2017 kansas tourism conference hotel industry overview october 25, 2017 · 2018-04-10 · denver,...

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© 2017 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.

2017 Kansas Tourism ConferenceHotel Industry OverviewOctober 25, 2017

[email protected]

Chris Klauda, Research Director

2© 2017 STR. All Rights Reserved.

Agenda

• Total US Review

• Kansas Review

• US and Kansas Pipeline

• Current Events

• Forecasts


Once Upon A Time

• Business was good except for birds,

• In Kansas things look a bit different,

• If you build it will they come?

• “Toto, we are not in Kansas anymore”

• What does the future hold?


www.hotelnewsnow.comData Dashboard>View All Data Presentations

5

The Center of the Hotel Industry Benchmarking Universe:

Hendersonville, TN


What is ?

STR is a leading source for premium global data benchmarking, analytics and marketplace insights.


STR Building Blocks

Supply(rooms available)

Demand(rooms sold)

Revenue(rooms revenue)

OCC ADR

RevPAR


STR Building Blocks

Supply(1.86B rooms available)

Demand(1.22B rooms sold)

Revenue($154B rooms revenue)

OCC 65.7% ADR $126

RevPAR $83


2016 Total World Hotel Industry Performance (RevPAR % Change)

Caribbean: ↓3.0%

S. America: ↑5.3%

Europe: ↑2.1%

Middle East: ↓9.3%

Asia Pacific: ↑0.6%

United States: ↑ 3.2%

RevPAR % Change, USD, Europe in EUR, Constant Currency, 2016 | www.str.com/products/global-hotel-study


US Performance: RevPAR Growth Continues

+1.8%+2.4%

+0.6%

+2.1%+2.8%

+4.6%

1.86BSupply

1.22BDemand

65.7%Occupancy

$126ADR

$83RevPAR

September, 2017 12MMA, Total US Results

$154BRevenue


Look How Far We Have Come

$90

$100

$110

$120

$130

$140

50 55 60 65 70 75

ADR

Occupancy

September, 2017 12MMA, Total US Results


New Supply Increasing But Not Devastating

-8

-4

0

4

8

1990 2000 2010

Supply % Change

Demand % Change

Total U.S., Supply & Demand % Change, 12 MMA 1/2002 – 9/2017 2017

Today

1990-1992Bad timing;S&L crisis

1996-2000Too much supply despite

growing demand

2001-2003Declining supply, but

catastrophic demand loss

2007-2010Worst of all scenarios:

sharply increasing supply at a time of catastrophic

demand loss


RevPAR Growth

-25

-20

-15

-10

-5

0

5

10

15

1990 1995 2000 2005 2010 2015

Gulf War

9/11

Housing / Banking Crisis

56 Months 91 Months111 Months

17 24

Total U.S., RevPAR % Change, 1/1990 – 9/2017

15


RevPAR Growth: 7 Years And Counting

-25

-20

-15

-10

-5

0

5

10

15

1990 1995 2000 2005 2010 2015

Gulf War

9/11

Housing / Banking Crisis

56 Months 91 Months111 Months

17 24

Total U.S., RevPAR % Change, 1/1990 – 9/2017

15


Chain Class Review

LuxuryUpper Upscale

Upscale Upper Midscale

Midscale Economy

Four Seasons & Ritz-Carlton

Marriott & Hilton

DoubleTree, Courtyard & Wyndham

Hampton, Fairfield & Holiday Inn Express

Best Western, Candlewood Suites & Ramada

Days Inn, Red Roof Inn, Super 8, Econo Lodge

Full Chain Class Listing: http://str.com/resources/documents


Top Classes See Greater Supply Increase; All Others See Greater Demand

2.4

1.7

4.0 3.9

0.2

-0.4

2.2

1.5

4.3 4.3

1.5

0.6

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

Supply % Change

Demand % Change

*Supply / Demand % Change, by Class, 12 MMA September 2017


Upper End Hotels Still Selling 7 Out Of 10 Rooms

58.8

60.4

67.4

72.1

72.5

70.7

58.2

59.6

67.2

72.0

72.6

70.9

Economy Class

Midscale Class

Upper Midscale Class

Upscale Class

Upper Upscale Class

Luxury Class

2016

2017

*OCC %, by Scale, 12 MMA September 2017 & 2016


Occupancy Growth Hard (Impossible?) To Come By For Some Scales

-0.3 -0.20.2 0.3

1.3 1.0

1.9 1.71.7 1.7

2.4 3.1

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

ADR Occ

*RevPAR % Change by Contribution of OCC / ADR % Change, by Class, 12 MMA September 2017

