Hotel Industry Overview - Cloudinary · 2018-09-04 · Excellent Year For High and Low End Hotels...

© 2018 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.

Hotel Industry Overview

Chris Klauda

Senior Director, Market Insights

[email protected]

@STR_Data

2

Agenda – August 30, 2018

• Total U.S.

• Fort Lauderdale

• Fort Lauderdale SubmarketsRegions

• Recent Performance

• Chain Scales

• Group/Transient

• Pipeline

• Forecast

Topics


Total U.S. Review

© 2018 STR. All Rights Reserved. 5

STR Benchmark Building Blocks

Supply(rooms available)

Demand(rooms sold)

Revenue(rooms revenue)

Occupancy ADR

RevPAR


US Performance: Records Continue

+2.0%

+3.0%

+1.1%

+2.4%

+3.4%

+5.5%

1.89B

Supply

1.25B

Demand

66.2%

Occupancy

$129

ADR

$85

RevPAR

July, 2018 12MMA, Total US Results

$161B

Revenue


2.0

-0.8

-4.7

-7.1

7.8

3.0

-8

-4

0

4

8

1990 2000 2010

Supply % Change

Demand % Change

Demand Growth Continues. Supply Growth Slow and Steady.

Total U.S., Supply & Demand % Change, 12 MMA 1/1990 – 07/2018

Gulf

War

9/11

Housing /

Banking Crisis


Occupancy Growth Leads To New Records

-3.4

-6.7

-9.7

1.1

-10

-5

0

5

1990 2000 2010

Occ % Change

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 07/2018


While ADR Growth Is Steady

-3.4

-6.7

-9.7

1.1

6.8 7.5

2.4

-10

-5

0

5

1990 2000 2010

Occ % ChangeADR % Change

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 07/2018


Real ADR Growth (ADR% minus CPI%) Now Hovers Around 0%

-10

-5

0

5

1990 2000 2010

Total U.S., Real ADR % Change (ADR minus CPI), by quarter, Q1/1990 – Q2/2018


101 Consecutive Months of RevPAR Growth!!!

-25

-15

-5

5

15

1990 2000 2010

Total U.S., RevPAR % Change, 1/1990 – 07/2018

56 Months 101 Months111 Months


RevPAR Growth: Erratic Monthly Numbers, But Overall Trend Is Steady

0

2

4

6

2016 2017 2018

Monthly 12MMA

Dec

*Total U.S., RevPAR % Change by month and 12 MMA, 1/2016 – 07/2018

Dec

Oct

Oct


This Expansion Cycle Fueled by High Demand, Low Supply

Cycle Period:Dec. 1991 –

Mar. 2001

Mar. 2010 –

July 2018

Length (months): 111 101

Avg. Monthly Supply Growth: 2.4 1.0

Avg. Monthly Demand Growth: 2.6 3.4

Avg. Monthly ADR Growth: 4.2 3.4

Avg. Monthly RevPAR Growth: 4.4 5.9


Class Review YTD


GDP Growth Spurs Healthy Demand Growth Across All Classes

2.2 2.1

4.5

3.8

0.3

-0.3

3.1

2.4

5.45.1

1.6

0.6

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

Supply % Change

Demand % Change

*Supply / Demand % Change, by Class, July 2018 12MMA


Excellent Year For High and Low End Hotels

(… Good For All Others)

0.80.3

0.91.2 1.3

0.9

2.2

1.6

1.91.7

2.6 3.3


ADR % Change

Occ % Change

*RevPAR % Change by Contribution of OCC / ADR % Change, by Class, July 2018 12MMA


Strong Demand Drives Stellar Occupancy Results

71.472.8 72.6

68.1

60.958.8

70.872.6 72.0

67.3

60.258.3


2018 2017

*OCC %, by Class, July 2018 & 201712MMA


Segmentation


Transient Performance: ADR Growth Seems To Accelerate

3.0%

1.9%

0%

1%

2%

3%

4%

Jan-17 Jan-18

Demand % Change

ADR % Change

*Transient Demand and ADR % Change, 12 MMA, 1/2017 – 07/2018


Group Performance: Group Demand Growth Is Finally Positive(-ish)

