Transcript Document

OUTLOOK 2007
Rachel J. Roginsky, ISHC
[email protected]
164 Canal Street Boston, MA 02114 ~ 617/722-9916
www.pinnacle-advisory.com
NATIONAL LODGING MARKET
Total U.S. Monthly Room Supply – Seasonally Adjusted
January 1989 to April 2006
4.4 Million
Rooms
CAGR
0.8%
3.1 Million
Rooms
150,000,000
140,000,000
CAGR
3.5%
Seas Adj
130,000,000
120,000,000
110,000,000
100,000,000
CAGR – 2.065%
90,000,000
1989
1991
Source: Smith Travel Research
1993
1995
1997
1999
2001
2003
2005
Total U.S.Monthly Room Demand – Seasonally Adjusted
January 1989 to April 2006
90,000,000
6.1%
Peak CAGR – 2.7%
80,000,000
70,000,000
CAGR – 2.061%
60,000,000
Seas Adj
Monthly Average
50,000,000
1989
1991
Source: Smith Travel Research
1993
1995
1997
1999
2001
2003
2005
Total United States Occupancy Percent
2002 – 2007P
70
65
64.4
64.8
63.1
61.3
60
59
59.2
2002
2003
55
Source: Smith Travel Research
2004
2005
2006P
2007P
Total United States ADR Percent Change
2002 – 2007P
8.0
6.0
6.7
6.5
2006P
2007P
5.4
4.1
4.0
2.0
0.1
0.0
-2.0
-1.5
2002
2003
Source: Smith Travel Research
2004
2005
Total United States RevPAR Percent Change
2002 – 2006P
10.0
7.8
8.5
8.9
7.1
5.0
0.4
0.0
-2.7
-5.0
2002
2003
Source: Smith Travel Research
2004
2005
2006P
2007P
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Top 25 Market Areas – Occupancy Percent 2005
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Source: Smith Travel Research
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Top 25 Market Areas – Average Daily Rate 2005
$250.00
$200.00
$150.00
$100.00
$50.00
$0.00
Source: Smith Travel Research
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Top 25 Market Areas – RevPAR 2005
$250.00
$200.00
$150.00
$100.00
$50.00
$0.00
Source: Smith Travel Research
Key 15 Markets RevPAR Percent Change
April 2006 YTD Year-over-Year
Chicago
20.0
Dallas
17.8
Atlanta
17.6
Honolulu
16.6
San Francisco
15.5
Boston
12.4
Phoenix
11.6
Miami
11.5
Top 25 Markets
11.1
San Diego
10.7
Los Angeles
10.0
New York
9.9
Total US
9.0
All Other Markets
7.5
Orlando
7.2
Philadelphia
3.5
Washington
2.4
0
Source: Smith Travel Research
5
10
15
20
25
SUBURBAN BOSTON
LODGING MARKET
Suburban Boston Occupancy 1996 - 2005
80.0%
69.4%
71.1%
73.3%
69.9%
70.0%
70.0%
61.3%
60.0%
58.3%
58.5%
59.7%
2004
2005
54.8%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
1996
1997
1998
1999
2000
2001
2002
Source: Smith Travel Research/Pinnacle Advisory Group
2003
Suburban Boston Average Daily Rate 1996-2005
$125.00
$107.73
$98.30
$100.00
$102.08
$105.13
$94.68
$90.32
$96.13
$90.71
$92.22
2003
2004
$81.51
$75.35
$75.00
$50.00
$25.00
$1995
1996
1997
1998
1999
2000
2001
Source: Smith Travel Research/Pinnacle Advisory Group
2002
2005
Suburban Boston RevPAR 1996 - 2005
$100.00
$79.31
$75.00
$68.71
$69.16
$65.11
$64.22
$56.57
$55.70
$49.89
