U.S. Hotel Industry Performance - ALIS 2016 Edition - Jan D. Freitag Senior Vice President jan@str.com @jan_freitag 1
2016 What Wall Street Expects: What STR Expects: 2
What to say to an analysts who does not believe our 2016 +5.0% RevPAR forecast: 3
Agenda Total US Review Scale Review Segmentation Markets Pipeline 2016 / 2017 Forecast AirBnB 4
www.hotelnewsnow.com Click on Data Presentations 5
Total US Review 6
Full Year 2015: Decelerating Occ / ADR Growth Rates % Change Room Supply 1.1% Room Demand 2.9% Occupancy 65.6% 1.7% A.D.R. $120 4.4% RevPAR $79 6.3% Room Revenue 7.4% December 2015 YTD, Total US Results 7
Total US RevPAR: NYC and Houston Dragged Total US : +6.3% NYC: -1.7% Houston: -3.3% Total US excluding NYC & Houston: +6.9% *RevPAR % Change December 2015 YTD 8
Quarterly RevPAR % Change: Slowing Down Off Record Highs 2012 2013 2014 2015 8.0 7.7 7.7 7.9 9.1 8.9 6.1 6.6 4.7 6.5 5.0 5.4 5.9 6.4 4.9 4.8 Q1 Q2 Q3 Q4 * Total US, RevPAR % Change, by Quarter, Q1 2012 Q4 2015 9
Supply Growth Now Back Over 1%. Demand Growth Slows. 8 7.7 4 0-0.8-4 Supply % Change -4.7-8 Demand % Change -7.1 1990 2000 2010 Total U.S., Supply & Demand % Change, 12 MMA 1/1990 12/2015 10
RevPAR Growth: It s Going To Be OK (but Not Great) 15 10 5 0-5 -10 80 Months 31 Mo 56 Months 70 Mo. -15-20 -25 1990 2000 2010 Total U.S., RevPAR % Change, 1/1990 12/2015 11
Why Wall Street Is So Blue: Growth of RevPAR Growth Is Slowing Growth of Growth RevPAR % Change 65% 55% 45% 35% 25% 15% 5% -5% -15% -25% RevPAR % Change Growth of Growth Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 14% 9% 4% -2% -7% Total U.S., RevPAR % Change and 12MMA Change of Change, 1/2015 12/2015 12
Chain Scale Review 13
Scales: Demand Growth Healthy. Upscale Supply Increases Supply % Change Demand % Change 4.8 4.1 3.3 2.0 2.1 1.2 1.3 1.3 1.6 0.7 0.1 0.2 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *Supply / Demand % Change, by Scale, December 2015 YTD 14
Scales RevPAR Composition: ADR Driven ADR % Change Occupancy % Change 4.3 4.2 5.0 4.2 4.0 4.9 0.5 0.7 0.7 1.9 2.1 1.4 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *RevPAR % Change by Contribution of OCC / ADR % Change, by Scale, December 2015 YTD 15
Scales: Upper End Hotels Are Very Busy 75.3 75.0 74.2 74.3 73.6 73.8 2015 2014 67.6 66.4 59.5 58.3 58.3 57.5 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *OCC %, by Scale, December YTD 2015 & 2014 16
Segmentation 17
Transient ADR Growth Subsides Despite High Occupancies 6% 5% 4% 3% 2% 1% 0% Demand % Change ADR % Change 2012 2013 2014 2015 *Transient Demand and ADR % Change, 12 MMA, 1/2012 12/2015 18
Group Demand Growth Slows Rapidly 7% 6% 5% Demand % Change ADR % Change 4% 3% 2% 1% -1% -2% 2012 2013 2014 2015 *Group Demand and ADR % Change, 12 MMA, 1/2012 12/2015 19
Markets 20
RevPAR December 2015 YTD: Winner: CA. Loser: Oil Markets. Market RevPAR % Change Market RevPAR % Change Macon/Warner Robbins, GA 18.6 Ohio Area (1.9) San Jose/Santa Cruz, CA 17.3 Houston, TX (3.3) Oakland, CA 15.7 Texas North (4.1) Chattanooga, TN-GA 15.5 West Virginia (4.5) California North Central 14.9 New Mexico South (5.4) Fort Myers, FL 14.7 Augusta, GA-SC (6.7) Knoxville, TN 14.5 Oklahoma Area (10.0) Portland, OR 14.2 Texas South (11.4) Tampa/St Petersburg, FL 13.8 Texas West (19.2) Greenville/Spartanburg, SC 13.7 North Dakota (20.9) *December 2015 YTD RevPAR: Best / Worst Performing Markets 21