0.9%

1.9%

-2%

-1%

0%

1%

2%

3%

4%

Jan-17 Jan-18

Demand % Change

ADR % Change

*Group Demand and ADR % Change, 12 MMA, 1/2017 – 07/2018

Easter Shift

Jewish Holiday Shift Easter Shift


2.7 2.8

0.9

2.1

H1 2017 H1 2018

Transient

Group

First Half Segmentation Demand Growth: Groups Finally Return(?)

*Segmentation Demand % Change, H1 2017 vs 2018


First Half Segmentation ADR Growth: Transient Accelerates!

1.4

2.6

2.2 2.1

H1 2017 H1 2018

Transient Group

*Segmentation ADR % Change, H1 2017 vs 2018


Markets


YTD Market Performance: Leisure Demand Seems To Allow For Pricing Power

Market OCC % ADR % Change Influenced By

Miami/Hialeah, FL 77.4 7.9 Leisure and Group Demand

Nashville, TN 73.6 5.8 Bachelorette Parties (+4.7%)

Orlando, FL 79.6 5.7 Leisure Demand (+4.7%)

Atlanta, GA 70.3 4.3 Leisure and Group Demand

San Francisco/San Mateo, CA 82.4 4.0 Moscone Is Back

*ADR % Change and absolute OCC in Top 25: 5 Best / 5 Worst Performing ADR % Markets, 12MMA July 2018

Philadelphia, PA-NJ 70.5 1.2 Demand Shift (+4.8%)

Phoenix, AZ 68.9 1.2 Demand Shift (+5.3%)

Oahu Island, HI 84.2 1.2 International? ($236 ADR)

Boston, MA 74.5 -0.3 Supply + Group Shift ($195 ADR)

Washington, DC-MD-VA 71.8 -1.4Inauguration / Women’s March

Comp


In Construction:

Vertical construction on the physical building has begun.

Final Planning:

Construction will begin within the next 12 months.

Planning:

Construction will begin in more than 13 months.

Under Contract

Pipeline


US Pipeline: Lack of In Construction Rooms Growth Aids Healthy Industry Results

Phase 2018 2017 % Change

In Construction 190 188 0.8%

Final Planning 223 219 2.0%

Planning 195 183 5.8%

Under Contract 608 591 2.8%

*Total US Pipeline, by Phase, ‘000s Rooms, July 2018 and 2017


Declining Number of I/C Rooms Will Help Overall Performance

-10

-5

0

5

10

15

20

25

30

35

150

175

200

2017 2018

Rooms ('000s) (LHS)

% Change YoY (RHS)

*Total U.S Pipeline, Rooms In Construction and % Change from Same Month Prior Year, 1/2017 – 7/2018

Rooms (000s)% Change

© 2018 STR. All Rights Reserved. 28*Total US Pipeline; Rooms In Construction, in ‘000s; 01/2006 – 07/2018

0

50

100

150

200

250

2006 2008 2010 2012 2014 2016 2018

Low: May ‘11

50K

July ‘18

190K

High:

Dec ‘07

211K

21K

I/C Pipeline Is Leveling Off Below Prior Peak

Th

ou

san

ds


Limited Service Construction Is The Name Of The Game

7.7

23.4

59.7 60.3

14.8

2.2

22.1

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated

*US Pipeline, Rooms In Construction , ‘000s Rooms, by Scale, July 2018

72%


Large Markets Grow Rapidly

Market Rooms In Construction % Of Existing

Nashville, TN 5,210 12%

New York, NY 13,389 11%

Denver, CO 4,516 9%

Dallas, TX 6,337 7%

Seattle, WA 3,128 7%

*US Pipeline, Rooms I/C and as % of Existing Supply, Largest % In Top 26 Markets, July 2018


