Post on 16-Dec-2015
Key Owner Meeting: HP HotelsHampton/Hilton Garden Inn
August 17, 2010
Conversation Outline
-Industry Supply and Demand: Trends and Insights
-ADR Trends: How resilient are the chain-scales?
-ADR by Segment: Transient versus Group
-RevPAR at Levels not seen since…
-The “Upscale” Chain-Scale
-HP Hotels: “Competition” by brand, parent-company, and chain-scale
-Top 50 Markets: Reasons for Optimism, and ACTION!
-Forecast Comparison: May, June, July
-BONUS SLIDE: New STR product (time permitting)
Industry Commentary – Supply & Demand
SUPPLY: Hotels opened through June of 2009… 1,134. Through June 2010…780. Projected through June 2011… 102. Nearly all of it in 2 chain-scales…
Demand in June grew by 9.2%, the seventh consecutive month of growth and the second largest month-over-month demand increase in the Smith Travel era (since 1987).
7.9 million more rooms were sold in June 2010 than in June 2009.
Industry Commentary – OCCUPANCY
THE LAST 20 YEARS: The long-run industry average for occupancy is 62.1%.
HOW ABOUT NOW: As of the June 2010, T12 industry occupancy was 55.8%.
For the Trailing 12 month period ending June 2010, how many more ROOM NIGHTS would have to be sold for the industry to have achieved the long-run average of 62.1%?
110 MILLION
Every hotel in the United States, all 52,000+ of them, would have to sell-out…
FOR 23 CONSECUTIVE DAYS.
?
Industry/Chain-Scale Highlights – ADR
June 2010 broke a string of 20 consecutive months of declining ADR.
Based upon Trailing-Twelve month results ending June 2010, ADR in the U.S. lodging industry is at OCTOBER 2006 levels.
CHAIN-SCALE T12 ADR ($) SAME ADR AS:
Luxury 240.94 August 2005
Upper-Upscale 139.42 November 2005
Upscale 105.26 April 2006
Mid-scale WITH 82.29 February 2007
Mid-scale WITHOUT 84.29 June 2007
Economy 49.39 November 2005
Industry/Chain-Scale Highlights: RevPAR
Based upon Trailing-Twelve month results ending June 2010, RevPAR in the U.S. lodging industry is at February 2002 levels.
CHAIN-SCALE T12 RevPAR ($)
SAME ADR AS:
Luxury 155.35 November 2004
Upper-Upscale 92.15 February 2002
Upscale 66.55 February 2005
Mid-scale WITH 40.55 April 2004
Mid-scale WITHOUT 47.49 August 2005
Economy 24.52 August 1995
Upscale Chain-Scale Commentary, June 2010
Upscale RevPAR: +7.3%
DEMAND grew by 14.7%, and has been positive for 12 straight months. With nearly 250 more hotels online in June 2010 compared to the year prior, many travelers are taking a trial run of the new product.
The segment has NEVER sold more rooms than it did in June of 2010.
INSIGHTS:
The average age of the rooms in the upscale chain-scale is half that of the mid-scale WITH and economy chain-scales. New wins, and we expect that the new rooms added during the last 18-24 months will shift demand from these older segments.
HP “Competition” by Brand…
By Parent Company…
By Chain-Scale…
Hilton Worldwide: Top 50 U.S. Markets
Only 1 market grew occupancy
in 2009. Every market experience a decline in ADR.
CommentaryTop 50 Markets – Hilton Worldwide, June 2010
Occupancy: The compset grew occupancy in 47 markets. 11 of these markets realized an increase of AT LEAST 10%.
Atlanta was up 9.7%; Charlotte up 6.8%. The big winner was Minneapolis/St. Paul, up 20.5%.
ADR: DOWN 1.5% for the aggregated group of Top 50 Markets. The index of 110.8 is flat to 2009.
Declines of more than 5.0% have continued in Ft. Lauderdale and Detroit.
2010 Industry Forecasts
BONUS SLIDE: STR Analytics