Southern Lodging Summit 2018

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Southern Lodging Summit 2018 U.S. & Memphis Hotel Industry Performance Amanda W. Hite President & CEO ahite@str.com @HiteAmanda 2018 STR, Inc. All Rights Reserved.

1 Southern Lodging Summit 2018 U.S. & Memphis Hotel Industry Performance Amanda W. Hite President & 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.

3 July 2018 RevPAR +1.8% ADR +2.0% Transient RevPAR +1.2% Group RevPAR +1.0% Strongest Monthly Room Demand Ever Recorded 120 Million In Construction Rooms +0.8% July 2018, Total US Results 2018 STR. All Rights Reserved. 3

5 YTD July 2018: Another Strong Year In The Making Highest Ever? % Change Room Supply 2.0% Room Demand 2.9% Occupancy 67.1% 0.8% ADR $ % RevPAR $87 3.5% Room Revenue 5.6% Total US Results, July 2018 YTD 2018 STR. All Rights Reserved. 5

10 This Expansion Cycle Fueled by High Demand, Low Supply Cycle Period: Dec Mar Mar June 2018 Length (months): Avg. Monthly Supply Growth: Avg. Monthly Demand Growth: Avg. Monthly ADR Growth: Avg. Monthly RevPAR Growth: STR. All Rights Reserved. 10

Class: Strong Demand Growth For Luxury And Economy Supply % Change Demand % Change 4.6 5.1 4.7 3.4 3.9 2.2 2.2 2.4 1.3 0.4 0.

12 Class: Strong Demand Growth For Luxury And Economy Supply % Change Demand % Change Luxury Upper Upscale Upscale Upper Midscale Midscale Economy -0.2 *Supply / Demand % Change, by Class, July 2018 YTD 2018 STR. All Rights Reserved. 12

Class: Higher Occupancy Growth Spurs Higher ADR Growth 2.9 ADR % Change Occ % Change 2.7 3.2 2.0 2.1 1.8 1.2 0.

13 Class: Higher Occupancy Growth Spurs Higher ADR Growth 2.9 ADR % Change Occ % Change Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *RevPAR % Change by Contribution of OCC / ADR % Change, by Class, July 2018 YTD 2018 STR. All Rights Reserved. 13

17 Group Performance: Group Demand Growth Is Finally Positive(-ish) 4% 3% 2% Easter Shift 1% 0% -1% -2% Jan-17 Demand % Change ADR % Change Jewish Holiday Shift Jan-18 Easter Shift *Group Demand and ADR % Change, 12 MMA, 1/ / STR. All Rights Reserved. 17

21 YTD Market Performance: Leisure Demand Seems To Allow For Pricing Power Market OCC % ADR % Change Influenced By Miami/Hialeah, FL Leisure and Group Demand Minneapolis/St Paul, MN-WI Super Bowl LII Orlando, FL Leisure Demand San Francisco/San Mateo, CA Group Demand & Easy Comp Atlanta, GA Denver, CO Houston, TX St Louis, MO-IL Boston, MA Washington, DC-MD-VA Inauguration / Women s March Comp *ADR % Change and absolute OCC in Top 25: 5 Best / 5 Worst Performing ADR % Markets, YTD July STR. All Rights Reserved. 21

23 US Pipeline: Lack of In Construction Rooms Growth Aids Healthy Industry Results Phase % Change In Construction % Final Planning % Planning % Under Contract % *Total US Pipeline, by Phase, 000s Rooms, July 2018 and STR. All Rights Reserved. 23

Limited Service Construction Is The Name Of The Game 72% 59.7 60.3 7.7 23.4 14.8 2.2 22.