1.71.5

1.9 2.0

3.7

4.1


Weekends Selling Out; Sunday and Monday Lag

52.2

62.1

67.6

68.6

65.5

70.4

73.6

51.8

62.0

67.4

68.0

65.0

70.0

73.1

Sunday

Monday

Tuesday

Wednesday

Thursday

Friday

Saturday

2016

2017

*OCC %, by DOW, 12 MMA September 2017 & 2016


Total US Segmentation Trends


SEGMENTATION

TRANSIENT GROUP

SOURCE: STR

UPPER UPSCALE & LUXURY CLASS


YTD Segmentation MixHotel USA

Total US, Luxury & Upper Upscale Classes Only, 2017 June YTD

Transient | 62%

•<10 Rooms per Night

Group | 34%

•≥ 10 Rooms per Night

Contract | 4%

•Rates stipulated by a contract (i.e. Airline Crews)



Marriott & Hilton





Chain Class Review

LuxuryUpper Upscale


Midscale Economy



Demand Segmentation:Transient Growth Outpacing Group Growth

0

20

40

60

80

100

120

140

160

180

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 TTM2017

Occ

up

ied

Ro

om

Nig

hts

(M

illio

ns)

Transient

Group

Transient+39%

Group+2%

Transient & Group Demand, Luxury & Upper Upscale Class Only by Year 2002 – 9/2017 TTM


ADR Segmentation Is A Different Story: Group ADR Growth Outpacing Transient ADR Growth

$100

$120

$140

$160

$180

$200

$220

$240

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 TTM2017

Transient

Group

Transient+12%

Group+16%

Transient & Group Demand, Luxury & Upper Upscale Class Only by Year 2002 – 9/2017 TTM


TransientDemand +2.9%

ADR +1.5%

Today (12MMA) vs. Last Year

September 2017 12MMA % Change, US Luxury & Upper Upscale Class


GroupDemand -1.5%

ADR +2.4%






TransientDemand +2.9%

ADR +1.5%

GroupDemand -1.5%

ADR +2.4%


Top 5 (Almost 6) Projects In Construction By Meeting Space

Project Name MarketProjected

Opening Date Room CountTotal Meeting

Space Sq Ft

Gaylord Rockies Hotel & Conference Center Denver 12/2018 1500 400,000

Fairmont Austin Austin 09/2017 1048 107,000

Hyatt Regency Seattle Seattle 06/2018 1260 100,000

Omni Louisville Louisville 03/2018 600 70,000

JW Marriott Nashville Nashville 07/2018 533 60,000

1

2

3

45

6


Markets (and Submarkets)


Five Best and Worst Performing Top 25 Markets Based onADR % Change

Market OCC % ADR % Change Influenced By

Nashville, TN 74.0% 5.6% Bachelorette Parties

Washington, DC-MD-VA 72.1% 4.3% Inauguration / Women’s March

Detroit, MI 66.5% 4.3%

Seattle, WA 76.9% 4.2%

Tampa/St Petersburg, FL 71.8% 4.2%

Houston, TX 62.8% -1.0% New Supply; Future Harvey Impact

New York, NY 86.5% -1.6% New Supply

San Francisco/San Mateo, CA 83.4% -1.8%Superbowl 2016 / Moscone Center

Closed Apr–Aug

Philadelphia, PA-NJ 68.1% -2.7% DNC 2016

Miami/Hialeah, FL 75.1% -3.7% New Supply

* September, 2017 12 MMA ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets


September 2017 12MMA: Kansas City Is A Top Performer


Nashville, TN 74.0% 5.6% Bachelorette Parties

Washington, DC-MD-VA 72.1% 4.3% Inauguration / Women’s March

Detroit, MI 66.5% 4.3%

Seattle, WA 76.9% 4.2%

Tampa/St Petersburg, FL 71.8% 4.2%

Kansas City, MO-KS 65.9% 4.2%

Houston, TX 62.8% -1.0% New Supply; Future Harvey Impact

New York, NY 86.5% -1.6% New Supply

San Francisco/San Mateo, CA 83.4% -1.8%Superbowl 2016 / Moscone Center

Closed Apr–Aug

Philadelphia, PA-NJ 68.1% -2.7% DNC 2016

Miami/Hialeah, FL 75.1% -3.7% New Supply

* September, 2017 12 MMA ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets


