Transcript Slide 1
US LODGING INDUSTRY OVERVIEW Mark V. Lomanno President SMITH TRAVEL RESEARCH Total United States Occupancy and ADR Twelve Month Moving Average To March 2004 90 85 Peak $86.46 June 2001 Occupancy (%) ADR ($) 80 $83.57 March 2004 75 70 65 60 Peak 64.9% June 1996 55 59.6% March 2004 50 1996 Source: STR 1997 1998 1999 2000 2001 2002 2003 2004 Total United States Estimated Revenue and Profitability Years 1993 – 2003E 120 50% 112.1 Revenue Pre-Tax Income GOP 100 77.4 80 70.4 66.7 63.5 60 103.5 102.9 102.6 104.0 93.1 45% 85.6 40.3% 40.9% 40.2% 39.2% 40% 38.2% 36.2% 37.1% 37.0% 33.5% 35% 32.5% 40 30.5% 17 20 2.4 5.5 8.5 12.5 20.9 22.1 22.5 16.2 14.2 15.0 0 30% 25% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003E Source: Smith Travel Research Total United States Room Supply/Demand Percent Change Twelve Month Moving Average To March 2004 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 Supply % Change Demand % Change 1998 Source: STR 1999 2000 2001 2002 2003 2004 Total United States Room Supply/Demand Percent Change Monthly Year-Over-Year 2000 – March 2004 10 5 0 -5 Supply % Change Demand % Change -10 -15 -20 2000 Source: STR 2001 2002 2003 2004 Current Lodging Demand * 2,648,200 – annualized daily rooms sold * Off 15,000 daily - from peak * Peak demand – 1st Quarter 2001 * New Demand High Reached in Q2 2004 Total United States Occupancy / ADR Percent Change Twelve Month Moving Average To March 2004 8 6 4 2 0 -2 -4 Occ % Change ADR % Change -6 -8 1998 Source: STR 1999 2000 2001 2002 2003 2004 Total United States Occupancy Percent Change Jan 2000 – March 2004 10 5 0 -5 -10 -15 -20 2 0 0 0 Source: STR 2 0 0 1 2 0 0 2 2 0 0 3 Total United States Room Rate Percent Change Jan 2000 – March 2004 10 5 0 -5 -10 -15 2 0 0 0 Source: STR 2 0 0 1 2 0 0 2 2 0 0 3 ADR % change 2003 vs 2002 Total United States Key Performance Indicators Percent Change 10 8.5 Total 2003 8 Q1 2004 6 7.3 5.5 4.3 4 2.9 2 1.7 1.8 1.2 1.1 0.5 0.1 0.6 0 Supply Source: STR Demand Occupancy ADR RevPAR Revenue Total United States Daily Occupancy* 2000 - 2003 75% 2000 2001 2002 2003 70% 68.8% 67.0% 65% 66.5% 64.4% 60% 59.9% 59.2% 59.4% 55% 50% Weekday * Excluding Sunday Weekend 66.9% Total U.S. Average Daily Lodging Demand in Millions 2000 - 2003 3.2 3.1 3.0 2000 2001 2002 2003 2.954 2.885 2.876 2.900 2.9 2.8 2.7 2.6 2.702 2.569 2.583 2.623 2.5 2.4 Weekday Weekend Total U.S. Average Daily Room Revenue in Millions 2000 - 2003 250 2000 240 2001 2002 $244.6 2003 $238.7 $238.4 $236.2 $234.7 230 $221.4 220 $219.7 $217.2 210 200 Weekday Weekend STR Chain Scales Selected chains from each segment • Luxury – Four Seasons, Ritz Carlton, Fairmont • Upper Upscale – Embassy, Hilton, Marriott, Sheraton • Upscale – Radisson, Courtyard, Crowne Plaza • Mid with F&B – Holiday Inn, Ramada, Best Western • Mid no F&B – Hampton Inn, Country Inns & Suites, HI Express • Economy – Motel 