25 Limited Service Construction Is The Name Of The Game 72% Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated *US Pipeline, Rooms In Construction, 000s Rooms, by Scale, July STR. All Rights Reserved. 25

26 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 STR. All Rights Reserved. 26

27 Some Smaller MSAs Report Rapid Growth MSA Rooms In Construction % Of Existing Grand Rapids-Wyoming, MI (MSA ) 1,451 14% Austin-Round Rock, TX (MSA ) 3,957 10% Savannah, GA (MSA ) 1,531 10% San Jose-Sunnyvale-Santa Clara, CA (MSA ) 2,636 10% Fresno, CA (MSA ) 752 9% Portland-Vancouver-Hillsboro, OR-WA (MSA ) 2,434 8% Charleston-North Charleston, SC (MSA ) 1,717 8% North Port-Sarasota-Bradenton, FL (MSA ) 793 8% *US Pipeline, Rooms I/C and as % of Existing Supply, Largest % In Top 110 MSAs, July STR. All Rights Reserved. 27

29 Supply outpacing Demand % Change Hotels 253 Rooms 23,506 Room Supply 2.0% Room Demand 0.2% Occupancy 65.6% -1.7% A.D.R. $98 2.3% RevPAR $64 0.5% YTD July 2018; Memphis, TN 2018 STR. All Rights Reserved. 29

31 Memphis Pipeline: 3,743 / 23,506= 15.9% Rooms In Constr. Final Planning Planning Upper Upscale Upscale Upper Midscale Midscale Economy 52 Independent Total 1,410 (6%) 1, STR. All Rights Reserved. 31

33 Selected Downtown Hotels Residence Inn Memphis Downtown Madison Hotel La Quinta Inns & Suites Memphis Downtown Westin Memphis Beale Street Ascend Collection Hotel Napoleon Courtyard Memphis Downtown River Inn Of Harbor Town Hampton Inn Suites Beale Street The Peabody Memphis Sheraton Hotel Memphis Downtown Springhill Suites Memphis Downtown Holiday Inn Memphis Downtown Beale Street Sleep Court Square Memphis Comfort Inn Downtown Memphis Doubletree Hotel Memphis Downtown Crowne Plaza Memphis Downtown Big Cypress Lodge 2018 STR. All Rights Reserved. 33

34 July 2017 YTD: Strong Demand Growth & All KPIs At Record Levels % Change Hotels 17 Rooms 3,075 Room Supply 2.0% Room Demand -2.5% Occupancy 74% -4.3% A.D.R. $ % RevPAR $ % YTD July 2018; Selected Downtown Memphis Hotels 2018 STR. All Rights Reserved. 34

Strong Weekends Continue 12 months end June 2017 84.5 12 months end June 2018 80.5 81.8 79.8 81.9 77.0 75.2 77.9 77.6 74.

37 Strong Weekends Continue 12 months end June months end June Tuesday Wednesday Thursday Friday Saturday *Selected Downtown Hotels Occupancy % by Selected Day of Week, 12 Months ending July 2017 & STR. All Rights Reserved. 37

Healthy ADR Push 12 months end July 2017 12 months end July 2018 $157 $159 $158 $152 $153 $149 $163 $169 $167 $173 Tuesday Wednesday Thursday

38 Healthy ADR Push 12 months end July months end July 2018 $157 $159 $158 $152 $153 $149 $163 $169 $167 $173 Tuesday Wednesday Thursday Friday Saturday *Selected Downtown Hotels Occupancy % by Selected Day of Week, 12 Months ending July 2017 & STR. All Rights Reserved. 38

41 Total United States Key Performance Indicator Outlook (% Change vs. Prior Year) 2018F 2019F Outlook Metric 2018 Forecast 2019 Forecast Supply 2.0% 1.9% Demand 2.6% 2.1% Occupancy 0.6% 0.2% ADR 2.6% 2.4% RevPAR 3.2% 2.6% 2018 STR. All Rights Reserved. 41

42 Total United States Chain Scale Key Performance Indicator Outlook 2018F by Chain Scale 2018 Year End Outlook Chain Scale Occupancy (% 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% 2018 STR. All Rights Reserved. 42

Total United States Chain Scale Key Performance Indicator Outlook 2019F by Chain Scale 2019 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (% chg) Luxury -0.1% 2.3% 2.

43 Total United States Chain Scale Key Performance Indicator Outlook 2019F by Chain Scale 2019 Year End Outlook Chain Scale Occupancy (% 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 STR. All Rights Reserved. 43

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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.

44 Questions? Presentation is available for download. To view this presentation, click STR Data Presentations from the drop-down menu on 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

Hotel Industry Overview Lodging Conference Ali Hoyt Senior Director, Consulting and Analytics ahoyt@str.com 2018 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this