$53.93
$53.93
$50.00
$25.00
$1996
1997
1998
1999
2000
2001
Source: Smith Travel Research/Pinnacle Advisory Group
2002
2003
2004
2005
Suburban Boston Supply and Demand 1999 - 2005
10,000,000
8,000,000
6,000,000
4,000,000
Supply
Dem and
2,000,000
0
1999
2000
2001
2002
2003
Source: Smith Travel Research/Pinnacle Advisory Group
2004
2005
Suburban Boston Occupancy YTD May 2004 - 2006
58.0%
55.4%
56.0%
54.0%
52.0%
53.4%
51.7%
50.0%
48.0%
46.0%
44.0%
42.0%
40.0%
2004
2005
Source: Smith Travel Research/Pinnacle Advisory Group
2006
Suburban Boston Average Daily Rate YTD May 2004 - 2006
$100.00
$97.85
$98.00
$96.00
$94.00
$92.86
$92.00
$90.00
$89.02
$88.00
$86.00
$84.00
2004
2005
Source: Smith Travel Research/Pinnacle Advisory Group
2006
Suburban Boston RevPAR YTD May 2004 - 2006
$56.00
$54.23
$54.00
$52.00
$49.63
$50.00
$48.00
$45.96
$46.00
$44.00
$42.00
$40.00
2004
2005
Source: Smith Travel Research/Pinnacle Advisory Group
2006
Suburban Boston New Supply 2006
•Hilton
•Hampton
Garden Inn – Plymouth – 130 Rooms – May
Inn and Suites – Plymouth - 122-rooms – August
•Residence
Inn – Marlborough – 112 Rooms - October
•Residence
Inn – Norwood – 96 Rooms – November
Source: Pinnacle Advisory Group
Source: Pinnacle Advisory Group
Suburban Boston 2006
•Improving Economy
•Stronger Office Market
•Limited New Supply
•Compression
Suburban Boston Projections 2006
2005
2006
Change
Occupancy
60%
62%
3.9%
Average Rate
$96.13
$100.94
5.0%
RevPAR
$57.39
$62.58
9.0%
Source: Pinnacle Advisory Group
Suburban Boston 2007
•Limited New Supply
•Slightly less Compression
•Improved Economy
•Conversions
Suburban Boston Projections 2007
2006
2007
Change
Occupancy
62%
63%
1.6%
Average Rate
$100.94
$105.98
5.0%
RevPAR
$62.58
$66.77
6.7%
Source: Pinnacle Advisory Group
BOSTON CAMBRIDGE
LODGING MARKET
Boston / Cambridge Occupancy 1989-2005
79%
80%
77%
75%
78%
79%
78%
76%
78%
75%
74%
75%
72%
74%
72%
72%
70%
70%
69%
68%
65%
60%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Pinnacle Advisory Group
Boston / Cambridge ADR 1989-2005
$225.00
$200.00
$175.00
$150.00
$125.00
$199.74
$190.28
$181.34
$176.65
$175.20
$165.98
$165.04
$161.15
$154.01
$143.58
$132.93
$125.03
$118.72
$113.92
$114.11
$117.35
$115.96
$100.00
$75.00
$50.00
$25.00
$1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Pinnacle Advisory Group
Boston / Cambridge RevPAR 1989-2005
$175.00
$156.80
$145.37
$137.79
$150.00
$127.31
$125.00
$111.99
$103.69
$96.27
$100.00
$82.16
$87.85
$78.85 $82.02
$125.85
$119.16
$131.22
$122.66
$108.12
$88.01
$75.00
$50.00
$25.00
$1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Pinnacle Advisory Group
Boston / Cambridge Supply and Demand 1989-2005
8,000,000
7,000,000
6,000,000
Supply
5,000,000
Dem and
4,000,000
3,000,000
Source: Pinnacle Advisory Group
20 0
5
20 0
4
20 0
3
20 0
2
20 0
1
20 0
0
19 9