Some Smaller MSAs Report Rapid Growth

MSA Rooms I/C % Of Existing

Grand Rapids-Wyoming, MI 1,451 14%

Austin-Round Rock, TX 3,957 10%

Savannah, GA 1,531 10%

San Jose-Sunnyvale-Santa Clara, CA 2,636 10%

Fresno, CA 752 9%

Portland-Vancouver-Hillsboro, OR-WA 2,434 8%

Charleston-North Charleston, SC 1,717 8%

North Port-Sarasota-Bradenton, FL 793 8%

*US Pipeline, Rooms I/C and as % of Existing Supply, Largest % In Top 110 MSAs, July 2018


Pipeline (’000s rooms): Top 26 Markets Have 46% Of I/C Rooms

87.4

102.993.3

130.5

69.2

125.3

Top 26 Markets Rest of the US

In Construction

Final Planning

Planning

*US Pipeline, Rooms (‘000s), Top 26 Markets vs. All Other Markets, July 2018


Forecast


Notable Calendar Shifts Impacting Lodging

Performance Data in 2018:

Easter: Shift from April to March (also affects Q1/Q2)

Election Day 11/6: Likely low room demand the night before

Halloween: Shift from TUE to WED, likely impacting full week

Notable Market Level Events / Comps:

Super Bowl: From Houston To Minneapolis

San Francisco: Moscone Center Reopened, easy comps Q2/Q3

Washington, D.C.: Inauguration & Women’s March (January 2017)

Houston: Hurricane Harvey – October and all of Q4 2017

Florida: Hurricane Irma – October and all of Q4 2017

California: Wildfires in Q4 2017


Total United StatesKey Performance Indicator Outlook (% Change vs. Prior Year)

2018F – 2019F

Outlook

Metric2017

Actual

2018

Forecast

2019

Forecast

Supply 2.0% 1.9%

Demand 2.6% 2.1%

Occupancy 65.9% 0.6% 0.2%

ADR $127 2.6% 2.4%

RevPAR $83 3.2% 2.6%


Total United StatesChain Scale Key Performance Indicator Outlook

2018F by Chain Scale

2018 Year End Outlook

Chain ScaleOccupancy

(% chg)

ADR

(% chg)

RevPAR

(% chg)

Luxury 0.9% 3.0% 3.9%

Upper Upscale 0.1% 2.2% 2.4%

Upscale -0.1% 2.1% 2.0%

Upper Midscale 0.2% 2.0% 2.2%

Midscale 0.7% 2.6% 3.3%

Economy 0.6% 2.7% 3.3%

Independent 0.8% 2.8% 3.6%

Total United States 0.6% 2.6% 3.2%


Total United StatesChain Scale Key Performance Indicator Outlook

2019F by Chain Scale

2019 Year End Outlook

Chain ScaleOccupancy

(% chg)

ADR

(% chg)

RevPAR

(% chg)

Luxury -0.1% 2.3% 2.3%

Upper Upscale 0.0% 2.4% 2.4%

Upscale -0.1% 2.2% 2.1%

Upper Midscale 0.0% 2.1% 2.1%

Midscale 0.1% 2.1% 2.1%

Economy 0.2% 2.1% 2.3%

Independent 0.2% 2.3% 2.5%

Total United States 0.2% 2.4% 2.6%


2018 Forecast Percent Change

Top 25 Markets vs Rest Of United States

-0.1

0.9

2.6 2.62.5

3.5

Top 25 Markets Rest of US

Occupancy ADR RevPAR

39

Forecast Summary (STR as of August 2018, PWC as of May 2018 and CBRE as of February 2018)

