Brian D. Stevens Chair

MPI IBOD

April 20th, 2017

Brian D. Stevens

Brian

BDS

350 Associates

11,000 bookings

3.8 million room nights

$785 million

In 2016:

1985

1997-2001

2014-present

INDUSTRY UPDATE AND FORECAST LATEST PREDICTIONS FROM MPI MEMBERS NEW AND UPCOMING @ MPI OPEN DISCUSSION

1 • My prediction: an overdue economic decline in the next 18 months.

• Why this matters: History can help you anticipate the future and plan

accordingly.

Why are we here?

1 1) Smith Travel Research

2) ConferenceDirect Data

3) Meetings Mean Business

4) MPI Meetings Outlook

Research Sources

The global economy had a weak 2016.

2.6% 2.5%

2.8% 2.7%

2.2%

2012 2013 2014 2015 2016*

Global

Year-Over-Year Change

(4%) (2%) 0% 2% 4% 6% 8%

Brazil

Italy

Japan

France

Canada

US

Germany

Eurozone

Mexico

UK

Australia

Spain

China

India

Key Countries

Worse

Better

Real GDP Change

Oxford Economics

(20%)

(15%)

(10%)

(5%)

0%

5%

10%

15%

20%

4Q

05

2Q

06

4Q

06

2Q

07

4Q

07

2Q

08

4Q

08

2Q

09

4Q

09

2Q

10

4Q

10

2Q

11

4Q

11

2Q

12

4Q

12

2Q

13

4Q

13

2Q

14

4Q

14

2Q

15

4Q

15

2Q

16

4Q

16

Exports Constant Prices and Exchange Rate—USD—Year-Over-Year Change

Avg. 6.9% Avg. 2.6%

World trade remains weak.

Oxford Economics

3.5%

4.3%

4.8%

2.7%

3.6%

2012 2013 2014 2015 2016*

Global

Corporate Profits Year-Over-Year Change—Global Based on 43 Country Aggregate—Constant USD

(5%) 0% 5% 10%

Japan

Canada

US

Australia

France

Italy

Eurozone

UK

Spain

Brazil

Germany

Mexico

China

Key Countries

Worse

Better

Oxford Economics; IHG PS&P

Corporate profits remained positive.

2.2% 2.2%

2.5% 2.5% 2.6%

2012 2013 2014 2015 2016*

Global

Consumer Spending Year-Over-Year Change—Constant Prices & Exchange Rate

(6%) (4%) (2%) 0% 2% 4% 6% 8% 10%

Brazil

Japan

Italy

Germany

Eurozone

France

Canada

Australia

US

UK

Mexico

Spain

India

China

Key Countries

Worse Better

Oxford Economics

Consumers are also spending more.

3.1%

2.8%

3.8%

2.8%

2.3%

2012 2013 2014 2015 2016

Global

Industry Demand Year-Over-Year Change

(6%) (4%) (2%) 0% 2% 4% 6%

Brazil

France

Italy

Japan

Eurozone

Germany

Canada

US

UK

Mexico

World

Australia

Spain

China

India

Key Countries

Worse Better

STR, Inc.

Lodging demand grew, but at the slowest pace in 7 years.

80

85

90

95

100

105

110

115

120

125

130

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16

Global United States

Industry Demand Index Seasonally-Adjusted—Prior Peak Index

STR, Inc.

Even with the slower growth, lodging demand remained at record highs.

50%

52%

54%

56%

58%

60%

62%

64%

66%

68%

1990 1991 1993 1994 1996 1997 1999 2000 2002 2003 2005 2006 2008 2009 2011 2012 2014 2015

US Industry Occupancy 12-Month Moving Average—Absolute Level

STR, Inc.

US occupancy remained at an all-time high.

STR, Inc.

Despite a downward trend, RevPAR has seen a resurgence over the past five months.

