help assess this turnaround, the company provided actual data on weekly rates. Only negligible changes to the rates occurred, so the rates themselves weren’t a contributing factor. ■ SIGNS OF THE TIMES / OCTOBER 2012 / www.signweb.com 93 http://www.signweb.com

Table of Contents for the Digital Edition of Signs of the Times - October 2012

Sign of theTimes - October 2012
ST Update
Technology Update
Vinyl Apps
Strictly Electric
LED Update
Software Update
Technology Review
Technology Review
Sign Museum News
New Products
2012 Vehicle Graphics Contest
Entry-level Electronic Digital Signage
The Proposed ISA Reorganization Plan
Enter ST's 2013 Intl. Sign Contest
SGIA Expo 2012
The Value of Signs
Advertising Index
Editorially Speaking

Signs of the Times - October 2012