2018 as

Supply 2.0% 2.0% 2.0%

Demand 2.6% 2.1% 2.4%

Occupancy 0.6% 0.1% 0.4%

ADR 2.6% 2.7% 2.6%

RevPAR 3.2% 2.8% 3.0%

2019

Supply 1.9% 1.9% 1.9%

Demand 2.1% 1.9% 1.9%

Occupancy 0.2% 0.0% -0.1%

ADR 2.4% 2.0% 2.8%

RevPAR 2.6% 2.0% 2.8%


Fort Lauderdale


Fort Lauderdale Performance: Strong ADR Drives RevPAR

+2.1% +2.6%

+0.5%

+7.8% +8.3%

+10.5%

11.3M

Supply

8.8M

Demand

77.5%

Occupancy

$150

ADR

$116

RevPAR

July, 2018 12MMA, FLL Market

$1.3B

Revenue


Florida Market Overview

US

1.1%

2.4%

Florida

2.6%

5.0%

Fort Lauderdale

0.5%

7.8%

Occ

ADR

US, Florida, FLL Markets, July 2018 12MMA


Demand Is Now Outpacing Supply

2.1

2.6

-4

-3

-2

-1

0

1

2

3

4

2015 2016 2017 2018

Supply Demand

FLL Market, Supply/Demand Percent Change, TTM Jan 2005 – Jul 2018


Occupancy Steady; ADR Soaring

0.5

7.8

-4

-2

0

2

4

6

8

10

2015 2016 2017 2018

OCC ADR

FLL Market, Occupancy/ADR Percent Change, TTM Jan 2005 – Jul 2018


Big Supply Changes:

Demand Kept Up Except Midscale

-8

0

8

16

24

32

Luxury Upper Upscale Upscale Upper

Midscale

Midscale Economy

Supply Demand

FLL Market Classes, Supply / Demand % Change, MMA July 2018


Big Supply Changes:

Demand Kept Up Except Lower Midscale

-8

0

8

Luxury Upper Upscale Upscale Midscale Lower

Midscale

Economy

Supply Demand

FLL Market Classes, Supply / Demand % Change, MMA July 2018


Occupancy/ADR Impact on RevPAR Vary by Class

-10

-5

0

5

10

Luxury Upper Upscale Upscale Midscale Lower

Midscale

Economy

Occupancy ADR

FLL Market Classes, Occupancy / ADR % Change, MMA July 2018


Midscale and Economy Achieve Double Digit RevPAR Growth

3.1

5.96.9

13.1

2.3

10.5

Luxury Upper Upscale Upscale Midscale Lower Midscale Economy

FLL Market Classes, RevPAR % Change, MMA July 2018


Segmentation


2018 Transient Demand Just Barely Ahead of 2017

0

75,000

150,000

225,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Transient Demand 2018 Transient Demand 2017

Occ

up

ied

Ro

om

Nig

hts

*FLL Market Transient Luxury/Upper Upscale Rooms Sold, by month January 2017 - July 2018

0.6%

Jul YTD


2018 Transient Demand Just Barely Ahead of 2017

75,000

125,000

175,000


Transient Demand 2018 Transient Demand 2017

Occ

up

ied

Ro

om

Nig

hts


0.6%

Jul YTD


2018 Transient Demand For Aug – Dec More Positive(?)

75,000

125,000

175,000


Transient Demand 2018 Transient Demand 2017 Transient Demand 2016

Occ

up

ied

Ro

om

Nig

hts


0.6%

Jul YTD


2018 Group Demand Strong: Spring Holiday Shift Impacts

0

20,000

40,000

60,000

80,000

100,000


Group Demand 2018 Group Demand 2017

Occ

up

ied

Ro

om

Nig

hts

*Tucson Market Luxury/Upper Upscale Group Rooms Sold, by month January 2017 - July 2018

1.9%

Jul YTD

Easter Sunday: April 1, 2018 April 16, 2017



40,000

60,000

80,000


Group Demand 2018 Group Demand 2017

Occ

up

ied

Ro

om

Nig

hts

*Tucson Market Luxury/Upper Upscale Group Rooms Sold, by month January 2017 - July 2018

1.9%

Jul YTD

Easter Sunday: April 1, 2018 April 16, 2017



40,000

60,000

80,000


Group Demand 2018 Group Demand 2017 Group Demand 2016

Occ

up

ied

Ro

om

Nig

hts

*FLL Market Luxury/Upper Upscale Group Rooms Sold, by month January 2017 - July 2018

