Beyond Bullet Points: Statistics, Trends and Analysis Vail R. Brown VP, Global Business Development & Marketing Vail@str.com @vail_str
5 THINGS TO KNOW
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ADR Recovery
ADR Finally Reaches A New High 09/08: $107.75 08/13: $109.20 2007 2009 2011 2013 Total U.S., Actual ADR $, 12 Month Moving Average, 2007 to Aug. 2013
Peak: Inflation Adjusted ADRs Still Not Reached Yet $119 2008 ADR Grown By CPI Nominal ADR 2000 / 2008 Grown by CPI $107 $101 2000 ADR Grown By CPI $85 $85 $104 $107 $116 2000 2002 2004 2006 2008 2010 2012 2014F Total U.S., ADR $ and Inflation Adjusted ADR $, 2000 2014F 2000 2012 CPI from bls.gov, 2013 2014 CPI from Blue Chip Economic Indicators
ADR Growth Levels. 10 OCC % Change ADR % Change 7.5% 5 4.1% 0-5 -6.7% -10-9.7% 2000 2002 2004 2006 2008 2010 2012 Total U.S.: ADR & OCC % Change 12 Month Moving Average 2000 to August 2013
ADR Growth Leads Across All Segments... 5.9 Occupancy ADR 4.4 4.4 3.8 3.2 2.7 1.9 1.5 1.2 1.2 1.8 1.5 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy U.S. Chain Scales: OCC / ADR % Change, YTD August 2013
ADR (Slowly) Catches Up To Prior Record Highs $294 $286 $290 2008 YTD 2013 2013 Forecast $164 $160 $161 $123 $122 $122 $97 $101 $101 $77 $77 $77 $56 $55 $54 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy U.S. Chain Scales: ADR $ YE 2008 & YTD August 2013 & 2013 Forecast as of 2Q
For 163 Markets: Mostly Increases Decrease ADR Increase Increase 30% 69% Occupancy Decrease 1% 0% Total U.S. ADR & OCC Change As of August YTD 2013
Peak ADRs Still Off Peak By Over $5 for 8 Of Top Markets $26.97 $22.16 $17.83 $10.63 $4.77 $4.67 $3.74 $1.29 $1.06 -$1.42 -$2.00 -$2.30 -$2.98 -$3.34 -$3.61 -$4.39 -$4.48 -$5.78 -$5.98 -$6.30 -$7.40 -$8.78 -$11.02 -$17.50 -$26.54 Top 25 Markets ADR $ Change From Prior Peak, as of July 2013
Change in Group Business
Demand Contribution Gap Deepens 70% Group mix Trans Mix 60% 50% 40% 30% 2005 2006 2007 2008 2009 2010 2011 2012 2013 Demand Contribution: Group & Transient Customer Mix Luxury, Upper-Upscale and top tier Independent hotels: Contract not shown, but included in total
Selling 4.9 Million Less Group Rooms From Peak 115 110 110.4 105 100 105.3 95 90 2005 2007 2009 2011 2013 U.S.: Luxury/Upper Upscale/Upper Tier Independents Group Room Demand in Millions 12 Month Moving Average 2005 to August 2013
YTD Group ADR Is 3.4% $180 2008 2010 2012 2013 $170 $160 $150 $140 $130 $120 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total U.S.: Monthly Group ADR 2008, 2010, 2012 & to August 2013 NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels).
YTD August ADR $ : Transient Rooms Increase Premium $179 Transient $ Group $ $176 $169 $161 $157 $151 $149 $153 $143 $146 $150 $155 2008 2009 2010 2011 2012 2013 Total U.S.: Customer Segmentation ADR $, YTD August 2008-2013 NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels).
