Market Updates and Stories - Convention Management · Mainland Chinese Key Outbound Countries...
Transcript of Market Updates and Stories - Convention Management · Mainland Chinese Key Outbound Countries...
© 2019 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.
Market Updates and StoriesNew Zealand Hotel Industry Conference 2019
Jesper Palmqvist | Area Director Asia Pacific | STR
Cordis Auckland 10 June 2019
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General trend shows slowdown
Total APAC, Supply & Demand Growth, R12 May 2018 – 2019
2018 2019
Supply Demand
2018 2019
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2018 shifted growth to softer in generalMany varying reasons at play
APAC Selected Key Countries, RevPAR Growth, FY 2018, Local Currency
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2019 by May provided additional movements
APAC Selected Key Countries, RevPAR Growth, YTD May 2019, Local Currency
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Many things affecting destinations
Economics
Source markets
Tourism growth
GeopoliticsInfra-
structure
Master planning
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With arrivals growth slowing down in paceR12 April 2014 – 2019, Source: Stats NZ
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It’s not across the board – US growthNZ Top 5 Markets (Excluding Australia), R12 April 2017 – 2019, Source: Stats NZ
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Arrivals Seasonality – Jan and April new heights – peak slightly behindGlass half full or half empty? Where do you prefer it to grow faster?
New Zealand IVAs, FY 2016 – 2019 Apr by month, Source: Stats NZ
150
200
250
300
350
400
450
500
550
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Tho
usa
nd
s
2016 2017 2018 2019
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Mainland Chinese Key Outbound Countries – APAC, FY 2018, Source: PATA & Tourism Authorities
7.4% 13.9% 23.9% 14.9% -8.1% 2.1% 67.2% 5.5% 29.6%0
2
4
6
8
10
12
Thailand Japan Vietnam SouthKorea
Singapore Indonesia Cambodia Australia Philippines
Mill
ion
sStrong movements in Chinese OUTBOUND traffic
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Chinese travellerstourism
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InfrastructureGrowth paceState-owned
domestic
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So last year I said that 2019 will be a very active yearWith over 8,000 new rooms across the country
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And the results are telling – Rooms have openedWhile Demand Growth dropped to the lowest level since 2013
Total New Zealand, Supply & Demand Growth, R12 May 2017 – 2019
0.7% 0.7% 2.5%1.9% 1.9% 1.0%
2017 2018 2019
Supply Demand
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It’s just not just here. It’s everywhere.Future pipeline is stronger than before
Top 10 APAC, Under Contract Pipeline, by Total Number of Rooms, as of May 2019
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Now: Almost 10,000 rooms are on the wayUpper Tier Classes remains attractive
New Zealand – Under Contract Pipeline by Chain Scale, by Total Number of Rooms, as of May 2019
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Pace? 12% more opening this year – and 40% by end of 2020So it’s a bit less imminent than last year
201912%
40% 2020
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Around 5,000 is expected in Auckland aloneUnder Contract Pipeline, As of 12 June 2019, STR-AMPM Tool for Census & Pipeline
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FrighteningIt’s easy to justput a number up
Total New ZealandRevPAR Growth, YTD May 2019, NZD
YTD May 2019
-3.6%
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Occupancy above 80% - slowdownSupply has slowed growth and the one off boost of 2017’s British and Irish Lions tour
Total New Zealand, Occupancy & ADR Performance, R12 May 2014 – 2019, NZD
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Growth pace shift looks very dramaticConsider the earlier fast pace – that was never long-term sustainable
Total New Zealand, Occupancy & ADR Growth, R12 January 2016 – May 2019, NZD
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Total New Zealand, Absolute Occupancy (%), 2016 – May 2019
65%
70%
75%
80%
85%
90%
95%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2015 2016 2017 2018 2019
Seasonality growth: Occupancy2016-2018 very similar – and to be fair, 2019 is not too far off
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Seasonality growth: ADRNo growth during peak (luxury coming) – but it’s holding up
Total New Zealand, ADR (NZD), 2016 – May 2019
$120
$140
$160
$180
$200
$220
$240
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2015 2016 2017 2018 2019
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Seasonality facts
June Joy?Low season is picking up
Peak PushFeb & Nov holding ok
Q3 Question markUnlikely to boost.2020 more likely.
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Quite similar across hotel classesUpper Midscale comes from a different growth curve
Total New Zealand, RevPAR Growth by Class, R12 May 2017 – 2019, NZD
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Reacting to changing market conditionsNew Zealand patters
It is more at property level
Not driven by brandNot driven by classNot driven by location (Ok, Auckland more – but more hotels)
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Over 50% of hotels dropped Occupancy – and 27% in ADR as well
What does it mean with an increased spread of outliers?
Individual hotels data, Occupancy & ADR Growth, R12 May 2019, NZD
30% 21%
21%
+20%
-15%
-20% +30%
27%
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Supply growth expected – but some softer Demand growthWellington and Rotorua – we had slightly higher expectations in rooms sold
Total New Zealand, Supply & Demand Growth by Key Markets, R12 May 2019
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But the real story is in sustaining growth: Rotorua and QueenstownConversely, Christchurch and Auckland could not continue the pace
Total New Zealand, RevPAR Growth by Key Markets, R12 May 2018 – 2019, NZD
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Christchurch | Limited demand drop from terror attacks
Total Christchurch, Demand growth (%), 1 Mar-18Jun 2019, Daily Data
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That supply growth curve will continue to grow
Total Auckland, Supply & Demand Growth, R12 January 2017 – May 2019
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Continues to be driven by transient business
Total Auckland, Transient vs Group Demand, R12 January 2017 – May 2019
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70%
75%
80%
85%
90%
95%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2017 2018 2019 2019 f 2020 f
Auckland Occupancy: Goodbye 80s?
Total Auckland, Occupancy Performance, January 2017 – May 2019
Pressure and some softening also in 2020 expected
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$40 less than last year during High SeasonSome hope for ADR moving forward
Total Auckland, ADR Performance, January 2017 – May 2019, NZD
$170
$190
$210
$230
$250
$270
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2017 2018 2019 2019 f 2020 f
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Weekdays? Same as earlier – weekday holding up better+80% Tuesday through Thursday - Corporate travel holding up
Total Auckland, Occupancy Performance by Day of Week, R12 May 2017 – 2019
Tuesday & Wednesday - There were more busy nights this yearSaturday - there were fewer
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Similarly in ADR – Weekend takes a step back
Total Auckland, ADR Performance by Day of Week, R12 May 2017 – 2019, NZD
Saturday busy nights down 11%. Lower occupancy nights up 1%.
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Across the Tasman
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Contraction also on the other sideNew Supply added in Sydney – Similar conversations around holding rate
Sydney vs Auckland, Occupancy Performance, R12 May 2014 – 2019
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Maintains the smaller difference now established
Sydney vs Auckland, ADR Performance, R12 May 2014 – 2019, AUD, CC
Summary
More markets in Asia are softening
Future pipeline is bigger now across APAC
Shift share to the US? Competition for Chinese is strong.
Over 10,000 rooms in New Zealand
Reminder – Very high earlier – Holding up ok so far
Any rate drop is at hotel level - Not brand, location, class
2019 not looking fab for Q3
Occ to soften 1-2% - Rates should expand to positive RevPAR
Summary
Slowdown
Big Pipe
Arrivals NZ
Busy Building
Rate growth
Pants!
Opportunity
2020 +
© 2019 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.
New Zealand Hotel Industry Conference
Cordis Auckland
2019 June 20
Thank You
Jesper Palmqvist
[email protected] | +65 6800 7850