US LODGING INDUSTRY OVERVIEW

Transcription

1 US LODGING INDUSTRY OVERVIEW Mark V. Lomanno President SMITH TRAVEL RESEARCH

2 Presentation Outline US Lodging Industry Macro Trends Daily Data Chain Scales Resort Performance Construction Pipeline Forecast Questions & Discussion Source: STR

3 Total United States Occupancy and ADR Twelve Month Moving Average February Occupancy (%) ADR ($) Peak $86.48 June 2001 $86.75 Feb Peak 64.6% 61.6% Feb

4 Total United States Room Supply/Demand Percent Change Twelve Month Moving Average 1989 to February Supply % Change Demand % Change

5 Total United States Room Demand Percent Change Jan 2001 February J F

6 Total United States Room Demand (Rooms Sold in Millions) Year End Source: STR

7 Total United States Occupancy/ADR Percent Change Twelve Month Moving Average 1989 to February Occ % Chg ADR % Chg

8 Total United States Room Rate Percent Change Jan 2001 February J F

9 Total U.S. Real ADR Growth Nominal Change + Inflation = Real Growth 6% 3% 0% Nominal Change -4.2% -3.0% -1.4% -1.4% Inflation 1.3% 4.0% -2.1% 0.2% -2.3% -2.7% -3% -2.8% -1.6% -6%

10 15 Luxury/Upper Upscale Chains Demand Segments Demand, ADR and Revenue Year End 2004 Percent Change Demand ADR Revenue Group Transient Contract

11 Total United States Key Performance Indicators Percent Change Twelve Months Ending February Supply Demand Occupancy ADR RevPAR

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13 Total U.S. Average Daily Lodging Demand in Millions Year End 2000, 2002 and Sunday Weekday Weekend

14 Total United States Rooms Sold/Day Differential (Thousands) Year End 2000 Vs Sun Mon Tue Wed Thur Fri Sat Source: STR

15 Total United States Rooms Sold/Day Differential (Thousands) Year End 2003 Vs Sun Mon Tue Wed Thur Fri Sat Source: STR

16 Total U.S. Average Daily Lodging Room Revenue in Millions Year End 2000, 2002 and Sunday Weekday Weekend

17 Total United States Day of Week Analysis Occupancy/ADR Percent Change Year End 2000 vs. Year End Supply Up 6.3% OCC ADR -8 Sun Mon Tue Wed Thu Fri Sat Source: STR

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20 US Existing Supply Hotels Rooms Room Revenues Luxury ,839 $ 4,355,964, Upper Up 1, ,684 $ 17,294,304, Upscale 2, ,122 $ 8,995,367, Mid with 4, ,712 $ 9,079,193, Mid w/o 6, ,359 $ 10,232,529, Economy 9, ,373 $ 7,447,570, Independent 22,725 1,507,679 $ 28,818,539, ,145 4,450,768 86,223,469,586 Hotels Rooms Room Revenues Luxury 0.5% 1.7% 5.1% Upper Up 2.8% 11.8% 20.1% Upscale 4.9% 8.3% 10.4% Mid with 9.6% 13.1% 10.5% Mid w/o 14.4% 13.9% 11.9% Economy 20.6% 17.3% 8.6% Independent 47.2% 33.9% 33.4% 100% 100% 100%

21 Chain Scales Supply/Demand Percent Change 12 Months Ending February Supply Demand Luxury Upper Upscale Upscale Mid w F&B Mid wo F&B Economy

22 Chain Scales Occupancy/ADR Percent Change 12 Months Ending February Occupancy ADR Luxury Upper Upscale Upscale Mid w F&B Mid wo F&B Economy

23 Chain Scales RevPAR/Room Revenue Percent Change 12 Months Ending February RevPAR Room Revenue Luxury Upper Upscale Upscale Mid w F&B Mid wo F&B Economy

24 Total United States Chain Scales Occupancy Percent Twelve Month Moving Average To February Luxury Upper Upscale Upscale Midscale W F&B Midscale WO Economy

