u.s. hotel industry performance...13 • luxury – fairmont, four seasons, ritz carlton, jw...

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© 2016 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.

U.S. Hotel Industry Performance HBI Annual Conference

February 17, 2017 Jeff Higley VP/Editorial Director

[email protected]

@jeffhigley1

2 © 2016 STR. All Rights Reserved.

www.hotelnewsnow.com Data Dashboard>View All Data Presentations


About STR – The Data


Total U.S. Review


2016: Incredibly Average

% Change 29 Yr. Avg. Change

• Room Supply 1.6% +1.8%

• Room Demand 1.7% +2.0%

• Occupancy 66.7% 0.1% +0.2%

• A.D.R. $124 3.1% +3.1%

• RevPAR $83 3.2% +3.3%

• Room Revenue 4.8% +5.2%

December 2016 YTD, Total US Results


US 2016 RevPAR: 3 Markets Dragged US Results

Total US YTD: +3.2% NYC: - 1.8% Miami: - 5.5% Houston: -12.4% Total US excluding NYC, Miami & Houston: +3.8%

*RevPAR % Change December 2016 YTD


Demand Growth Slows; Supply Growth Increases To 1.6%

-0.8

-4.7

-7.1

7.7

-8

-4

0

4

8

1990 2000 2010

Supply % Change

Demand % Change

Total U.S., Supply & Demand % Change, 12 MMA 1/1990 – 12/2016


Occupancy Growth Rapidly Approaching 0%

-3.4

-6.7

-9.7

0.1

6.8 7.5

3.1

-10

-5

0

5

1990 2000 2010

Occ % Change

ADR % Change

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 12/2016


Declining Occupancies & Rising ADRs: Not Unprecedented

-4

-2

0

2

4

6

8

1990 1992 1994 1996 1998

OCC % Change

ADR % Change

24 Months

42 Months

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 12/1999


RevPAR Growth: Slowing Down After 6 Years Of Growth

-25

-20

-15

-10

-5

0

5

10

15

1990 2000 2010

Total U.S., RevPAR % Change, 1/1990 – 12/2016

56 Months 82 Months 80 Months 31 Mo


RevPAR: Erratic Monthly Numbers, But Trend Is Slowing

0

2

4

6

8

10

2015 2016

Monthly 12MMA

*Total U.S., RevPAR % Change by month and 12 MMA, 1/2015 – 12/2016


Chain Scale & Location Review

Year-end 2016

13

• Luxury – Fairmont, Four Seasons, Ritz Carlton, JW Marriott

• Upper Upscale – Sheraton, Embassy Suites, Hyatt, Marriott

• Upscale – Radisson, Hilton Garden Inn, Residence Inn, Springhill Suites, Homewood Suites, Courtyard, Best Western Premier

• Upper Midscale – Fairfield Inn/Suites, Holiday Inn, Clarion, Hampton Inn/Suites, Best Western Plus, Country Inn & Suites

• Midscale – Best Western, Candlewood Suites, Quality Inn/Suites, La Quinta, Sleep Inn, Red Lion

• Economy – Americas Best Value Inn, Country Hearth Inn, Jameson Inn, Extended Stay America, Motel 6, Red Roof, Days Inn, Microtel

• Complete list: www.HotelNewsNow.com/chainscales

2016 STR Chain Scales: Sample of brands


Scales: Supply Growth Outpaces Demand Growth For Most

2.8

1.6

5.6

2.1

1.2

0.3 0.2

2.4

1.4

5.0

1.9

1.1

-0.1

1.0

Luxury UpperUpscale

Upscale UpperMidscale

Midscale Economy Independents

Supply % Change

Demand % Change

*Supply / Demand % Change, by Scale, December 2016 YTD


High End Hotels Still Very Busy (But A Little Less So)

74.9 74.2 73.8

67.4

59.4 57.9

62.3

75.2 74.3 74.3

67.5

59.4 58.1

61.8

Luxury UpperUpscale

Upscale UpperMidscale

Midscale Economy Independents

2016 2015

*OCC %, by Scale, December YTD 2016 & 2015


Locations: Urban Leads Supply & Demand

2.9

1.4 1.0

1.5

0.9

1.4

3.0

1.6

0.8 0.4

1.8 1.5

-1

0

1

2

3

4

5

Urban Suburban Airport Interstate Resort Small Metro

Supply Demand

*Supply / Demand % Change, by Location, December 2016 YTD


Locations: What’s Up With Interstate Occupancy?