9
19 9
8
19 9
7
19 9
6
19 9
5
19 9
4
19 9
3
19 9
2
19 9
1
19 9
0
19 8
9
2,000,000
Boston / Cambridge Occupancy YTD May 2004-2006
75.0%
70.0%
68.3%
68.6%
2004
2005
72.6%
65.0%
60.0%
55.0%
50.0%
45.0%
40.0%
Source: Pinnacle Advisory Group
2006
Boston / Cambridge ADR YTD May 2004-2006
$163.36
$165.00
$160.00
$155.00
$150.00
$149.04
$146.66
$145.00
$140.00
$135.00
2003
Source: Pinnacle Advisory Group
2004
2005
Boston / Cambridge RevPAR YTD May 2004-2006
$135.00
$131.06
$130.00
$125.00
$120.00
$112.06
$115.00
$110.00
$105.00
$101.78
$100.00
$95.00
$90.00
2004
Source: Pinnacle Advisory Group
2005
2006
Boston / Cambridge Change In RevPAR 1996 – YTD May 2006
20.0%
14.4%
15.0%
10.0% 8.0%
17.0%
14.5%
9.7%
8.7%
5.9%
2.6%
5.0%
0.0%
-5.0%
-10.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
YTD
-6.3%
MAY
-15.0%
-20.0%
-25.0%
Source: Pinnacle Advisory Group
-14.9%
-18.8%
Boston / Cambridge Change In RevPAR By Market Area 2005
9.0%
8.0%
7.0%
6.0%
5.0%
Occupancy
4.0%
Avg Rate
3.0%
RevPAR
2.0%
1.0%
0.0%
-1.0%
Back Bay
Downtown
-2.0%
Source: Pinnacle Advisory Group
Other
Cambridge
Boston / Cambridge Change In Performance By Market Area
YTD May 2006
25.0%
20.0%
15.0%
Occupancy
10.0%
Avg Rate
RevPAR
5.0%
0.0%
Back Bay
Downtown
-5.0%
Source: Pinnacle Advisory Group
Other
Cambridge
Boston / Cambridge New Supply 2006
•Westin
Headquarters Hotel – Waterfront – 790 Rooms – June
•Intercontinental – Downtown - 424-rooms - November
Source: Pinnacle Advisory Group
Boston / Cambridge New Supply 2007
•Charles
Street Jail – Beacon Hill – 308 Rooms - May
•Renaissance – 477 Rooms – Waterfront District – December
Source: Pinnacle Advisory Group
Boston / Cambridge Demand Factors
Continued
Strong Corporate Growth Anticipated
2006
Record Convention Year
2007
Slightly behind 2006
Winter
Advertising Campaign will help off-season Leisure
Source: Pinnacle Advisory Group
Boston / Cambridge Average Rates
Strong
increases in other national markets
Momentum
Luxury
from 2006 Likely to Carry-Over to 2007
Orientation of New Product Will Help
Large
Citywides and Continued Strong demand
will Help Compression
Source: Pinnacle Advisory Group
Pinnacle Operator’s Survey 2007 Outlook
• Several Regional Executives
• 5-7% RevPAR Growth
Source: Pinnacle Advisory Group
Boston Cambridge Projections 2006
2005
2006
Change
Occupancy
75%
78%
4.1%
Average Rate
$175.20
$192.72
10%
RevPAR
$131.22
$150.32
14.6%
Source: Pinnacle Advisory Group
Boston Cambridge Projections 2006
2006
2007
Change
Occupancy
78%
77%
-1.2%
Average Rate
$192.72
$204.94
6.3%
RevPAR
$150.32
$157.94
5.1%
Source: Pinnacle Advisory Group
PINNACLE ADVISORY GROUP
164 Canal Street Boston, MA 02114 ~ 617/722-9916
238 South State Street, Newtown, PA 18940 ~ 215/579-1804
3418 Norfolk Street, Pompano Beach, FL 33062 ~ 954/786-2019
www.pinnacle-advisory.com