25 Total United States Chain Scales Average Daily Rate Percent Change Twelve Month Moving Average To February Luxury Upper Upscale Upscale Midscale W F&B Midscale WO Economy

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27 Destination Resort Locations

28 Destination Resorts Key Performance Indicators Percent Change Twelve Months Ending February Supply Demand Occupancy ADR RevPAR

29 Resort Comparisons Supply % Change Year End Total US Upper Upscale Resort Dest. Resort 0.2

30 Resort Comparisons Demand - % Change Year End Total US Upper Upscale Resort Dest. Resort

31 Resort Comparisons Revenue - % Change Year End Total US Upper Upscale Resort Dest. Resort

32 Resort Comparisons Occupancy Absolute Levels Year End Total US Upper Upscale Resort Dest. Resort

33 Resort Comparisons Occupancy - % Change Year End Total US Upper Upscale Resort Dest. Resort

34 Resort Comparisons ADR - % Change Year End Total US Upper Upscale Resort Dest. Resort

35 Resort Comparisons RevPAR - % Change Year End Total US Upper Upscale Resort Dest. Resort

36 Resorts with & without Spa s Key Indicators Percent Change 12 Months Ending February % 8% 6% 6.7% 6.2% 5.3% With Spa 5.4% No Spa 8.8% 8.2% 4% 3.4% 2.7% 2% 1.3% 0.9% 0% Supply Demand Occupancy ADR RevPar

37 Resorts with & without Spa s Key Indicators Absolute Values 12 Months Ending February With Spa No Spa $ $ $ % 66.9% $ Occupancy ADR RevPar

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39 Total United States Active Development Pipeline - Rooms Change From Last Year Feb 2005 Feb 2004 Change % Chg In Construction 101, , % Final Planning 15,676 16,927 (1,251`) -7.4% Planning 169, ,046 (11,337) -6.3% In Pre-Planning 80, ,767 (55,318) -40.7% Total Development 367, ,289 (40,120) (9.9%) Source: STR / TWR / Dodge Construction Pipeline

40 30 25 Total United States Rooms Under Construction by Scale In Thousands February Luxury Upper Upscale Upscale Mid w F&B Mid w/o F&B Economy Unaffiliated Source: STR / TWR / Dodge Construction Pipeline

41 Total United States In Construction Rooms in Thousands January 2002 February Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: STR / TWR / Dodge Construction Pipeline

42 Historic Attrition Rates STR/PPR/FW Dodge Pipeline 20.0% 5.0% 53.0% 74.0% 80.0% 95.0% 47.0% 26.0% PrePlanning Planning Final Planning Under Constrution Opened Abandoned

43 Top Development Markets Active Pipeline (In Construction, Final Planning and Planning) Market Rooms Percent of Existing Supply Boston 8, Washington D.C. 7, New York 7, Chicago 7, San Diego 5, Orlando 4, Miami 4, Tampa 4, Phoenix 3, Dallas 3,

44 Resort* Pipeline by Phase Project Phase Start Final Planning Planning Pre-Planning Projects Rooms 10, ,121 11,873 * Only Projects with the word Resort in the Project Title Source: STR / TWR / Dodge Construction

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46 U.S. Economic Outlook Blue Chip Economic Indicators February P 2005F 2006F Real GDP +4.4% +3.6% +3.4% CPI +2.7% +2.5% +2.3% Corporate Profits +15.0% +10.1% +6.0% Disp Personal Income +3.1% +3.3% +3.5% Unemployment Rate 5.5% 5.3% 5.2%

47 Total United States Supply/Demand Percent Change P Supply % Chg Demand % Chg P

48 Total United States Occupancy Percent P P

49 Total United States Average Daily Rate P P 2005P Source: STR

50 Total United States ADR Percent Change P P

51 60 Total United States RevPAR Year End P $ $54.00 $ $50.25 $48.90 $ P Source: STR

52 Total United States RevPAR Percent Change P P

53 United States Lodging Industry - Estimated Profits (Billions $) E $ E 05E Source: PWC (2004 & 2005 Estimates)

54 U.S. Lodging Outlook * Supply Growth Remains Benign * Demand Strength Broadens * Occupancy Gains Continue * Aggressive Pricing Strategies * Increased Profitability

