Transcript Total United States Occupancy and ADR Percent Change YTD
Statistically Speaking…
Past, Present, Future
Vail R. Brown, CMHS Vice President, Global Business Development & Marketing
@vail_str March 25, 2015
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3 Things to Know …..
With some musical inspirations
1. Industry Pulse 2. Pipeline Growth 3. Where Are We Headed
1. Industry Pulse: Hoteliers Are …
MAY:
RevPAR Growth
10%
Highest May of any on record… ever!
JULY:
Most Rooms Sold Ever!
113 Million
JUNE:
Occupancy
71.7%
Highest June occupancy this decade!
AUGUST:
Room Revenue
$90.8 bn
Highest Aug YTD!
97%
Of All STR Submarkets Reported Positive RevPAR Growth in 2014
*608 of 630 STR Submarkets
2015: RevPAR Keeps on Growing
• Room Supply* • Room Demand* • Occupancy • ADR* • RevPAR* • Room Revenue*
64.8% $115 $75 % Change 0.9% 4.6% 3.7% 4.6% 8.5% 9.4%
Total U.S. Results: February 2015 12 Moving Average * All Time High Absolute Values
The Best Fundamentals (Maybe In Our Lifetime) 8 4 0 -0,8 -4 Supply % Change Demand % Change -4,7 -7,1 -8 1990 2000 2010
Total U.S., Supply & Demand % Change, 12 Month Moving Average: 1/1990 – 02/2015
7,7 4.6
10 2015 Growth Rates Are Healthy. OCC continues to climb.
7,5 6,8 5 4.6 3.7 0 -3,4 -5 OCC % Change ADR % Change -6,7 -10 1990 2000
Total U.S., ADR & OCC % Change, 12 Month Moving Average: 1/1990 – 02/2015
-9,7 2010
Real ADR….Adjusted for inflation $125 $115 $105 $95 1987 1990 1993 1996 1999 Total U.S. Real ADR (Adjusted for Inflation)
1987-2014 Annual (Current Dollars)
2002 2005 2008 2011 2014
Source: U.S. Department of Labor: Bureau of Labor Statistics
Scales: RevPAR Composition is ADR Driven Occupancy % Change ADR % Change
4,3 5,2 4,8 5,5 4,1 3,2 2,2 0,7
Luxury Upper Upscale Upscale Upper Midscale
RevPAR % Change by Contribution of OCC / ADR % Change, by Scale February 2015 12 Month Moving Average 4,2 4,3
Midscale
5,0 3,9
Economy
Scales: Absolute OCC Very High On The Upper End
55 50 45 40 75 70 65 60
71,1 70,8 68,0 67,2 67,8 66,7 Luxury Upper Upscale Upscale
OCC %, by Scale, February YTD 2014 & 2015
58,4 56,2 Upper Midscale 2015 51,1 48,8 Midscale 2014 51,4 49,3 Economy
Group Demand Back. Good Implications For All Hotels
6% 5% 4% 3% 2% 1%
Demand % Change ADR % Change
*2014 Easter Comp -1% -2%
2012 2013 2014
Group Demand and ADR % Change, 12 Month Moving Average: 1/2012 – 02/2015
2015
2015: Superbowl Skewed Performance Up / Down Market
Phoenix, AZ San Francisco/San Mateo, CA Miami/Hialeah, FL Tampa/St Petersburg, FL Denver, Co
OCC %
75.9
76.3
85.1
77.3
68.9
New Orleans, LA Washington, DC-MD-VA Oahu Island, HI Philadelphia, PA-NJ New York, NY 69.5
56.7
83.6
56.0
71.3
February YTD 2015 ADR % Change in Selected Top 25 Markets
ADR % Change
19.8
10.5
10.4
9.4
9.3
3.0
0.9
0.6
-0.3
-6.6
2. Hotel Pipeline
Construction ‘Blues’ No Longer?
U.S. Pipeline: Construction Accelerates, But Is Still Muted Phase
In Construction Final Planning Planning
Under Contract 2015
129 156 150
436 2014
98 133 139
370 % Change
32% 17% 8%
18%
Total US Pipeline, by Phase, ‘000s Rooms, February 2015 and 2014
80 60 64,9 53,0 23,271 rooms closed in 2014 Number of Rooms Closed (in thousands) 40 35,4 28,1 31,1 27,7 26,5 17,7 19,8 23,3 20 3,5 0 2005 2006 2007 Total U.S. Closed Hotels
Annual 2004 through Feb 2015
2008 2009 2010 2011 2012 2013 2014 Feb-2015
Buy vs. Build $800 $600 Acquisition Cost $400 $200 $0 Luxury Upper Upscale Upscale Total U.S.: Acquisition Price vs. Development Cost
Source: 2014 Hotel Development Index
Development Cost Upper Midscale Midscale Economy
Limited Service Supply Growth May Impact Occupancies 48,3 38,3
67%
17,4 14,2 4,6 5,3
Luxury Upper Upscale Upscale Upper Midscale Midscale
0,8
Economy Unaffiliated U.S. Pipeline, Rooms Under Construction , ‘000s Rooms, by Scale, February 2015
January 2015: Top 5 Markets With Highest Supply Growth Market New York, NY Miami/Hialeah, FL Denver, CO Orlando, FL Houston, TX Supply Growth % 2.9
2.9
2.5
2.2
2.1
Top 5 Markets in Top 25 Markets, Supply Growth %, January 2015
New York, NY Market
13,711
Rooms Under Construction 12.2% of the Market’s Existing Supply U/C Rooms as % of Existing Supply, February 2015
3. Where Are We Headed?
Don’t Stop Thinking About Tomorrow…
It’ll soon be here
Supply Demand Occupancy ADR RevPAR
Outlook
2015 Forecast 1.3% 2.4% 1.2% 5.2% 6.4% 2016 Forecast 1.4% 2.2% 0.8% 5.0% 5.9% Total United States: Key Performance Indicator Outlook (% Change vs. Prior Year) 2015 - 2016
2015 Year End Outlook
Chain Scale Occupancy (% chg) ADR (% chg) Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Independent
Total United States
0.6% 1.1% 1.0% 1.6% 1.3% 1.4% 0.6%
1.2%
5.5% 5.1% 5.4% 4.8% 3.8% 4.7% 5.1%
5.2% Total United States: Chain Scale Key Performance Indicator Outlook 2015F by Chain Scale
RevPAR (% chg) 6.1% 6.3% 6.5% 6.5% 5.2% 6.2% 5.7%
6.4%
-5% to 0% Philadelphia 0% to 5% New York Norfolk 5% to 10% Anaheim Atlanta Boston Chicago Dallas Detroit Houston Los Angeles Miami Minneapolis Nashville New Orleans Oahu Orlando Phoenix San Diego San Francisco Seattle St. Louis Tampa Washington 10% to 15% Denver 2015 Year End RevPAR Forecast: Top 25 US Markets, Feb 2015 Forecast (Markets sorted alphabetically)
December FX Impact Remarkable
Market ADR % Change $ ADR % Change (Euro)
Boston Chicago Miami New York Toronto Washington Amsterdam Athens Berlin Warsaw Paris 4.9
3.0
9.1
-1.7
-4.1
2.2
-4.7
-7.8
-12.0
-16.6
-10.8
18.8
16.7
23.6
11.3
8.6
15.8
8.0
4.4
-0.3
-5.5
1.1
December 2014, select European & US markets, ADR % Change in $ and Euro
Demand Growth: Strong & Steady Supply growth: Not an Issue For Now YE RevPAR Forecast: Rosy