Atlanta Hotel Performance October 2014 Jan D. Freitag Senior Vice President jan@str.com @jan_freitag 1
2 Agenda Total US Review Chain Scale Markets Segmentation Atlanta Performance 2014 / 2015 Forecast Things To Think About
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Total US Review 4
October 2014 YTD: A Place In The Sun % Change Room Supply* 0.8% Room Demand* 4.5% Occupancy 66% 3.6% A.D.R.* $116 4.6% RevPAR* $77 8.4% Room Revenue* 9.3% October 2014 YTD, Total US Results * All Time High for First 10 Months 5
6 RevPAR Growth YTD: +8.4% Strongest YTD growth EVER!
Quarterly RevPAR % Change: Tremendous Results 2011 2012 2013 2014 8.7 9.2 8.1 8.2 8.0 7.7 7.8 7.8 6.4 6.8 6.4 4.9 5.0 5.5 5.1 Q1 Q2 Q3 Q4 * Total US, RevPAR % Change, by Quarter, Q1 2011 Q3 2014 7
2014 Growth Rates Are Healthy. OCC continues to climb. 6.8% 7.5% 5 4.4% 0-5 OCC % Change ADR % Change -6.7% -10 1990 2000 2010-9.7% Total U.S., ADR & OCC % Change, 12 MMA 1/1990 10/2014 8
Expect More Of The Same: Positive Growth! 15 10 5 0-5 -10 80 Months 31 Mo 56 Months 56 Mo. -15-20 -25 1990 2000 2010 Total U.S., RevPAR % Change, 1/1990 10/2014 9
Chain Scale Review 10
Scales: A Tale of 2 Supply Growth Scenarios Supply % Change Demand % Change 7.1 3.8 3.5 4.6 3.6 4.3 0.9 1.8 1.4 0.6 0.3-0.7 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *Supply / Demand % Change, by Scale, October 2014 YTD 11
Scales: RevPAR Composition is ADR Driven ADR % Change Occupancy % Change 5.0 5.0 4.2 3.9 4.7 5.5 2.4 3.5 4.0 4.3 4.0 0.9 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *RevPAR % Change by Contribution of OCC / ADR % Change, by Scale, October 2014 YTD 12
Scales: Absolute OCC Very High On Upper End 76.5 75.8 75.4 75.8 73.6 73.2 2014 2013 68.4 65.8 60.1 57.6 58.5 56.3 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *OCC %, by Scale, October YTD 2013 & 2014 13
Scales: Absolute ADR Very Strong At The Luxury End 304 288 2014 2013 170 162 128 122 105 101 80 77 57 55 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *ADR $, by Scale, October YTD 2013 & 2014 14
Segmentation 15
Transient ADR Growth Helped By Lack Of Room Availability 6% 5% 4% 3% 2% 1% 0% Demand % Change ADR % Change 2012 2013 2014 *Transient Demand and ADR % Change, 12 MMA, 1/2012 10/2014 16
Group Demand Is Roaring Back. 6% 5% 4% 3% 2% 1% -1% Demand % Change ADR % Change *2013 Easter Comp -2% 2012 2013 2014 *Group Demand and ADR % Change, 12 MMA, 1/2012 10/2014 17
Markets 18
October 2014 YTD ADR % Change in Top 25: 5 Best / 5 Worst Performing Markets & Atlanta Market OCC % ADR % Change Nashville, TN 73.8 13.1 San Francisco/San Mateo, CA 85.5 11.3 Denver, CO 78.1 9.3 Seattle, WA 77.9 8.6 Los Angeles/Long Beach, CA 80.6 7.6 Atlanta, GA 70.0 4.7 New York, NY 85.1 2.5 New Orleans, LA 69.9 2.0 Norfolk/Virginia Beach, VA 57.0 1.7 Philadelphia, PA-NJ 69.3 1.2 Washington, DC-MD-VA 71.2 0.3 19
Atlanta Performance 20
October 2014 YTD: Everything Is Awesome! % Change Room Supply 0% Room Demand 8.5% Occupancy 70% 8.5% A.D.R. $93 4.7% RevPAR $65 13.6% *October 2014 YTD, Atlanta, GA 21
