Global Hotel Industry Outlook NYU 2011 Mark V. Lomanno CEO STR
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Agenda Global Hotel Performance US Hotel Performance Chain Scales Group/Transient Distribution Channel s Forecast
Global Hotel Performance
Global Regions Occupancy Percent Change Comparable Time Period December 2010 YTD vs. April 2011 YTD 10 8.9 5 5.2 3.7 5.6 5.2 0 0.8-0.7-5 2010 YTD Q1 2011-10 Europe Americas Middle East/Africa Asia Pacific -8.5
Global Regions ADR Percent Change (In US$) December 2010 YTD vs. April 2011 YTD 15 2010 Q1 2011 11.4 13.4 10 9.1 9.8 5 3.2 3.1 0 0.6-1.8-5 Europe Americas Middle East/Africa Asia Pacific
Global Regions RevPAR Percent Change (In US$) December 2010 YTD vs. April 2011 YTD 25 20 2010 Q1 2011 21.3 15 13.1 12.6 10 8.6 5 3.3 6.2 4.0 0 Europe Americas Middle East/Africa Asia Pacific 0.5
Global Pipeline In Construction (Rooms) April 2011 Europe 58,697 rooms Asia Pacific 182,664 rooms North America 67,060 rooms Central/South America 11,398 rooms ME & A 68,588 rooms Source: STR / STRGlobal
U.S. Hotel Performance
Total United States Key Performance Indicators Percent Change Year End 2010 vs. April YTD 2011 10 9 8 7 6 5 4 3 2 1 0-1 7.6 6.4 5.6 5.4 1.9 0.9 2010 2011 5.5 3.1-0.1 Supply Demand Occupancy ADR RevPAR 8.7
Total United States Room Supply/Demand Percent Change Twelve Month Moving Average 1989 to April 2011 10 8 6 June 89 5.3% Supply % Change Demand % Change 7.9% 4 2 0-2 -4-6 -8 Jan 89 4.6% Nov 91-0.9% Mar 02-4.7% Aug 06-0.2% Sep 09 7% 1.4% 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Total United States Occupancy Twelve Month Moving Average 1989 to April 2011 70 65 June 06 63.5 60 Dec 91 61.9 Apr 11 58.5 55 Aug 02 58.5 Jan 10 54.5 50 1989 1992 1995 1998 2001 2004 2007 2010
Total United States Key Performance Indicators 1990 2000 Current Recent Peak Average Daily Rooms Available Average Daily Rooms Sold 3,337,800 4,185,400 4,831,900 4,831,900 2,123,100 2,644,500 2,827,600 2,827,600 Occupancy 63.6 % 63.2 % 58.5% 63.5 % Average Rate $58.20 $84.66 $98.99 $107.70 RevPar $37.02 $53.49 $56.46 $66.02 Room Revenue 45.1 b 81.7 b 102.2 b 109.5 b
10 Total United States Room Nights Sold 12 Month Moving Average (000,000,000) January 1989 April 2011 9 8 7 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total United States Occupancy/ADR Percent Change Twelve Month Moving Average 1989 to April 2011 10 8 6 4 2 0-2 -4-6 -8-10 -12 Jan 92 0.1 June 91-3.4 Occ % Chg ADR % Chg Mar 02-6.7 Aug 02-4.7 Nov 06 7.7 Sept 09-9.7 1989 1992 1995 1998 2001 2004 2007 2010 Jan 10-8.7
Total United States ADR Seasonally Adjusted 1998 to April 2011 110 100 Seas Adj $107.44 Sep 2008 90 80 $85.98 Oct 2000 $86.32 Oct 2004 70 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total United States RevPAR Percent Change Twelve Month Moving Average 1989 to April 2011 12 8 Jan 01 6.5 June 06 9.3 Apr 11 8.5 4 0-4 -8 Oct 91-2.5-12 -16-20 June 02-10.4 Oct 09-16.8 1989 1992 1995 1998 2001 2004 2007 2010
Chain Scales
Chain Scales Supply / Demand Percent Change April YTD 2011 15 10 7.5 8.2 9.2 Supply Demand 5 1.4 1.8 4.6 3.1 3.0 5.3 0-0.6-0.2-5 -5.6-10 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
Chain Scales Occupancy / ADR Percent Change April 2011 YTD 10 5 6.0 5.9 2.8 3.6 4.9 3.2 6.0 2.5 5.3 5.5 1.0 0-0.5-5 Occupancy ADR Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
Chain Scales RevPAR / Room Revenue Percent Change April 2011 YTD 15 10 12.2 13.8 8.4 11.6 11.9 8.3 8.6 RevPAR Room Revenue 6.5 6.6 6.4 5 4.8 0-1.0-5 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
Chain Scale Occupancy Percent Twelve Months Ended April 2011 75 70 67.8 68.0 67.3 65 60 59.5 55 52.6 52.6 50 45 40 35 30 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
Chain Scale Average Daily Rate Twelve Months Ended April 2011 285 235 $248.44 185 135 85 $144.21 $109.37 $92.04 $73.36 $49.54 35 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
Luxury ADR Premium Increase On Pace $130 $128 $120 $110 $104 $104 $100 14 Months $96 $90 2005 2006 2007 2008 2009 2010 * Luxury ADR Premium Over Upper Upscale ADR, 12 MMA, 1/05 4/11 15 Mo $95
Booking Channel Analysis Understanding the Costs and Benefits of All Distribution Channels