6, Red Roof, Days Inn Supply Percent Change by Chain Scale 6 4.6 4.7 4.3 4 3.6 2.7 2 2.3 1.5 1.3 0 Total 2003 -2 -1 -1.5 -1.8 Q1 2004 -2.3 -4 Luxury Source: STR Upper Upscale Upscale Mid W/ Mid W/O Economy Demand Percent Change by Chain Scale 12 10.3 Total 2003 Q1 2004 10 8 7.8 6.7 6.6 5.8 6 4 5.4 4.9 2.4 2.0 2 1.3 0 -2 -2.6 -2.3 -4 Luxury Source: STR Upper Upscale Upscale Mid W/ Mid W/O Economy Occupancy Percent Change by Chain Scale 8 7.4 Total 2003 6 Q1 2004 5.4 4.3 4.1 3.8 4 2.3 2.1 2 1.1 0.2 0 0.2 0 -1.3 -2 Luxury Source: STR Upper Upscale Upscale Mid W/ Mid W/O Economy ADR Percent Change by Chain Scale 4 3.3 Total 2003 Q1 2004 1.9 2 1.8 1.4 1.1 0.9 0.4 0 -0.1 -0.4 -0.7 -2 -1.8 -2 -4 Luxury Source: STR Upper Upscale Upscale Mid W/ Mid W/O Economy RevPAR Percent Change by Chain Scale 12 10.7 Total 2003 10 Q1 2004 8 6.8 6.3 6.0 6 4.9 3.5 4 2 1.2 0.5 0 -1 -2 -0.5 -1.2 -1.6 -4 Luxury Source: STR Upper Upscale Upscale Mid W/ Mid W/O Economy STR Destination Resorts - Definitions -337 Properties in the Continental US and Hawaii -12.6% of all rooms are associated with Walt Disney Resorts Breakout by Chain Scale: Scale LUXURY CHAINS UPPER UPSCALE CHAINS UPSCALE CHAINS MIDSCALE W/ F&B CHAINS ECONOMY CHAINS INDEPENDENTS Total Rooms 14,497 54,170 5,152 3,756 445 87,658 165,678 % of Total Rooms 8.8% 32.7% 3.1% 2.3% 0.3% 52.9% 100.0% Destination Hotels In The US Resorts - Destination Key Indicators (Percent Change) Twelve Month Ending February 8.0% 5.7% 6.0% 4.0% 4.5% 3.5% 2.4% 2.3% 2.1% 2.1% 2.0% 0.9% 0.0% -0.3%-0.1% -2.0% -4.0% -6.0% 1.8% 1.9% 2002 2003 2004 -8.0% -8.6% -10.0% -12.0% Supply Source: STR -9.9% -10.7% Demand OCC ADR RevPAR Resorts - Destination Key Indicators Twelve Month Ending February 167.65 167.14 166.97 170.00 150.00 2002 2003 2004 130.00 110.00 101.95 103.83 105.83 90.00 70.00 60.8 62.1 63.4 50.00 OCC (%) Source: STR ADR ($) RevPAR ($) Resorts – Destination (Segment Comparisons) Demand Percent Change Twelve Month Moving Average To February 2004 20 15 10 5 0 -5 Total US Luxury Boutique Hotels Resorts -10 -15 -20 2000 Source: STR 2001 2002 2003 2004 Resorts – Destination (Segment Comparisons) Occupancy Levels Twelve Month Moving Average To February 2004 75 Total US Luxury Boutique Hotels Resorts 70 65 60 55 2000 Source: STR 2001 2002 2003 2004 Resorts – Destination (Segment Comparisons) Occupancy Percent Change Twelve Month Moving Average To February 2004 10 5 0 -5 -10 Total US Luxury Boutique Hotels Resorts -15 -20 2000 Source: STR 2001 2002 2003 2004 Resorts – Destination (Segment Comparisons) ADR Percent Change Twelve Month Moving Average To February 2004 15 10 5 0 Total US Luxury Boutique Hotels Resorts -5 -10 2000 Source: STR 2001 2002 2003 2004 Resorts – Destination (Segment Comparisons) RevPAR Percent Change Twelve Month Moving Average To February 2004 20 15 10 5 0 -5 -10 Total US Luxury Boutique Hotels Resorts -15 -20 -25 2000 