0.1 0.2

-0.2

-1.1

0.9

0.1

1.9

3.7 3.4

2.1

2.8 2.9

-2

-1

0

1

2

3

4


Occupancy ADR

Occupancy / ADR Percent Change; December 2016 YTD


Locations: Rev, Rev, Revved Up Revenue Across Board

2.1

3.9

3.3

0.9

3.8

3.1

5.0 5.4

4.2

2.5

4.7 4.5

0

1

2

3

4

5

6


RevPAR Room Revenue

RevPAR/ Room Revenue Percent Change; December 2016 YTD


Segmentation


Transient: ADR Growth Slowing Despite High Occupancy

0%

1%

2%

3%

4%

5%

6%

Jan-14 Jan-15 Jan-16

Demand % Change

ADR % Change

*Transient Demand and ADR % Change, 12 MMA, 1/2014 – 12/2016


Group Performance: No Demand Growth To Speak Of

-2%

-1%

1%

2%

3%

4%

5%

6%

Jan-14 Jan-15 Jan-16

Demand % Change

ADR % Change

*Group Demand and ADR % Change, 12 MMA, 1/2014 – 12/2016

Jewish Holiday Shift


Markets


New Supply Affects NYC, Houston, Miami

Market OCC % ADR % Change

Los Angeles/Long Beach, CA 81.3 8.5

Nashville, TN 74.8 6.0

Atlanta, GA 69.9 5.8

Tampa/St Petersburg, FL 71.6 5.6

Denver, CO 73.7 5.5

Phoenix, AZ 67.2 1.8

Chicago, IL 69.1 1.4

New Orleans, LA 68.8 0.0

New York, NY 85.9 -2.5

Miami/Hialeah, FL 75.9 -2.9

Houston, TX 62.3 -3.6 * December 2016 YTD ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets


-2.4

-6.5

3.2

-4.5 -4.9 -4.0

-1.5 -1.7

-3.7

-7.5

8.8

3.7

Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec

NYC RevPAR: Mostly Bad. New Supply Looming Large

* NYC RevPAR % Change, by Month, 12/2015 – 12/2016


Houston: As Oil Goes, So Does Demand

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

$30

$40

$50

$60

$70

$80

$90

$100

2014 2015 2016

Crude Oil Futures Price / Barrel (LHS)

Demand % Change (RHS)

*Monthly Oil price Future / Barrel vs. Houston, TX Room Demand % Change 1/2014 – 12/2016 http://www.investing.com/commodities/crude-oil

$/gal %


Pipeline


Pipeline: Is This When Overbuilding Happened?

Phase 2016 2015 % Change

In Construction 187 140 33%

Final Planning 198 180 10%

Planning 174 147 17%

Under Contract 560 469 19%

*Total US Pipeline, by Phase, ‘000s Rooms, December 2015 and 2016

28 © 2016 STR. All Rights Reserved. *Total US Pipeline; Rooms In Construction, in ‘000s; Jan 2006 – December 2016

0

50

100

150

200

250

2006 2008 2010 2012 2014 2016

Low: May ‘11 50K

Dec‘16 187K

High: Dec ‘07

211K

24K

U/C Pipeline Is Growing But Still Below Prior Peak Th

ou

san

ds


Limited Service Construction Is The Name Of The Game

7.5

23.6

61.6 60.0

8.8 2.6

22.8

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated

*US Pipeline, Rooms Under Construction , ‘000s Rooms, by Scale, December 2016

65%


Construction In Top 26 Markets: 23 With 2%+ Of Supply

*US Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, December 2016

Market Rooms U/C % Of Existing

Norfolk/Virginia Beach, VA 456 1%

Orlando, FL 1,552 1%

Oahu Island, HI 410 1%

Minneapolis/St Paul, MN-WI 763 2%

St Louis, MO-IL 876 2%

Las Vegas, NV 3,950 2%

Chicago, IL 3,212 3%

New Orleans, LA 1,211 3%

Phoenix, AZ 1,962 3%

San Francisco/San Mateo, CA 1,825 4%

Atlanta, GA 3,421 4%

Washington, DC-MD-VA 4,069 4%

Detroit, MI 1,662 4%

San Diego, CA 2,371 4%

Anaheim/Santa Ana, CA 2,533 4%

Tampa/St Petersburg, FL 2,114 5%

Boston, MA 2,764 5%

Houston, TX 4,664 5%

Los Angeles/Long Beach, CA 6,069 6%

Philadelphia, PA-NJ 3,004 6%

Miami/Hialeah, FL 3,579 7%

Nashville, TN 3,401 9%

Dallas, TX 7,101 9%

Denver, CO 4,596 10%

Seattle, WA 5,219 12%

New York, NY 15,333 13%


Top 26 Markets Have 47% Of U/C Rooms

88.1 98.8

77.2

121.5

69.5

105.0

Top 26 Markets Rest of the US

In Construction

Final Planning

Planning

*US Pipeline, Rooms (‘000s), Top 26 Markets vs. All Other Markets, December 2016


YE 2016 Transaction Almanac


Transaction Volume: A Step Back

$5.1 $3.5 $3.3

$6.9

$13.2

$22.8

$29.8

$26.3

$9.5

$3.1

$13.1

$19.4

$12.5

$16.8

$18.6

$23.4

$10.4

$0

$5

$10

$15

$20

$25

$30

$35

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Bill

ion

s


Average Price per Room: Keep on Climbing!