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56 Lodging Industry Issues Rising Costs Energy (Gas), Insurance, Labor (visa caps) Amenity Creep Bed Wars Rising Interest Rates Currency Exchange Airline Problems Hiring from Outside (Sr. Level) - Coke, Schweppes, Kraft Demand Leakage Condo Hotels, Cruise, Timeshare Demand Growth where are we in the cycle? Benign Supply Growth Old Habits Hard to Break? Terrorists Threats Source: STR

57 Selected Segment Occupancy / ADR Percent Change Peak vs. Current * Total U.S. Resort Properties Luxury Chains Resort Locations 5% 3.4% 2% 0.6% -1% -4% -2.2% -7% -4.6% -4.6% -6.3% -4.4% -7.0% -10% Occupancy ADR * 12 Months Ending March 2001 vs. 12 Months Ending May 2004

58 Selected Segment RevPar / Room Revenue Percent Change Peak vs. Current * Total U.S. Resort Properties Luxury Chains Resort Locations 10% 7.5% 5% 4.5% 0% -5% -3.8% -1.1% -2.0% -0.3% -10% -6.7% -15% -13.0% RevPar Room Revenue * 12 Months Ending March 2001 vs. 12 Months Ending May 2004

59 Selected Segment ADR Analysis Peak vs. Current * Resort Properties Luxury Chains Resort Locations $275 $250 $225 $200 $ $ $175 $ $ $150 $125 $ $ $100 Peak Current * 12 Months Ending March 2001 vs. 12 Months Ending May 2004

60 Selected Segment Occupancy Analysis Peak vs. Current * 75% Total U.S. Resort Properties Luxury Chains Resort Locations 71.2% 70% 65% 63.1% 67.8% 67.6% 64.7% 66.7% 64.6% 60% 60.2% 55% 50% Peak Current * 12 Months Ending March 2001 vs. 12 Months Ending May 2004

61 Selected Segment RevPar Analysis Peak vs. Current $200 Resort Properties Luxury Chains Resort Locations $175 $ $150 $ $125 $ $ $100 $93.76 $92.71 $75 Peak Current

62 Selected Segment Supply / Demand Percent Change Peak vs. Current * Total U.S. Resort Properties Luxury Chains Resort Locations 30% 25% 23.5% 20% 15% 10% 5% 0% 5.0% 8.7% 0.8% 0.2% 3.9% 15.7% -5% -10% -3.6% Supply Demand * 12 Months Ending March 2001 vs. 12 Months Ending May 2004

63 Percent Change in Room Demand 12 months ending Feb to 0 0 to to to to 19.2

64 Occupancy (%) 12 months ending Feb

65 Percent Change in ADR 12 months ending Feb to 0 0 to to to to 11.5

66 Total United States Room Supply Percent Change Jan 2001 February J F

67 Conference Centers ADR Absolute Levels Year End $ $ $150 $ $100 Conf. Centers Upper Upscale Resort Dest. Resort

68 Conference Centers RevPAR Absolute Levels Year End $ $95 $ $65 Conf. Centers Upper Upscale Resort Dest. Resort

69 Resorts with & without Spa s Size and Structure With Spa No Spa Properties Ave. Size Rooms 79, , 700

70 Total United States Occupancy Percent Change Jan 2001 February J F

71 Total United States RevPAR Percent Change Jan 2001 February J F

72 Resorts with & without Spa s Key Indicators Percent Change from Peak * 25% 20% 15% 10% 5% 0% -5% -10% 18.4% 7.2% 10.9% 2.9% -4.0% -6.4% -0.1% With Spa -0.5% No Spa -4.5% -6.4% 10.8% Supply Demand Occupancy ADR RevPar Room Revenue 2.4% * 12 Months Ending March 2001 vs. 12 Months Ending May 2004

73 Top 10 Markets Rooms Under Construction (000 s) December 2004 Washington, DC 4.5 Boston 3.0 Chicago 2.6 New York Denver Dallas Tampa Riverside, CA Orlando Norfolk

74 Top 10 Markets Construction as % of Supply December 2004 Hartford 11.3 Providence Savannah, GA Buffalo Denver Louisville Washington, DC Stamford, CT Tucson Boston

75 Interest as a Percentage of Total Revenue Remains 70 Percent Below Recent Peak 16% 14% % 12% 10% Interest as a Percent of Revenue 8% 6% 4% 2% 0% % % % Sources: PricewaterhouseCoopers LLP, Smith Travel Research, Macroeconomic Advisers L.L.C.