December 2015 YTD: High Occ = Higher ADR. (Except in NYC???) Market OCC % ADR % Change Nashville, TN 73.5 8.7 Phoenix, AZ 65.9 8.0 Seattle, WA 76.2 7.8 Tampa/St Petersburg, FL 71.8 7.7 Los Angeles/Long Beach, CA 79.7 7.5 Washington, DC-MD-VA 70.7 3.0 Oahu Island, HI 85.3 3.0 New Orleans, LA 69.7 2.3 Houston, TX 68.5 1.6 New York, NY 84.7-1.6 * December 2015 YTD ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets 22
NYC 23
NYC YTD RevPAR & Occupancy: Full House But No RevPAR Growth RevPAR % Change Occupancy 80.8 81.2 83.7 84.4 84.7 84.7 12.4 6.0 5.8 3.8 2.2-1.7 2010 2011 2012 2013 2014 2015 * NYC RevPAR % Change & Absolut Occupancy, December YTD, by year 24
Houston 25
Houston: Oil Price Predicts Houston Room Demand $105 $95 $85 $75 $65 $55 8.0 6.0 4.0 2.0 0.0-2.0 $45 $35 Crude Oil Futures Price / Barrel (LHS) Demand % Change (RHS) 2014 2015 *Monthly Oil price Future / Barrel vs. Houston, TX Room Demand % Change 1/2014 12/2015 http://www.investing.com/commodities/crude-oil -4.0-6.0 26
Pipeline 27
US Pipeline: Construction Today Will Impact 2016 / 2017 Phase 2015 2014 % Change In Construction 141 120 17% Final Planning 180 122 47% Planning 147 170-13% Under Contract 469 413 14% *Total US Pipeline, by Phase, 000s Rooms, December 2015 and 2014 28
Limited Service Construction Has Been Strong For 2 Years 49.2 48.0 69% 17.7 7.4 11.5 5.3 1.5 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated *US Pipeline, Rooms Under Construction, 000s Rooms, by Scale, December 2015 29
Construction In Top 26 Markets: 20 With 2%+ Of Supply Market Rooms U/C % Of Existing Oahu Island, HI 175 0.6% Norfolk/Virginia Beach, VA 300 0.8% St Louis, MO-IL 407 1.1% Atlanta, GA 1,255 1.3% San Francisco/San Mateo, CA 751 1.5% New Orleans, LA 618 1.6% Orlando, FL 2,600 2.1% Detroit, MI 954 2.3% Las Vegas, NV 3,905 2.3% Phoenix, AZ 1,536 2.5% Chicago, IL 2,964 2.7% Tampa/St Petersburg, FL 1,233 2.8% Washington, DC-MD-VA 3,339 3.1% San Diego, CA 1,951 3.2% Denver, CO 1,794 4.1% Anaheim/Santa Ana, CA 2,328 4.2% Los Angeles/Long Beach, CA 4,240 4.3% Minneapolis/St Paul, MN-WI 1,949 5.0% Boston, MA 2,627 5.0% Philadelphia, PA-NJ 2,343 5.1% Nashville, TN 1,982 5.1% Dallas, TX 4,177 5.2% Seattle, WA 2,232 5.3% Houston, TX 5,710 7.1% Miami/Hialeah, FL 3,920 7.6% New York, NY 14,090 12.0% *US Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, December 2015 30
2016 / 2017 Forecast 31
Notable Calendar Shifts Impacting Lodging Performance Data in 2016: Super Bowl: Easter: Jewish Holidays: From Phoenix to San Francisco From April to March From September to October April and December will have two more Weekend days (Net +) May will have two fewer Weekend days (Net -) Leap Day February 29 th (No Impact To Results) See: http://www.str.com/media/default/documents/str_leap_year_methodology.pdf 32
Total United States Key Performance Indicator Outlook (% Change vs. Prior Year) 2016-2017 Outlook 2016 Forecast 2017 Forecast Supply 1.7% 1.9% Demand 2.3% 2.1% Occupancy 0.6% 0.2% ADR 4.4% 4.3% RevPAR 5.0% 4.5% 33
Total United States Chain Scale Key Performance Indicator Outlook 2016F by Chain Scale 2016 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (% chg) Luxury 0.4% 4.5% 4.9% Upper Upscale 0.5% 4.6% 5.2% Upscale -0.2% 4.5% 4.3% Upper Midscale 0.4% 4.1% 4.5% Midscale 0.5% 3.5% 4.0% Economy 0.9% 3.7% 4.6% Independent 0.6% 4.4% 5.1% Total United States 0.6% 4.4% 5.0% 34
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 0.1% 4.7% 4.8% Upper Upscale 0.1% 4.6% 4.7% Upscale -0.6% 3.8% 3.2% Upper Midscale -0.1% 3.7% 3.6% Midscale 0.6% 4.1% 4.7% Economy 0.4% 3.4% 3.9% Independent 0.3% 4.4% 4.7% Total United States 0.2% 4.3% 4.5% 35
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