$87 $94

$87 $76

$100

$122

$174

$152

$124

$72

$125

$189 $181

$190

$219

$238 $251

$0

$50

$100

$150

$200

$250

$300

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Tho

usa

nd

s


Total Investment per Room (Including Additional Capital)

$102 $110

$97 $101

$133

$158

$206

$187

$143

$96

$134

$203

$221 $217

$249 $257

$277

$0

$50

$100

$150

$200

$250

$300

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Tho

usa

nd

s


2016 / 2017 Forecast


Notable Calendar Shifts Impacting Lodging Performance Data in 2017:

Easter: From March to April (affects Q1/Q2)

Jewish Holidays: From October to September (affects Q3/Q4)

January had two fewer Weekend days (Net -)

Notable Market Level Events / Comps:

Super Bowl: From San Francisco To Houston

San Francisco: Super Bowl Shift and Moscone Center Renovation

Los Angeles: Porter Ranch Gas Leak

Washington, D.C.: Inauguration (January)

East Tennessee: Wild Fires (November)

East Coast: Hurricane Matthew (October)


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

Outlook

2017 Forecast

2018 Forecast

Supply 2.0% 2.2%

Demand 1.7% 2.0%

Occupancy -0.3% -0.2%

ADR 2.8% 2.8%

RevPAR 2.5% 2.6%


Total United States Chain Scale Key Performance Indicator Outlook 2017F by Chain Scale

2017 Year End Outlook

Chain Scale Occupancy

(% chg) ADR

(% chg) RevPAR (% chg)

Luxury -0.4% 2.5% 2.1%

Upper Upscale -0.2% 2.5% 2.3%

Upscale -1.1% 2.5% 1.3%

Upper Midscale -0.7% 2.3% 1.6%

Midscale 0.1% 2.4% 2.5%

Economy 0.0% 2.7% 2.7%

Independent -0.3% 3.0% 2.7%

Total United States -0.3% 2.8% 2.5%


Total United States Chain Scale Key Performance Indicator Outlook 2018F by Chain Scale

2018 Year End Outlook

Chain Scale Occupancy

(% chg) ADR

(% chg) RevPAR (% chg)

Luxury -0.2% 3.0% 2.8%

Upper Upscale -0.1% 2.8% 2.7%

Upscale -0.7% 2.5% 1.7%

Upper Midscale -0.6% 2.5% 1.9%

Midscale -0.2% 2.5% 2.2%

Economy -0.1% 2.3% 2.3%

Independent -0.2% 2.8% 2.7%

Total United States -0.2% 2.8% 2.6%


2017 Year End RevPAR Forecast -5% to 0% 0% to 5% 5% to 10%

Houston, TX Anaheim-Santa Ana, CA

Miami-Hialeah, FL Atlanta, GA

New York, NY Boston, MA

Chicago, IL

Dallas, TX

Denver, CO

Detroit, MI

Los Angeles-Long Beach, CA

Minneapolis-St. Paul, MN-WI

Nashville, TN

New Orleans, LA

Norfolk-Virginia Beach, VA

Oahu Island, HI

Orlando, FL

Philadelphia, PA-NJ

Phoenix, AZ

San Diego, CA

San Francisco/San Mateo, CA

Seattle, WA

St. Louis, MO-IL

Tampa, FL

Washington, D.C.

Top 25 US Markets, Nov 2016 Forecast (Markets sorted alphabetically)


Odds and Ends …


The new Marriott

House Of Brands

12/2016


Parent Company Properties Rooms

Marriott International 5,890 115,2034

Hilton Worldwide 4,819 785,087

InterContinental Hotels Group 4,998 721,816

Wyndham Worldwide 7,707 675,552

Accor 3,886 526,729

Choice Hotels International 6,417 510,551

Best Western Hotels & Resorts 3,728 295,872

Carlson Hospitality Company 1,135 178,576

Hyatt Hotels Corp. 651 170,053

Jinjiang Holding 1,180 147,078

World’s Largest Hotel Companies … Scale Matters!


The Email That Started Airbnb:

* Joe Gebbia/Brian Chesky


2014 75

2016 71

2015 76

Compression Nights in 7 US Markets, July YTD

+2.68mm

+2.60mm

+127%

+3%

2013 61

Hotel

Airbnb

Supply Change (‘14-’16)

“Airbnb and Hotel Performance” - Full Report at str.com

49

Questions? Presentation is available for download. To view this presentation, click “STR Data Presentations” from the drop-down menu on www.HotelNewsNow.com.

© 2016 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.

u.s. hotel industry performance...13 • luxury – fairmont, four seasons, ritz carlton, jw...

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