Statistically Speaking - PDF Free Download

Statistically Speaking NYU International Hospitality Investment Conference June 2018 Amanda W. Hite President & CEO ahite@str.com 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.

Significant demand growth across the world, except Central America Global Supply & Demand % Change, Q1 2018 7.6% Supply Demand 6.1% 6.2% 5.1% 4.4% 2.8% 3.0% 2.9% 3.3% 1.8% 1.9% 2.0% 0.9% 0.9% 1.4% -0.2% North America & Caribbean Central America South America Europe Middle East Africa Asia Australia & Oceania 2018 STR. All Rights Reserved.

Global RevPAR % Change Positivity continues in Q1 USD, Europe in EUR, Constant Currency, Q1 2018 North America +3.4% Europe +5.1% Central America +0.8% Northern Africa +28.0% Middle East -3.7% Asia +5.6% South America +15.0% Southern Africa +5.8% Australia & Oceania +4.7% 2018 STR. All Rights Reserved.

Continuing Our Record Run % Change Room Supply 1.9% Room Demand 2.9% Occupancy (*Record*) 66.1% 1.0% A.D.R. (*Record*) $128 2.2% RevPAR (*Record*) $84 3.2% Room Revenue 5.2% Total US Results, April 2018 12MMA 2018 STR. All Rights Reserved. 5

Has the Hotel Industry Skipped a Downturn? 8 7.8 4 2.9 0-0.8 1.9-4 Supply % Change -4.7-8 Demand % Change 1990 2000 2010-7.1 Total U.S., Supply & Demand % Change, 12 MMA 1/1990 04/2018 2018 STR. All Rights Reserved. 6

Pricing Increases (a little), But So Does Inflation 6.8 7.5 5 0 2.2 1.0-3.4-5 Occ % Change ADR % Change -6.7-10 1990 2000 2010-9.7 Total U.S., ADR & OCC % Change, 12 MMA 1/1990 04/2018 2018 STR. All Rights Reserved. 7

This Expansion Cycle Fueled by High Demand, Low Supply Cycle Period: Dec. 1991 Mar. 2001 Mar. 2010 - present Length (months): 112 98 Avg. Monthly Supply Growth: 2.4 1.0 Avg. Monthly Demand Growth: 2.6 3.4 Avg. Monthly ADR Growth: 4.2 3.4 Avg. Monthly RevPAR Growth: 4.4 5.9 2018 STR. All Rights Reserved. 11

Evidence of Induced Demand in Upscale and Upper Midscale Supply % Change Demand % Change 4.5 5.3 4.9 3.3 3.8 2.5 2.0 2.3 1.4 0.3 0.6 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy (0.3) *Supply / Demand % Change, by Class, April 2018 12MMA 2018 STR. All Rights Reserved. 13

ADR Growth Drives RevPAR Growth (But Occupancy Growth Still Contributes A Little) ADR % Change Occ % Change 2.4 3.0 1.8 1.6 1.6 1.4 0.8 0.3 0.8 1.1 1.2 0.9 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *RevPAR % Change by Contribution of OCC / ADR % Change, by Class, April 2018 12MMA 2018 STR. All Rights Reserved. 14

Class: Upscale and Upper Midscale Hotels Still Pretty Full Despite New Supply 71.2 70.7 72.8 72.6 72.5 72.0 2018 2017 68.0 67.3 60.8 60.1 58.8 58.3 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *OCC %, by Class, March 2018 & 2017 12 MMA 2018 STR. All Rights Reserved. 15

Transient Performance: Soft April, But Demand Still Impressive 4% 3% 2% 1% Demand % Change ADR % Change 0% Jan-16 Jan-17 Jan-18 *Transient Demand and ADR % Change, 12 MMA, 1/2016 04/2018 2018 STR. All Rights Reserved. 17

Group Performance: A Spike in April, Thanks to Easter Shift 4% 3% 2% Easter Shift 1% Easter Shift 0% -1% Demand % Change ADR % Change Jewish Holiday Shift -2% Jan-16 Jan-17 Jan-18 *Group Demand and ADR % Change, 12 MMA, 1/2016 04/2018 2018 STR. All Rights Reserved. 18

Segmentation ADR Showing A Pulse 5.0% 4.0% Transient ADR % Change Group ADR % Change 3.0% 2.0% 1.0% 0.0% Jan-16 Jan-17 Jan-18 *ADR % Change, Transient & Group, 1/2016 04/2018 2018 STR. All Rights Reserved. 19

Leisure Demand Seems To Allow For Pricing Power Market OCC % ADR % Change Nashville, TN 73.7 6.3 Miami/Hialeah, FL 77.7 5.9 Orlando, FL 79.5 5.2 Atlanta, GA 70.2 4.1 Detroit, MI 66.1 4.0 San Francisco/San Mateo, CA 82.5 0.7 Chicago, IL 69.0 (0.3) New York, NY 87.2 (0.5) Washington DC-MD-VA 71.8 (0.7) Philadelphia, PA-NJ 70.0 (1.6) ADR % Change and absolute OCC in Top 25: 5 Best / 5 Worst Performing ADR % Markets, April 2018 12 MMA 2018 STR. All Rights Reserved. 21

NYC RevPAR % Change: Strong Start Into 2018! 11.1 4.8 2.7 3.6 0.9-2.2-2.3-0.3-1.0-1.5-1.4-0.1 May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr * NYC RevPAR % Change, by Month, 5/2017 4/2018 2018 STR. All Rights Reserved.

US Pipeline: First Decline in I/C since the Recovery (Now for 4 Months Running) Phase 2018 2017 % Change In Construction 186 190-2.2% Final Planning 220 210 4.9% Planning 191 181 5.3% Under Contract 597 581 2.7% *Total US Pipeline, by Phase, 000s Rooms, April 2018 and 2017 2018 STR. All Rights Reserved. 25

Limited Service Construction Is The Name Of The Game 72% 58.6 61.8 21.7 21.5 8.7 11.9 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated 1.2 *US Pipeline, Rooms In Construction, 000s Rooms, by Scale, March 2018 2018 STR. All Rights Reserved. 26

Large Markets Grow Rapidly Market Rooms In Construction % Of Existing Nashville, TN 5,202 12% New York, NY 12,741 11% Denver, CO 4,597 10% Seattle, WA 3,690 8% Dallas, TX 6,508 8% *US Pipeline, Rooms I/C and as % of Existing Supply, Largest % In Top 26 Markets, April 2018 2018 STR. All Rights Reserved. 27

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 2.4% 2.0% Occupancy 0.4% 0.1% ADR 2.5% 2.3% RevPAR 2.9% 2.4% 2018 STR. All Rights Reserved. 29

Key Factors in 2018 As the economy goes, so goes the hotel industry Eyes on interest-rate lifts, weakening dollar Moderating new construction levels Demand growth should compensate for tough 3 rd & 4 th quarter comps Moderate average-rate growth will continue Can t forecast a black-swan event