New Hotels w/ 50,000+ Sqft Meeting Space Are A Dying Breed 12 9 5 2 0 0 2008 2009 2010 2011 2012 2013 YTD U.S. Count of New Hotels with 50k+ Sqft of meeting space, by year, 2008-2013
Pipeline Accelerating
U.S. Pipeline: Construction Accelerates Phase August 2013 August 2012 % Change In Construction 78,739 66,071 19.2% Final Planning 124,591 106,281 17.2% Planning 126,337 132,259-4.5% Active Pipeline 329,667 304,611 8.2% Total U.S.: Development Pipeline Rooms Change From Last Year
Under Construction Rooms Mostly In Middle Segments 29.5 21.6 10.9 4.7 7.6 3.3 1.1 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated Total U.S.: Rooms In Construction by Scale In Thousands August 2013
Construction In Top 26 Markets: 10 With 2%+ Growth Market Rooms UC % Of Existing Las Vegas, NV 0.0% Minn-St Paul, MN-WI 0.0% Oahu Island, HI 0.0% Boston, MA 52 0.1% San Fran-San Mateo, CA 174 0.3% Norfolk-VA Beach, VA 168 0.4% Phoenix, AZ 474 0.8% Atlanta, GA 881 0.9% Detroit, MI 431 1.2% Dallas, TX 968 1.2% Chicago, IL 1,482 1.3% Seattle, WA 543 1.3% San Diego, CA 813 1.4% Tampa-St Pete, FL 614 1.4% St Louis, MO-IL 585 1.5% Anaheim-Santa Ana, CA 996 1.7% New Orleans, LA 722 1.9% Philadelphia, PA-NJ 781 2.1% LA-Long Beach, CA 2,422 2.3% Miami-Hialeah, FL 1,272 2.3% Orlando, FL 2,572 2.3% Houston, TX 1,814 2.4% Washington, DC-MD-VA 2,861 2.5% Denver, CO 1,675 4.1% Nashville, TN 1,938 5.3% New York, NY 12,610 11% U.S. Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, Aug. 2013
Global Demand
Europe Demand Is On The Upswing 10 8 U.S. Europe 6 4 Jul 13 2.4% 2 0-2 Jul 13 2.3% -4-6 -8-10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 U.S. vs. Europe Demand Percent Change 12 Moving Average YE 2000- July 2013
BRIC Demand Slowing Down. G7 Slow and Steady 25 BRICs G7 Oct 10 19.7% 10 Feb 11 7.4% Jul 13 2.5% -5 May 09-9.5% Aug 09-7.0% Jul 13 2.0% -20 2008 2009 2010 2011 2012 BRICs Vs G7 Demand Percent Change 12 Month Moving Average YE 2008 to July 2013
July 2013: Highest Monthly Room Demand EVER (108.5 Million)
More New Records Room Supply Room Demand Room Revenue 1.8 Billion 1.1 Billion $120.5 Billion Total U.S. 12 Month Moving Average August 2013 * All Time High
Favorable Supply / Demand Fundamentals for 2013 8 Demand Supply 8.0% 4 2.4% 0 0.7% -4-4.7% -6.9% -8 2000 2002 2004 2006 2008 2010 2012 Total U.S.: Supply & Demand % Change 12 Month Moving Average 2000 to August 2013
Seasonally Adjusted: Demand Slowing 95 90 85 80 75 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total U.S.: Monthly Room Demand (In Millions) Seasonally Adjusted 2003 to July 2013
Forecast
Supply Below 20 Year Average Demand Above Supply % Chg Demand % Chg 7.2 4.7 1.2 0.7 2.4 2.8 1.7 0.5 0.5 2.9 2.2 0.8 1.1 2.4 1.7 1.7-2.5-6.2 2007 2008 2009 2010 2011 2012 2013P 2014P 20 Yr Average Total U.S.: Supply/Demand Percent Change 2007 2014P
2013 OCC: 62.2% 2014 OCC: 63.1% 5.4 4.2 2.5 1.4 1.3-0.5 20 Year Average: -0.04% -4.8-8.8 2007 2008 2009 2010 2011 2012P 2013P 2014P Total U.S.: Occupancy Percent Change 2007 2014P
Pretty Healthy ADR Growth 6.7 3.0 20 Year Average: 3.0% 3.9 4.2 4.2 4.6 0.0-8.7 2007 2008 2009 2010 2011 2012 2013P 2014P Total U.S.: ADR Percent Change 2007 2014P
Outlook 2013 Forecast 2014 Forecast Supply 0.8% 1.1% Demand 2.2% 2.4% Occupancy 1.4% 1.3% ADR 4.2% 4.6% RevPAR 5.7% 6.0% Total U.S.: Key Performance Indicator Outlook (% Change vs. Prior Year) 2013-2014
5 Things To Know. ADR Growth: Let s Call It 4.5% Group Growth: New Reality? Supply Growth: Slow(ly but Surely) Demand Growth: Healthy. Future Demand? Outlook: Boring. But Boring Is Good
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