Industry RevPAR Trend Year-Over-Year Change

(2%)

0%

2%

4%

6%

8%

10% J-

15

F-1

5

M-1

5

A-1

5

M-1

5

J-1

5

J-1

5

A-1

5

S-1

5

O-1

5

N-1

5

D-1

5

J-1

6

F-1

6

M-1

6

A-1

6

M-1

6

J-1

6

J-1

6

A-1

6

S-1

6

O-1

6

N-1

6

D-1

6

J-1

7

F-1

7

M-1

7

OCC ADR RPR

STR, Inc.

Lodging demand improved significantly in Q1 2017.

1.7% 1.5%

2.0%

3.1%

4.6%

1Q16 2Q16 3Q16 4Q16 1Q17F

Global

Lodging Demand Change Year-Over-Year Change

(5%) 0% 5% 10%

Brazil

Japan

US

Spain

Canada

Australia

Germany

UK

Mexico

Italy

India

France

Eurozone

China

Key Countries 1Q 2017

Worse

Better

STR, Inc.

Q1 occupancy in the top 25 US markets remained below its 2015 all-time high.

66.8%

68.9%

70.7% 70.3% 70.3%

1Q13 1Q14 1Q15 1Q16 1Q17F

Top 25 US Markets

Industry Occupancy—Top 25 Markets Year-Over-Year Change

50% 55% 60% 65% 70% 75% 80% 85%

Chicago Minn/St Paul Philadelphia

Boston Detroit

Houston Denver

Wash DC Nashville

Dallas Atlanta Seattle

New Orleans San Diego New York San Fran Phoenix

Los Angeles Tampa/St …

Orlando Miami Oahu

Key Markets

Worse

Better

STR, Inc.

Rates are increasing in most of the top US markets, but the overall growth rate remained below Q1 2016.

3.2%

2.6% 2.8%

2.0%

2.5%

1Q16 2Q16 3Q16 4Q16 1Q17F

Top 25 US Markets

Industry ADR Change—Top 25 Markets Year-Over-Year Change

(10%) (5%) 0% 5% 10%

Miami New York

Boston Los Angeles

San Fran Chicago

Philadelphia Minn/St Paul New Orleans

Orlando Dallas

Denver Seattle Atlanta Detroit

Nashville Phoenix Houston

Tampa/St Pete Oahu

San Diego Wash DC

Key Markets

Worse Better

STR, Inc.

ADR growth slowed in Transient with Group ADR gains similar to prior years.

3.1% 3.3%

4.0% 3.6% 3.8%

1Q13 1Q14 1Q15 1Q16 1Q17F

Group

Industry ADR Change Luxury & Upper Upscale Only—Year-Over-Year Change

5.9%

5.3% 4.9%

1.6%

2.2%

1Q13 1Q14 1Q15 1Q16 1Q17F

Transient

ConferenceDirect YE 2016

2015 2016 ’16 vs ‘15

Bookings 10,684 11,073 3.6%

Room Nights 3,871,365 3,831,712 -1.0%

ADR $202.43 $204.96 1.2%

ConferenceDirect Q1 2017

Q1 2016 Q1 2017 ’16 vs ‘17

Bookings 2,307 2,473 7.2%

Room Nights 598,959 571,755 4.5%

ADR $202.17 $199.93 1.1%

The

Question

13 Airbnb Markets

United States

• Boston

• Los Angeles

• Miami

• New Orleans

• San Francisco

• Seattle

• Washington, D.C.

International

• Barcelona

• London

• Mexico City

• Paris

• Sydney

• Tokyo

STR, Inc.

Largest Lodging Companies by Rooms – Less Private Rooms

166k

177k

295k

511k

516k

673k

716k

769k

981K

1.1M

Hyatt

Carlson Hospitality Company

Best Western Hotels & Resorts

Choice Hotels International

Accor Company

Wyndham Worldwide

Intercontinental Hotels Group

Hilton Worldwide

Airbnb

Marriott + Starwood

Estimated for Airbnb 7 US markets used as proxy

STR, Inc.

Why MMB?

• We need to be prepared for another recession.

• With a single comment, President Obama created a slight

recession in our industry.