STR Markets in Kansas and Surrounding Area


Performance: Kansas and Surrounding STR Markets


Colorado Springs, CO 68.1% 8.4%

Kansas City, MO-KS 65.9% 4.2% Supply Decrease

St Louis, MO-IL 65.4% 3.8%

Colorado Area 60.8% 3.7%

Denver, CO 73.2% 2.9% Supply Increase

Missouri North 55.8% 2.9%

Missouri South 54.9% 2.8%

Kansas Area 53.3% 2.2%

Supply Increase

Tulsa, OK 55.0% 1.5%

Nebraska 54.0% 1.3%

Omaha, NE 58.2% 0.2%

Oklahoma Area 48.4% -1.2%

Oklahoma City, OK 61.2% -1.7%

* September, 2017 12 MMA Actual Occupancy and ADR % Change in Markets Surrounding Kansas


Kansas


State of Kansas: ADR Drives RevPAR and Revenue Growth

+1.0%

-1.0%

-2.0%

+2.6%

+0.5%

+1.5%

16.6MSupply

9.3MDemand

56.2%Occupancy

$87ADR

$49RevPAR

September, 2017 12MMA, Kansas Results

$812MRevenue


Kansas % Change KPIs Lower Than US Average EXCEPT ADR

-3

-2

-1

0

1

2

3

4

5

Supply Demand Occ ADR RevPAR Revenue

Kansas Total US

September, 2017 12MMA, Kansas Results


Kansas City Market and Four Kansas Submarkets


Kansas Hotel Room SupplyI-70 Corridor

10%

Kansas Area22%

Topeka/Lawrence6%Wichita

14%

Kansas City, MO-KS

48%

September, 2017 12MMA, Kansas City Market and Kansas Submarket Results


Supply/Demand Out of Balance In Markets Outside KC

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

Wichita Kansas Area I-70 Corridor Topeka/Lawrence Kansas City, MO-KS

Demand change Supply change

September, 2017 12MMA, Kansas City Market and Kansas Submarket Results


All Submarkets Above 50% Occupancy; Kansas City and I-70 See Gains

0% 25% 50% 75%

Kansas Area

I-70 Corridor

Topeka/Lawrence

Wichita

Kansas City, MO-KS

2016

2017

September, 2017 12MMA Occupancy%, Kansas City Market and Kansas Submarket Results


Kansas City Attracts Highest ADR; All Markets Increased ADR in 2017

$0 $20 $40 $60 $80 $100 $120

I-70 Corridor

Kansas Area

Wichita

Topeka/Lawrence

Kansas City, MO-KS

2016

2017

September, 2017 12MMA ADR, Kansas City Market and Kansas Submarket Results


Kansas City Earns Highest RevPAR

$0 $10 $20 $30 $40 $50 $60 $70 $80

Kansas Area

I-70 Corridor

Wichita

Topeka/Lawrence

Kansas City, MO-KS

2016

2017

September, 2017 12MMA RevPAR, Kansas City Market and Kansas Submarket Results


Class: KC and Outside KC Occupancy Differences Greater inMid and Lower Tiers

0% 25% 50% 75%

Luxury & Upper Upscale

Upscale & Upper Mid

Midscale & EconomyKC

Outside KC

September, 2017 12MMA Occupancy%, Kansas City Market and Kansas Submarket Results


Chain Class Review

LuxuryUpper Upscale


Midscale Economy


Marriott & Hilton







Class: KC and Outside KC ADR Differences Greater in Upper Tiers

$0 $20 $40 $60 $80 $100 $120 $140 $160

Luxury & Upper Upscale

Upscale & Upper Mid

Midscale & EconomyKC

Outside KC

September, 2017 12MMA ADR, Kansas City Market and Kansas Submarket Results


Market Metrics

Occupancy Outside KC Kansas City

Luxury & Upper Upscale 65.6% 66.4%

Upscale & Upper Mid 62.9% 68.9%

Midscale & Economy 47.4% 62.2%

ADR Outside KC Kansas City

Luxury & Upper Upscale $118 $147

Upscale & Upper Mid $102 $115

Midscale & Economy $64 $62


Pipeline


US Pipeline: I/C Growth Still Strong (But Growth Rates Used to be 30%+)

