NYU International Hospitality Industry Investment Conference · Los Angeles/Long Beach, CA $ 233...

1

© 2017 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.

NYU International Hospitality Industry Investment Conference

Amanda W. HitePresident & CEO

[email protected]

@HiteAmanda

June 5, 2017

2© 2017 STR. All Rights Reserved.

Demand Growth Still Outpacing Supply

Apr TTM 2017, Total US Results

Actual % Change

Room Supply 1.7% p

Room Demand 1.9% p

Occupancy 65.5% 0.2% p

ADR $125 2.9% p

RevPAR $82 3.1% p


Demand Growth Slowing. Supply Growth Increases To 1.7%.

-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 – 4/2017


Occupancy Growth Rapidly Approaching 0%

-3.4

-6.7

-9.7

0.2

6.8 7.5

2.9

-10

-5

0

5

1990 2000 2010

Occ % Change

ADR % Change

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 4/2017


Declining Occupancies and Rising ADRs Are 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: Erratic Monthly Numbers, Overall Trend Is Slowing

0

2

4

6

8

10

2015 2016 2017

Monthly 12MMA

*Total U.S., RevPAR % Change by month and 12 MMA, 1/2015 – 4/2017


U.S. Lodging Industry Revenues and Profits

*Extrapolated using 2016 HOST P&L data. GOP defined as income before management fees and fixed expenses.


The Canary In The Coalmine


Monitoring the Number of Submarkets with Negative RevPAR %

38%

57%

32%

23%

14% 15%

25% 25%29%

33%

23%

70%

54%

47%

8% 8% 8%

14%

63%

97%

18%

9%11%

16%

4%

12%

22%

26%22%

1990 1995 2000 2005 2010 2015

*Submarkets with Negative RevPAR % Change out of all 639 Submarkets, by year 1990 – 2016, and YTD April 2016/17

YTD 2017

YTD 2016


-30.0

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

RevPAR % Change

% Of Submarkets w/negative RevPAR %

Average is 43.5% of Submarkets with Negative RevPAR; U.S. RevPAR turns

*Submarkets with Negative RevPAR % Change out of all 639 Submarkets, by month 1/89 – 4/2017

Turning Point: 43.5%


Segmentation


Transient Performance: ADR Growth Slowing Despite High Occ.

0%

1%

2%

3%

4%

5%

6%

Jan-14 Jan-15 Jan-16 Jan-17

Demand % Change

ADR % Change

*Transient Demand and ADR % Change, 12 MMA, 1/2014 – 4/2017


Group Performance: ADR Growth Still Healthy

-2%

-1%

1%

2%

3%

4%

5%

6%

Jan-00 Jan-00 Jan-00 Feb-00

Demand % Change

ADR % Change

*Group Demand and ADR % Change, 12 MMA, 1/2014 – 4/2017

Easter Shift


2016 Group ADR % Change Varies

Market Group ADR Group ADR % Change

New York, NY $ 358 -1.3

San Francisco/San Mateo, CA $ 291 7.4

Oahu Island, HI $ 256 1.6

Miami/Hialeah, FL $ 254 1.2

Boston, MA $ 244 3.6

Los Angeles/Long Beach, CA $ 233 7.5

San Diego, CA $ 224 3.5

Washington, DC-MD-VA $ 214 4.6

Seattle, WA $ 208 3.5

Anaheim/Santa Ana, CA $ 204 2.8

Group ADR & % Change, Top 10 ADRs in Top 25 markets, full year 2016


Segmentation ADR % Change: Does Transient Set The Tone For The Future?

0%

1%

2%

3%

4%

5%

6%

Jan-15 Jan-16 Jan-17

Transient ADR % Change

Group ADR % Change

*ADR % Change, Transient & Group, 12 MMA, 1/2015 – 4/2017


Markets


April YTD 2017: New Supply Hits NYC, Miami.