• We must constantly collect and present data to quantitatively

advocate the value of our industry to the U.S. economy

• We need to push against increased taxation on meetings and

travel – we lost the battle of the lunch deduction.

Small Business Survey

Overwhelmingly believe in-person meetings are

important to their business

Q4: How important do you believe in-person meetings are to your business?

Important Not important

85%

15%

47%

very

2% not at all

38%

somewhat

13%

not very

Consider in-person meetings a worthwhile expense

Q6: To what extent do you believe in-person meetings yield a return on investment?

Return on

investment

No return on

investment

77%

23% 31%

great

4% no

46%

moderate

19%

little

Building partnerships

Negotiating and solidifying agreements

Finding and interviewing potential new hires

Networking with colleagues, peers and partners

Engaging with the community

Exploring new business opportunities

Onboarding and training new employees

Training and attending continued education programs

Innovating and developing creative solutions

Keeping up-to-date on the newest industry trends

25%

20%

24%

14%

13%

9%

13%

7%

8%

4%

33%

41%

47%

59%

60%

68%

68%

71%

75%

82%

In-person is better Remote is better

That add value remote meetings cannot

Q13: Do you believe each of the following is better accomplished via in-person, face-to-face meetings or via remote video, online or teleconferencing?

The tech sector embraces face-to-face too!

98%

55%

95%

55%

In-person meetings are important

Plan to increase spending next year

In-person meetings yield a return on

investment

Prioritize in-person meetings during budget

cuts

A note on

The United scandal raises some important concerns for meeting planners.

• Today is different than ever before with smart phones and the ease of virality.

• Consider Delta’s reaction.

• What would you do if you had to forcibly remove someone from a meeting?

Bill O’Reilly ousted from Fox News after nearly two decades.

The OUTLOOK

Industry demand is also anticipated to rise in 2017.

5.6%

4.4%

3.8% 4.0%

2014 2015 2016 2017

Global

Oxford Economics

(1%) 0% 1% 2% 3% 4% 5% 6%

Brazil

Spain

Italy

France

Germany

UK

Canada

Mexico

India

US

Australia

China

Japan

Key Countries

Better

Worse

Room Nights in Hotels Year-Over-Year Change

Oxford Economics

US industry forecasters are predicting slightly lower rate gains in 2017 with occupancy near record highs.

65.4% 65.5% 65.2%

2015 2016 2017

Occupancy Change (pts)

4.5%

3.1% 2.9%

2015 2016 2017

ADR Change

US Industry Occupancy and ADR Forecast Year-Over-Year Change

Consensus Forecast(CBRE; STR & PWC)

INSIGHTS FROM MPI MEMBERS

Fall

2016

Edition

Fall

2016

Edition

Winter

2016

Edition

Fall

2016

Edition

43% say there has been no change in

the selection of destinations with more liberal handgun or

weapons laws.

How Do Liberal Gun Laws Affect Destination Selection?

2% prefer these destinations 37% don’t know/deciding

19% avoid destinations with more

liberal handgun or weapons laws.

2% prefer these destinations 38% don’t know/deciding

How Do Restroom Laws Affect Destination Selection?

31% say there has been no change in the selection of destinations

that prohibit universal restroom usage (U.S.)

30% avoid destinations that prohibit universal restroom usage (U.S.).

Do You Use Social Media for Your Meetings?

Always 19% Mostly 20% Case-by-case 40% Seldom 11% Never 6% What’s that? 3%

Most Important Medium

39.4%

38.8%

12.5%

Strongly Agree

Somewhat Agree

Somewhat Disagree

Disagree Strongly

Pulse Check: Delegates should be banned from using personal devices during meetings and

events.

6.5%

33.5%

28%

32%

The importance of MENTORSHIP

Your future GOALS for MPI and MENTORSHIP

What are your goals for your involvement with MPI in the next six months?

Who is a mentor to you, inside or outside of MPI? (note: not an employer)

Who are you mentoring inside or outside of MPI (note: not an employee)?