76 Chain Scales Supply/Demand Percent Change February 2005 YTD Supply Demand Luxury Upper Upscale -2.8 Upscale Mid w F&B Mid wo F&B Economy

77 Chain Scales Occupancy/ADR Percent Change February 2005 YTD Occupancy ADR Luxury Upper Upscale Upscale Mid w F&B Mid wo F&B Economy

78 Chain Scales RevPAR/Room Revenue Percent Change February 2005 YTD RevPAR Room Revenue Luxury Upper Upscale Upscale Mid w F&B Mid wo F&B Economy

79 Selected Segment Supply / Demand Percent Change February 2005 YTD 10% Total U.S. Destination Resorts Luxury Chains Resort Locations 5% 0% 0.7% -0.6% 5.4% 4.0% 2.8% 1.3% 1.7% -1.0% -5% Supply Demand

80 Selected Segment Occupancy / ADR Percent Change February 2005 YTD 10% Total U.S. Destination Properties Luxury Chains Resort Locations 8% 7.8% 6% 4% 3.4% 3.5% 4.0% 2.7% 4.2% 5.0% 3.3% 2% 0% Occupancy ADR

81 Selected Segment RevPar / Room Revenue Percent Change February 2005 YTD 20% Total U.S. Destination Properties Luxury Chains Resort Locations 15% 12.1% 13.6% 10% 7.7% 8.6% 8.4% 8.0% 5% 6.1% 5.0% 0% RevPar Room Revenue

82 Absolute Occupancy January 2000 February Total U.S. Destination Resorts Luxury Chains Resort Locations

83 Occupancy Percent Change January 2001 February Total U.S. Destination Resorts Luxury Chains Resort Locations

84 ADR Percent Change January 2001 February Total U.S. Destination Resorts Luxury Chains Resort Locations

85 RevPar Percent Change January 2001 February Total U.S. Destination Resorts Luxury Chains Resort Locations

86 Room Supply Percent Change January 2001 February Total U.S. Destination Resorts Luxury Chains Resort Locations

87 Room Demand Percent Change January 2001 February Total U.S. Destination Resorts Luxury Chains Resort Locations

88 Total United States Room Supply/Demand Percent Change Twelve Month Moving Average To February Supply % Change Demand % Change

89 Total United States Occupancy / ADR Percent Change Twelve Month Moving Average To February Occ % Change ADR % Change

90 Day of Week Occupancy All U.S. Hotels vs. Resorts % 75% 70% 65% 60% 55% 50% 45% 40% Total U.S. Resorts 70.5% 68.9% 66.4% 65.3% 65.9% 61.3% 62.6% 62.1% 60.2% 60.1% 56.2% 54.1% 46.1% 73.7% Sunday Monday Tuesday Wednesday Thursday Friday Saturday

91 Resort* Pipeline by Selected States State Projects Rooms FL 23 7,748 Query1 CA NV ,542 12,516 TX 13 2,498 OR AZ MS 5 2,350 PA * Only Projects with the word Resort in the Project Title Source: STR / TWR / Dodge Construction

92 Resort* Pipeline by Selected MSAs MSA Las Vegas, NV-AZ (MSA-4120) Tampa-St. Petersburg-Clearwater, FL (MSA-8280) Corpus Christi, TX (MSA-1880) Miami, FL (PMSA-5000) Orlando, FL (MSA-5960) San Diego, CA (MSA-7320) Riverside-San Bernardino, CA (PMSA-6780) Projects Rooms 12, , ,240 * Only Projects with the word Resort in the Project Title Source: STR / TWR / Dodge Construction