Source: STR 2001 2002 2003 2004 Performance Since The Respective Peak RevPAR Month 0.0% 0.0% -2.0% -4.0% -3.3% -6.0% -8.0% -6.6% -5.9% -6.6% -7.0% -8.9% -10.0% -10.3% -10.6% -12.0% -7.4% Resorts Luxury Chains -14.0% Boutique -16.0% Total US -18.0% -16.6% -17.1% RevPAR Source: STR OCC ADR Total U.S. Estimated Lost Room Revenue 3rd Party Intermediaries 1,500 In Millions $1,284.1 1,300 1,100 $872.3 900 700 500 300 $375.0 $200.5 100 2000 Source: STR 2001 2002 2003* Total U.S. Estimated ADR Change Impact of 3rd Party Intermediaries 7% 5.8% 6% 5.5% 5% 4% 3% 2% 1% 0% -1% -0.7% -0.8% -1.0% -1.5% -2% -3% 2000 Source: STR 2001 2002 Reported Estimated 3.0% 2.4% 0.6% 0.1% 2003* 2004* Total United States In Construction – Rooms in Thousands 2002 - 2003 140 130 2003 2002 120 110 100 90 80 70 60 Jan Feb Source: STR, PPR, Dodge Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total United States Rooms Under Construction by Scale – In Thousands December 2003 20 17.4 15 14.7 15.7 15.1 10 4.2 5 3.6 0 Upper Upscale Source: STR, PPR, Dodge Upscale Mid w F&B Mid w/o F&B Economy Unaffiliated Total Pipeline Under Construction By Scale Luxury Upper Up Upscale Mid w/F&B Mid w/out F&B Economy Independent Total United States Active Development Pipeline - Rooms Change From Last Year Dec 2003 Dec 2002 Change % Chg In Construction 70,818 85,463 (14,645) -17.1% Final Planning 16,446 25,253 (8,807) -34.9% Planning 185,179 214,260 (29,081) -13.6% In Pre-Planning 138,065 130,852 7,213 5.5% Total Development 410,508 (45,320) -9.9% Source: STR, PPR, Dodge 455,828 STR/PPR/FW Dodge Pipeline Historic Attrition Rates 5.0% 20.0% 53.0% 74.0% 95.0% 80.0% 47.0% 26.0% PrePlanning Planning Opened Source: STR Final Planning Abandoned Under Constrution U.S. Economic Outlook Blue Chip Economic Indicators 2003P 2004F 2005F Real GDP +3.1% +4.6% +3.7% CPI +2.3% +1.7% +2.1% Corporate Profits +16.8% +15.2% +9.2% Disp Personal Income +2.6% +4.2% +3.4% 6.0% 5.7% 5.4% Unemployment Rate Total United States Supply/Demand Percent Change 1998 – 2004P 5 4 3 2 1 0 -1 -2 -3 -4 -5 2.8 2.3 1.6 1.2 1.7 1.2 0.3 Supply % Chg Demand % Chg -3.4 2000 Source: STR 4 3.5 2001 2002 2003 2004P Total United States Occupancy Percent 1998 – 2004P 65 63.2 60.8 59.7 60 58.9 59.2 2002 2003 55 2000 Source: STR 2001 2004P Total United States ADR Percent Change 1998 – 2004P 10.0 5.4 5.0 2.4 0.1 0.0 -1.4 -1.4 2001 2002 -5.0 2000 Source: STR 2003 2004P Total United States Average Daily Rate 1998 – 2004P 90 85.37 85 85.11 84.2 83.01 83.12 2002 2003P 80 75 70 2000 Source: STR 2001 2004P Total United States RevPAR Percent Change 1998 – 2004P 15.0 10.0 6.1 5.2 5.0 0.6 0.0 -2.6 -5.0 -6.9 -10.0 2000 Source: STR 2001 2002 2003 2004P U.S. Lodging Outlook * Supply Growth Remains Stable * Demand Hits Record Levels * Occupancy Rising * Regain Control over Room Rates * Economy Rebounding – Return of the King * Long Term Optimism Source: STR