Hotel Industry Overview

Transcription

1 Hotel Industry Overview Lodging Conference Ali Hoyt Senior Director, Consulting and Analytics 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.

2 Agenda Total U.S. Review Segmentation Pipeline Forecast

3 No Need To Take Notes Download This Presentation Data Dashboard>View All Data Presentations

4 Total U.S. Review

5 Another Strong Year in the Making Actual % Change Room Supply 2.0% p Room Demand 2.9% p Occupancy 67.6% 0.8% p ADR $ % p RevPAR $88 3.5% p Total US Results, Aug YTD 2018

6 Quarterly RevPAR % Change: Q2 RevPAR Growth Actually Accelerated! Q1 Q2 Q3 Q4 Total US, RevPAR % Change, by Quarter, Q Q2 2018

7 Demand Growth Continues and Supply Growth Slow and Steady 8 Supply % Change Demand % Change 3.1% % Total U.S., Supply & Demand % Change, 12 MMA 1/1990 8/2018

8 ADR Growth Steady and Occupancy Growth Leads to New Occupancy Records Occ % Change ADR % Change 2.4% % Total U.S., ADR & OCC % Change, 12 MMA 1/1990 8/2018

9 102 Consecutive Months of RevPAR Growth Months 56 Months 102 Months Total U.S., RevPAR % Change, 1/1990 8/2018

10 Strong Luxury Demand Growth, New Upscale and Upper Midscale Supply Supply % Change Demand % Change Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Supply / Demand % Change, by Class, Aug YTD 2018

11 Higher Occupancy Growth Spurs Higher ADR Growth Occ % Change ADR % Change Luxury Upper Upscale Upscale Upper Midscale Midscale Economy RevPAR % Change by Contribution of OCC / ADR % Change, by Class, Aug YTD 2018

12 Strong Demand Drives Stellar Occupancy Results Luxury Upper Upscale Upscale Upper Midscale Midscale Economy OCC %, by Class, Aug YTD 2018 & 2017

13 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 Orlando, FL Leisure Demand San Francisco/San Mateo, CA Group Demand Atlanta, GA Denver, CO Houston, TX St Louis, MO-IL Boston, MA 75.0 (0.2) Washington, DC-MD-VA 73.6 (2.2) Inauguration / Women s March Comp ADR % Change and absolute OCC in Top 25: 5 Best / 5 Worst Performing ADR % Markets, Aug YTD 2018

14 We are monitoring the Number of Submarkets with Negative RevPAR % 97% 57% 70% 54% 47% 63% 32% 23% 25%25% 29%33% 23% 14%15% 8% 8% 8% 14% 18% 9% 11%16% 4% 12% 22%28%27% 25% YTD 17 YTD 18 Submarkets with Negative RevPAR % Change out of all 639 Submarkets, by year , and YTD June 2017/18

15 Segmentation

16 Transient Segment Rooms reserved at rack rate, corporate negotiated, package, government rate or rooms booked via third party websites. Group Segment Rooms sold simultaneously in blocks of 10 or more.

17 Transient Performance: ADR Growth Seems to Accelerate 4% Demand % Change ADR % Change 3% 2% 1% 0% Jan-16 Jul-16 Jan-17 Jul Jan Jul-18 Transient Demand and ADR % Change, Luxury and Upper Upscale Classes, 12 MMA, 1/2016 8/2018

18 Group Performance: Demand Growth Is Finally Positive Demand % Change ADR % Change 4% 3% 2% 1% 0% -1% -2% Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Group Demand and ADR % Change, Luxury and Upper Upscale Classes, 12 MMA, 1/2016 8/2018

19 Demand (millions) Demand Growth is Transient Driven Group Transient 39.0% % Total Number of Rooms Sold, Group and Transient, by year

20 Monthly Segmentation ADR % Change: 2018 Is A Different Story From Transient ADR % Change Group ADR % Change Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 ADR % Change, Transient & Group, by Month, 8/2017 8/2018

21 Pipeline

22 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, August 2018 and 2017

23 Under Construction Pipeline is Leveling Off Below Prior Peak High: Dec K 20,000 rooms below peak Aug K 50 Low: May 11 50K Total US Pipeline; Rooms In Construction, in 000s; 1/2006 8/2018

24 Limited Service Construction Is The Name Of The Game % of Rooms In Construction Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated US Pipeline, Rooms In Construction, 000s Rooms, by Scale, August 2018

25 A few words on rate growth

26 Real ADR Growth (ADR% minus CPI%) Now Hovers Around 0% 5.0% 0.0% -5.0% -10.0% CPI Data: Consumer Price Index for All Urban Consumers: All Items, Index =100, Monthly, Seasonally Adjusted Source: FRED Graph Observations; ADR Data, Source: STR, Running 12 Months Ending July 2018

27 ADR Growth Weak Compared to the 90 s Rate Growth 7.3% 2.4% Inflation Rate 2.9% 2.3% CPI Data: Consumer Price Index for All Urban Consumers: All Items, Index =100, Monthly, Seasonally Adjusted Source: FRED Graph Observations; ADR Data, Source: STR, Running 12 Months Ending July 2018

28 RevPAR Increases, August 20, 2017 Idaho Falls, ID 501% Casper, WY 766% Columbia, MO 454% Hopkinsville, KY 1,644% Lincoln, NE 321% Nashville, TN 165% Total RevPAR Increase of all Hotels in Path: 244% Source: STR

29 2018 / 2019 Forecast

30 Total U.S. Forecast Outlook 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%

31 Summary Industry remains at record-setting levels, but growth is slow Demand is exceeding expectations in 2018 RevPAR growth will be driven by ADR growth Construction pipeline slowing below prior peak Can t forecast a black-swan event

32 Thank You! Ali Hoyt Senior Director, Consulting & 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.