Market OCC % ADR % Change Influenced By

Washington, DC-MD-VA 69.0 9.3 Inauguration / Women’s March

Oahu Island, HI 81.9 6.0

Phoenix, AZ 78.1 5.9

San Diego, CA 76.6 4.8

Tampa/St Petersburg, FL 78.7 4.7

Los Angeles/Long Beach, CA 80.1 -0.4 Porter Ranch Gas Leak 2016

New York, NY 80.7 -0.6 New Supply

San Francisco/San Mateo, CA 80.2 -0.7Superbowl L 2016 / Moscone

Center Closed April - August

New Orleans, LA 72.6 -1.2

Miami/Hialeah, FL 81.7 -5.5 New Supply

* April 2017 YTD ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets


Highest and Lowest by ADR

City ADR YTD City ADR YTD

Miami Beach, FL $ 291.24 Wichita, KS $ 85.02

Naples, FL $ 272.28 Knoxville, TN $ 84.42

Washington, DC $ 255.83 Oklahoma City, OK $ 84.01

San Francisco, CA $ 250.78 Mobile, AL $ 82.13

Scottsdale, AZ $ 244.79 El Paso, TX $ 81.50

New York, NY $ 226.66 Bakersfield, CA $ 80.23

Honolulu – Oahu, HI $ 225.10 Albuquerque, NM $ 79.29

Boston, MA $ 220.03 Tulsa, OK $ 79.07

New Orleans, LA $ 189.93 Amarillo, TX $ 73.83

Fort Lauderdale, FL $ 188.29 Laughlin, NV $ 70.54

Out of Top 100 Cities by Supply, ADR, APR YTD

2017


Highest and Lowest by Occupancy

City Occ YTD City Occ YTD

Lake Buena Vista, FL 86.7% Augusta, GA 53.6%

Fort Lauderdale, FL 85.1% Cincinnati, OH 53.6%

Honolulu – Oahu, HI 84.9% Tulsa, OK 53.2%

Orlando, FL 83.1% Omaha, NE 51.8%

Los Angeles, CA 82.2% Wisconsin Dells, WI 47.0%

Miami, FL 82.1% Pigeon Forge, TN 46.7%

New York, NY 81.7% Atlantic City, NJ 45.6%

San Francisco, CA 81.4% Ocean City, MD 43.6%

Miami Beach, FL 81.1% Williamsburg, VA 39.9%

Scottsdale, AZ 80.4% Branson, MO 38.4%

Out of Top 100 Cities by Supply, OCC, APR YTD

2017


Pipeline


New Construction Continues into 2017

Phase 2017 2016 % Change

In Construction 189 161 18%

Final Planning 209 171 23%

Planning 181 174 4%

Under Contract 580 506 15%

Total US Pipeline, by Phase, ‘000s Rooms, Apr 2017 and 2016

22© 2017 STR. All Rights Reserved. *Total US Pipeline; Rooms In Construction, in ‘000s; 1/2006 – 4/2017

0

50

100

150

200

250

2006 2008 2010 2012 2014 2016

Low: May ‘1150K

Apr‘17189K

High:Dec ‘07

211K

22K

I/C Pipeline Is Growing But Still Below Prior PeakTh

ou

san

ds


Rooms In Construction Drop Sequentially (As Does Growth Rate)

0

5

10

15

20

25

30

35

40

150

160

170

180

190

200

2016 2017

Rooms ('000s) (LHS)

% Change YoY (RHS)

*Total U.S Pipeline, Rooms In Construction and % Change from Same Month Prior Year

Rooms (000s)% Change


Where Have All the Full Service Hotels Gone?

8.8

26.4

60.064.3

8.32.0

20.1

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated

*US Pipeline, Rooms In Construction , ‘000s Rooms, by Scale, April 2017

65%


Construction In Top 26 Markets: 10 With 6%+ Of Supply

Market Rooms% of Existing

Supply

New York, NY 15,649 14%

Nashville, TN 4,997 13%

Seattle, WA 5,327 12%

Denver, CO 4,717 10%

Dallas, TX 7,306 9%

Miami/Hialeah, FL 3,399 6%

Los Angeles/Long Beach, CA 5,777 6%

Boston, MA 3,121 6%

Philadelphia, PA-NJ 2,686 6%

Houston, TX 4,813 6%

Top 10 Markets, Rooms Under Construction, Mar 2017


Pipeline Top 26 Markets Have 47% of Rooms In Construction

89.8100.1

79.4

130.2

74.2

106.9

Top 26 Markets Rest of the US

In Construction

Final Planning

Planning

*US Pipeline, Rooms (‘000s), Top 26 Markets vs. All Other Markets, April 2017


2017 / 2018 Forecast


U.S. Air Passengers

SOURCE: Bureau of Transportation Statistics

RECORD

0

100

200

300

400

500

600

700

800

900

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

International

Domestic


National Park Visitation

SOURCE: National Park Service

RECORD

0

50

100

150

200

250

300

350

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

Mill

ion

s


Disposable Income

SOURCE: Bureau of Economic Analysis

0

2

4

6

8

10

12

14

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

Trill

ion

s

RECORD

$$

$

$$$

$

$$


Employment

SOURCE: Bureau of Labor Statistics

0

20

40

60

80

100

120

140

160

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Mar2017

Mill

ion

s

RECORD


Corporate Profits

SOURCE: Bureau of Economic Analysis

$0

$1

$2

$3

$4

$5

$6

$7

$8

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

Trill

ion

s


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

Outlook

2017Forecast

2018Forecast

Supply 2.0% 2.2%

Demand 1.7% 2.0%

Occupancy -0.3% -0.2%

ADR 2.5% 2.7%

RevPAR 2.2% 2.5%


2017 Year End RevPAR ForecastTop North American Markets, May 2017 Forecast (Markets sorted alphabetically)

-5% to 0% 0% to 5% 5% to 10%

Boston, MA Anaheim-Santa Ana, CA Montreal, QC

Dallas, TX Atlanta, GA Seattle, WAHouston, TX Chicago, IL Toronto, ON

Miami-Hialeah, FL Denver, CO Vancouver, BC

Philadelphia, PA-NJ Detroit, MI

San Francisco-San Mateo, CA Los Angeles-Long Beach, CA

Minneapolis-St. Paul, MN-WI

Nashville, TN

New Orleans, LA

New York, NY

Norfolk-Virginia Beach, VA

Oahu Island, HI

Orlando, FL

Phoenix, AZ

San Diego, CA

St. Louis, MO-IL

Tampa-St. Petersburg, FL

Washington, DC-MD-VA


2018 YE RevPAR Forecast May 2017 Forecast (Markets sorted alphabetically)

-5% to 0% 0% to 5% 5% to 10%

Boston, MA Anaheim-Santa Ana, CA Toronto, ON

Miami-Hialeah, FL Atlanta, GA

Chicago, IL

Dallas, TX

Denver, CO

Detroit, MI

Houston, TX

Los Angeles-Long Beach, CA

Minneapolis-St. Paul, MN-WI

Montreal, QC

Nashville, TN

New Orleans, LA

New York, NY

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-St. Petersburg, FL

Vancouver, BC

Washington, DC-MD-VA


Summary

Industry still at record-setting levels, growth rates slowing

Demand growing, group business stagnant

ADR growing only at inflationary levels

Continued Upper Midscale and Upscale supply growth

38

© 2017 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.

Thank You!

Amanda W. HitePresident & CEO

[email protected]

@HiteAmanda

NYU International Hospitality Industry Investment Conference · Los Angeles/Long Beach, CA $ 233...

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