Demand & Revenue Share by Channel for Chain Hotels All Scales less Independents, Annual 2010 Preliminary Results OTA - Merchant /Retail 4.6 OTA - Opaque 2 Brand.com 17.5 OTA - Merchant /Retail 4.3 OTA - Opaque 1.2 Brand.com 20.2 CRS 12.2 CRS 15.4 Property Direct 54.3 GDS 9.3 Property Direct 46.5 GDS 12.3 Demand Share Revenue Share Combining OTA Merchant/Retail; Prop Direct includes walk-in, group, & deals; Shares vary widely by scale; total numbers are blended; definitions available
Channel Demand Share by Scale Channel View Demand Share as percent of Total Demand, Annual 2010 Preliminary Results Luxury Upper Up Upscale Upper Mid Midscale 56 66 38 34 42 8 8 7 6 7 18 22 23 22 22 19 15 15 13 14 15 10 10 8 5 OTA Brand.com CRS GDS Property Direct Brand,com in UpUp & Up, CRS in Lux & UpUp, GDS at top, Prop Direct bottom
Channel Revenue Differential Index for Chain Hotels Annual 2010 Preliminary Results 109 118 121 100 85 75 Brand.com CRS GDS Property Direct OTA Total Channels relative to Total, assuming ADR at $100, note GDS & Prop Direct
Top 15 Markets, Percent of OTA Demand Annual 2010, Combined OTA demand compared to total demand, Chain Hotels Florida Keys Maui Island, HI San Francisco, CA Anaheim-Santa Ana, CA Hawaii-Kauai Islands San Diego, CA Ft Lauderdale, FL Los Angeles, CA New York, NY Oahu Island, HI Seattle, WA San Antonio, TX Orlando, FL Chicago, IL Denver, CO 11.1 11.0 10.9 10.9 10.7 10.6 10.5 10.1 10.0 10.0 9.3 9.0 12.4 12.9 13.6 OTA activity higher in leisure and group destinations
Bottom 15 Markets, Percent of OTA Demand Annual 2010, metro markets with over 100K annual rooms, Chain Hotels Pittsburgh, PA Albuquerque, NM Jacksonville, FL Louisville, KY Nashville, TN Norfolk, VA Beach, VA Cincinatti, OH Oklahoma, City, OK Charlotte, NC Raleigh-Durham-CH, NC Birmingham, AL Knoxville, TN Greensboro-WS, NC Richmond, VA Memphis, TN 3.1 4.2 4.1 4.4 4.9 6.5 6.5 6.4 6.2 6.0 5.9 5.7 5.7 5.7 5.6 Less OTA activity in smaller second tier and southern cities
Forecast
U.S. Economic Outlook Blue Chip Economic Indicators April 2011 2010 2011F 2012F Real GDP +2.8% +2.9% +3.2% CPI +1.6% +2.7% +2.1% Corporate Profits +31.1% +7.5% +6.6% Disp. Personal Income +1.3% +2.5% +2.5% Unemployment Rate 9.6% 8.7% 8.2%
Total United States Active Development Pipeline Rooms Change From Last Year Phase April 2011 April 2010 Difference % Change In Construction 50,335 77,404-27,069-35.0% Planned Pipeline 272,088 289,676-17,588-6.1% Active Pipeline 322,423 367,080-44,657-12.2% Planned Pipeline includes projects in Final Planning and Planning phases
Total United States Key Performance Indicator Outlook Scenario (% change vs. Prior Year) 2011P Hotel Industry Performance Scenarios 2011 Low RevPAR Growth Forecast High RevPAR Growth Supply 0.9 0.7 0.4 Demand 4.0 4.6 5.3 Occupancy 3.2 3.8 4.8 ADR 3.2 4.0 4.7 RevPAR 6.6 8.0 9.2
Total United States Chain Scale Key Performance Indicator Outlook 2011F by Chain Scale Chain Scale Occupancy (% chg) 2011 Year End Outlook ADR (% chg) RevPAR (%chg) Luxury 3.9 6.4 10.4 Upper Upscale 2.6 5.2 7.7 Upscale 4.4 5.1 9.6 Upper Midscale 4.0 4.2 8.2 Midscale 5.7 2.0 7.7 Economy 2.0 2.8 4.9 Independent 4.1 4.3 8.5 Total United States 3.8 4.0 8.0
Total United States Key Performance Indicator Outlook Scenario (% change vs. Prior Year) 2012P Hotel Industry Performance Scenarios 2012 Low RevPAR Growth Forecast High RevPAR Growth Supply 0.8 0.5 0.3 Demand 2.0 2.5 2.9 Occupancy 1.3 2.0 2.8 ADR 5.2 6.0 6.9 RevPAR 6.7 8.1 9.5
Total United States Chain Scale Key Performance Indicator Outlook 2012F by Chain Scale Chain Scale Occupancy (% chg) 2012 Year End Outlook ADR (% chg) RevPAR (%chg) Luxury 1.6 8.2 9.8 Upper Upscale 1.7 6.9 8.7 Upscale 2.6 7.4 9.9 Upper Midscale 0.8 5.8 6.7 Midscale 1.1 5.4 6.5 Economy 1.7 3.8 5.4 Independent 3.0 6.1 9.0 Total United States 2.0 6.0 8.1
Total United States Occupancy Percent 2005 2012P 70 65 63.0 63.1 62.8 60 59.8 59.8 61.0 57.6 55 54.5 50 2005 2006 2007 2008 2009 2010 2011P 2012P
Total United States Average Daily Rate (In Dollars) 2005 2012P $125 $100 $91.03 $97.82 $104.32 $107.35 $98.18 $98.08 $102.00 $108.12 $75 $50 2005 2006 2007 2008 2009 2010 2011P 2012P
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