1.9%

Jul YTD

Easter Sunday: April 1, 2018 April 16, 2017 March 26, 2016


Fort Lauderdale Submarkets

Fort Lauderdale/

Beach

West Broward/Plantation

Hollywood/Airport

Coral Springs/

Pompano Beach


Supply/Demand Growth Across 3 of 4 Submarkets;

West Broward Supply/Demand Declines

-2

-1

0

1

2

3

4

5

6

FLL Market Coral

Springs/Pompano

Beach

Fort

Lauderdale/Beach

Hollywood/Airport West

Broward/Plantation

Supply Demand

FLL and Submarkets, Supply / Demand % Change, TTM July 2018


Submarkets Post Similar Occupancy and Different ADR

0

10

20

30

40

50

60

70

80

90

$0

$50

$100

$150

$200

$250

FLL Market Coral

Springs/Pompano

Beach

Fort

Lauderdale/Beach


Broward/Plantation

ADR Occupancy

FLL and Submarkets, Actual ADR/Occupancy, TTM July 2018


Submarket Changes Similar to FLL Overall

(Except Hollywood/Airport)

-2

0

2

4

6

8

10

FLL Market Coral

Springs/Pompano

Beach

Fort

Lauderdale/Beach


Broward/Plantation

Occ ADR RevPAR

FLL and Submarkets, % Change, MMA July 2018


In Construction:

Vertical construction on the physical building has begun.

Final Planning:

Construction will begin within the next 12 months.

Planning:

Construction will begin in more than 13 months.

Under Contract

Pipeline


Fort Lauderdale Market Room Supply and Pipeline


Fort Lauderdale Market Pipeline


Property Rooms Open

1. The Dalmar A Tribute Portfolio Hotel 209 Oct ’18

2. Element Downtown 114 Oct ’18

3. Courtyard Downtown 120 Apr ’19

4. Gale Boutique Hotel & Residences 96 Oct ’18

5. Four Seasons 148 Dec ‘19

6. Wyndham Garden Hotel Airport & Cruise Port 142 Sep ’19

7. Staybridge Suites Airport 104 Mar ’19

8. Costa Hollywood 304 Oct ’18

9. Fairfield Inn & Suites Northwest 110 Sep ’19

10. Springhill Suites SW Miramar 125 Nov ’18

11. Residence Inn Coconut Creek 113 Apr ‘19

11 Properties In Construction


Fort Lauderdale MarketKey Performance Indicator Outlook (% Change vs. Prior Year)

2018F – 2019F

Fort Lauderdale Outlook

July 2018 12MMA

(% change)

2018

Forecast

2019

Forecast

Supply 2.1% ↑↑↑↑ ↑↑↑↑

Demand 2.6% ↑↑↑↑ ↑↑↑↑

Occupancy 0.5% = ↓↓↓↓

ADR 7.8% ↑↑↑↑↑↑↑↑ ↑↑↑↑

RevPAR 8.3% ↑↑↑↑↑↑↑↑ ↑↑↑↑


What Do Meeting

Planners Think?


% of meeting

planners rating

item as “very

important”

Source: STR DestinationMAP 2017


Take Aways

US

• Industry continues to set records

• Most growth will come from ADR

• Transient continues to dominate

• Forecast is good

Fort Lauderdale

• New supply was easily absorbed by increased demand

• Luxury hotel class saw significant increases

• Group business booming in Fort Lauderdale (unlike the US overall)

• Pipeline continues to grow; Challenge to continue to increase demand

Questions?

Presentation is available for download.

To view this presentation, click “STR Data Presentations”

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© 2018 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.

Hotel Industry Overview - Cloudinary · 2018-09-04 · Excellent Year For High and Low End Hotels...

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Transcript of Hotel Industry Overview - Cloudinary · 2018-09-04 · Excellent Year For High and Low End Hotels...