NYU International Hospitality Industry Investment Conference Amanda W. Hite STR President & COO
Supply
Middle East Leads in Development 6 5.9 4 3.8 2.5 2 1.0 1.2 1.1 0 Central- South America Europe Middle East Africa Asia Australia & Oceania Supply % Change, April 2014 YTD
Supply Growth Creeps Up 6 5 4 3 2 1 0-1 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Total U.S., Supply % Change, 12 MMA 1/1990 4/2014
U.S. Pipeline: Construction Accelerates Phase 2014 2013 % Change In Construction 103 72 42.6% Final Planning 130 101 29.3% Planning 150 157-4.8% Under Contract 383 330 16% Total U.S. Pipeline, by Phase, 000s Rooms, April 2014 and 2013
Under Construction Rooms Mostly In Middle Segments 38.9 31.3 68% 14.0 4.4 8.6 5.3 0.9 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated U.S. Pipeline, Rooms Under Construction, 000s Rooms, by Scale, April 2014
10 of Top 26 Markets With 2%+ Of Supply Market Rooms UC % Of Existing Anaheim-Santa Ana, CA 1,167 2.2% Dallas, TX 1,785 2.3% Washington, DC-MD-VA 2,500 2.3% Boston, MA 1,250 2.4% Los Angeles-Long Beach, CA 2,971 3.1% Houston, TX 3,259 4.3% Seattle, WA 1,889 4.6% Denver, CO 1,981 4.8% Miami-Hialeah, FL 2,442 5.0% New York, NY 13,230 12.0% U.S. Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, March 2014
U.S. Supply Outlook 2014 2015 1.2% 1.6% Total United States Supply Outlook (% Change vs. Prior Year), 2014-2015
Demand
Middle East Leads Demand Growth 10 9.9 7 4 3.5 4.3 3.7 1 1.5-2 -5 Central- South America -2.3 Europe Middle East Africa Asia Australia & Oceania Demand % Change, April 2014 YTD
Demand Growth is Steady 10 8 Feb 11 7.7% 6 4 2 Apr 14 2.5% 0-2 -4-6 -8 Sept 09-7.1% 2009 2011 2013 U.S., Room Demand % Change, 12 Month Moving Average: 89 to March 14
Upscale Leads Demand Growth 6 4.9 4 2 1.4 2.8 2.3 2.5 1.6 0-2 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy U.S. Chain Scales, Demand % Change, Twelve Months Ended April 2014
Transient Occupancy Share Increases 2005 2013 57% 43% Group Transient 64% 36% Group Transient *Transient and Group Occupancy as Share of Total OCC, 2005 and 2013
Occupancy Segmentation by Class: Groups Finally Returning? Transient % Change Group % Change 2.7 1.1 1.5 1.4 Luxury Upper Upscale *Segmentation Occupancy % Change, by Class, April 2014 YTD
U.S. Demand Outlook 2014 2015 Demand 2.6% 2.2% Occupancy 1.4% 0.6% Total United States Demand & Occupancy Outlook (% Change vs. Prior Year) 2014-2015
Average Daily Rate
Middle East Leads in Rate Growth 1.9 3.0-3.9-1.4-2.0-8.3 Select Global Regions ADR Percent Change (In US Dollars except Europe in Euros), April 2014 YTD
Steady ADR Growth As Room Demand Growth Continues 5 3.7% 0-5 Demand % Change ADR % Change -10 2008-4.5% Total U.S., ADR & Demand % Change, 12 MMA 1/2008 4/2014
Scales: ADR Growth Healthy, Especially For Luxury 4.9 4.2 4.0 3.9 3.2 3.3 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Total U.S. Chain Scales: ADR % Change, April 2014 YTD
Strong Transient Room Rate Growth $200 $193.45 $203.19 2010 2011 2012 2013 2014 $190 $180 $175.84 $183.93 $175.76 $180.33 $170 $160 $165.88 $159.93 $163.63 $169.19 $150 Transient Group NOTE: Data is for luxury and upper upscale classes only. Total United States Actual ADR ($) by Customer Segment, YTD 2010- April 2014
April 2014 YTD ADR % Change in Top 25: 5 Best / 5 Worst Performing Markets Market ADR $ ADR % Change Nashville, TN 113.22 13.2 San Francisco/San Mateo, CA 187.54 10.3 Denver, CO 105.78 7.8 Miami/Hialeah, FL 227.68 6.7 Boston, MA 156.51 6.2 New York, NY 227.39 1.6 Norfolk/Virginia Beach, VA 74.16 0.7 New Orleans, LA 160.22 0.1 Chicago, IL 112.11-0.4 Washington, DC-MD-VA 146.29-4.3
U.S. ADR Outlook 2014 2015 4.2% 4.3% Total United States ADR Outlook (% Change vs. Prior Year) 2014-2015
RevPAR
RevPAR growth in 3 of the four regions + 6.1% + 4.4% - 2.8% + 5.3% April 2014 YTD, RevPAR % Change in USD, Europe in Euro
Positive RevPAR Growth For The Foreseeable Future 10 9% 8.6% 5 0 112 Months 65 Months 44 Mo. -5-2.6% -10-10.1% -15-16.8% -20 1990 2000 2010 Total U.S., RevPAR % Change, 12 MMA 1/1990 4/2014
April 2014 YTD RevPAR % Change in Top 25: 5 Best / 5 Worst Performing Markets Market RevPAR % Change Nashville, TN 20.3 Denver, CO 20.1 San Francisco/San Mateo, CA 14.2 St. Louis, MO-IL 13.6 Dallas, TX 12.1 Norfolk/Virginia Beach, VA 2.5 New Orleans, LA 0.8 Chicago, IL 0.1 New York, NY 0.0 Washington, DC-MD-VA -4.3
U.S. Forecast Summary Outlook 2014 Forecast 2015 Forecast Supply 1.2% 1.6% Demand 2.6% 2.2% Occupancy 1.4% 0.6% ADR 4.2% 4.3% RevPAR 5.7% 4.9% 2014 2015 Source: STR & TE
New Peaks Reached in 2013 180 160 140 120 146.0 125.5 Revenue 133.4 Net Income 146.5 154.8 163.0 In Billions 100 80 60 40 20 36.7 24.5 28.2 33.9 37.2 41.0 0 2008 2009 2010 2011 2012 2013 Total U.S., Estimated Total Revenue and Profitability* 2008 2013 *Representing all U.S. hotels that collectively provide room revenue data to STR. Net Income defined as House Profit less management fees, property taxes, insurance, and an imputed 4.0% reserve for replacement expense.
Key Takeaways Industry is Profitable Supply Growth Accelerates First Quarter Demand Stronger than Expected Group Demand: Finally Some Growth STR Forecast: Positive, Robust Growth
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