Phase 2017 2016 % Change

In Construction 192 170 13%

Final Planning 220 198 11%

Planning 178 174 2%

Under Contract 590 542 9%

*Total US Pipeline, by Phase, ‘000s Rooms, August 2017 and 2016


Limited Service Construction Is The Name Of The Game

8.9

26.4

61.3 63.0

9.9

2.5

20.2

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated

*US Pipeline, Rooms In Construction , ‘000s Rooms, by Scale, August 2017

65%


Top 110 MSAs Pipeline Growth – Southeast and West Dominate

MarketRooms In

Construction % Of ExistingNashville-Davidson--Murfreesboro--Franklin, TN (MSA - 34980) 5,545 13.3%

Savannah, GA (MSA - 42340) 1,769 11.5%

Denver-Aurora-Lakewood, CO (MSA - 19740) 5,364 11.2%

Oklahoma City, OK (MSA - 36420) 2,297 9.2%

North Port-Sarasota-Bradenton, FL (MSA - 35840) 827 8.8%

New York-Newark-Jersey City, NY-NJ-PA (MSA - 35620) 18,115 8.8%

Seattle-Tacoma-Bellevue, WA (MSA - 42660) 4,348 8.6%

Portland-Vancouver-Hillsboro, OR-WA (MSA - 38900) 2,366 8.4%

Dallas-Fort Worth-Arlington, TX (MSA - 19100) 9,498 8.1%

Greenville-Anderson-Mauldin, SC (MSA - 24860) 917 7.4%

*US Pipeline, Rooms I/C and as % of Existing Supply, Largest % In Top 110 MSAs, August 2017


Upper Midscale Is The Name Of The Game in Kansas (22 Props)

0% 0%

21%

70%

9%

0% 0%5%

14%

32% 33%

5%1%

10%

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated

Kansas US

*Kansas and US Pipeline, % of Rooms In Construction, by Scale, August 2017


Pipeline – 22 in Kansas; 8+1 in Missouri

4 in Wichita

2 in KCK 5 in Overland Park

8+1 in MO3 in

Topeka

Liberal

Hays

2 in McPherson

Salinas

Emporia

Pittsburg

Chanute


Industry Consolidation Oil Markets AirBNB President

Trump

Current Events


Immigration Policies

Travel Bans

Sentiment Toward US Turning Negative

Deregulation

Tax Cuts

“Hotel Guy”

President Trump


2017 / 2018 Forecast


Total United StatesKey Performance Indicator Outlook (% Change vs. Prior Year)2017F – 2018F

Outlook

2016 Actual

2017Forecast

2018Forecast

Supply 1.8B 2.0% 2.1%

Demand 1.2B 2.0% 1.9%

Occupancy 65.4% 0.0% -0.2%

ADR $124 2.3% 2.5%

RevPAR $81 2.3% 2.3%

59

Forecast Summary (STR as of August 2017, CBRE and PWC as of May 2017)

2017 as

Supply 2.0% 2.0% 2.0%

Demand 2.0% 2.1% 2.1%

Occupancy 0.0% 0.1% 0.1%

ADR 2.3% 2.9% 2.3%

RevPAR 2.3% 3.0% 2.3%

2018

Supply 2.1% 2.1% 1.8%

Demand 1.9% 1.8% 1.6%

Occupancy -0.2% -0.3% -0.2%

ADR 2.5% 2.9% 2.2%

RevPAR 2.3% 2.6% 2.0%


Once Upon A Time

• Continued positive performance – 91 months and counting!

• In Kansas - a tale of two cities areas,

• Limited service supply rules; especially in Kansas; except for…,

• Current events yield positive and negative momentum for travel; Kansas less impacted (?)

• Future is optimistic; ADR is the name of the game

61

Questions?

Presentation is available for download.

To view this presentation, click “STR Data Presentations” from the drop-down menu on www.HotelNewsNow.com.

© 2017 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.

2017 kansas tourism conference hotel industry overview october 25, 2017 · 2018-04-10 · denver,...

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