Will Strong OCC Growth Translate Into Stronger Rate Growth? 10 8 6 4 8.0 3.8 2 0-2 -4 OCC % Change ADR % Change -6-8 -10 2010 2011 2012 2013 2014 *Atlanta, GA, ADR & OCC % Change, 12 MMA 1/2010 10/2014 22
$ 90 OCC Has Fully Recovered. ADR At Prior Peak 91 66.5 67.7% @ $91 % 66.0 86 82 82 62.0 78 ADR $ (LHS) 74 OCC % (RHS) 53.0 70 2002 2004 2006 2008 2010 2012 2014 58.0 54.0 50.0 *Atlanta, GA, ADR $ & OCC %, 12 MMA 1/2002 9/2014 23
20 15 10 5 0-5 -10-15 Expect More Of The Same: Positive RevPAR Growth 18.7 11.7-20 -19.0 2002 2004 2006 2008 2010 2012 2014 *Atlanta, GA, RevPAR % Change, 1/2002 10/2014 24
Transient ADR Growth Rapidly Accelerates 10% 8% Demand % Change ADR % Change 6% 4% 2% 0% 2012 2013 2014 *Atlanta, GA, Transient Demand and ADR % Change, 12 MMA, 1/2012 10/2014 25
Group ADR Growth Still Lacking (Despite Demand Growth) 10% 8% 6% Demand % Change ADR % Change 4% 2% 0% -2% -4% -6% 2012 2013 2014 *Atlanta, GA, Group Demand and ADR % Change, 12 MMA, 1/2012 10/2014 26
October 2014 YTD ADR % Change in Atlanta Submarkets Market OCC % ADR % Change Atlanta Downtown-Midtown+ 71.7 2.1 Atlanta Downtown+ 71.0 2.2 Atlanta Midtown+ 73.5 2.0 Atlanta Northeast, GA 71.7 4.7 Atlanta Northwest, GA 63.2 5.7 Atlanta Alpharetta/North, GA 71.5 6.5 Atlanta Perimeter Center/Roswell, GA 75.4 8.8 Atlanta East 67.8 6.6 Atlanta Airport, GA 74.0 5.3 Atlanta South, GA 63.1 5.8 Atlanta Galleria/Marietta, GA 70.6 7.6 Atlanta Buckhead+ 76.9 5.7 Atlanta West+ 58.9 4.3 Atlanta Chamblee/Norcross, GA 71.4 8.0 27
Construction In Top 26 Markets: 16 With 2%+ Of Supply Market Rooms U/C % Of Existing Las Vegas, NV 0 0% Norfolk-Virginia Beach, VA 104 0% Tampa-St Petersburg, FL 211 0% St Louis, MO-IL 182 0% Oahu Island, HI 144 0% Philadelphia, PA-NJ 384 1% San Francisco/San Mateo, CA 453 1% Atlanta, GA 883 1% Orlando, FL 1,200 1% Los Angeles-Long Beach, CA 1,431 1% Detroit, MI 677 2% Minneapolis-St Paul, MN-WI 671 2% Phoenix, AZ 1,160 2% Dallas, TX 1,875 2% New Orleans, LA 922 2% Chicago, IL 2,923 3% Boston, MA 1,379 3% Nashville, TN 1,107 3% Anaheim-Santa Ana, CA 1,707 3% San Diego, CA 1,880 3% Denver, CO 1,350 3% Washington, DC-MD-VA 3,440 3% Miami-Hialeah, FL 2,653 5% Seattle, WA 2,302 6% Houston, TX 4,428 6% New York, NY 12,962 11% *US Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, October 2014 28
2014 / 2015 Forecast 29
U.S. Forecast summary (% Change) 2015 Supply 1.3 1.3 1.4 Demand 2.4 2.2 2.5 Occupancy 1.1 0.9 1.1 ADR 5.0 5.7 6.2 RevPAR 6.2 6.7 7.4 Updated 11/10/14 9/5/14 11/10/14 30
2015 Year End RevPAR Forecast Top 25 US Markets, November 2014 Forecast (Markets sorted alphabetically) 0% to 5% 5% to 10% New York Anaheim Norfolk Atlanta Philadelphia Boston Chicago Dallas Denver Detroit Houston Los Angeles Miami Minneapolis Nashville New Orleans Oahu Orlando Phoenix San Diego San Francisco Seattle St. Louis Tampa Washington Atlanta: +5.3% 31
What To Watch 32
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http://www.hotelnewsnow.com/article/14346/the-impact-of-the-sharing-economy-on-hotels 37
https://www.airbnb.com/help/article/653 38
www.hotelnewsnow.com Click on Data Presentations 39