©2014 lodging econometrics, inc. |


US Lodging Real Estate Cycle

Early Operating Recovery

Early Transaction Recovery

Main Street Debt Availability

Full Operating Recovery

Conversions/Renovations

10 11 12 13 14 15 16 17 18 19

New Project Announcements

Early Wall St. Activity

Peak Transaction Activity

Peak New Hotel Openings

Peak Earnings

Full Wall St. Participation

Cycle PeakLending

Development

Earnings

Transactions

X


Rooms (000s)

Projs 2,753 3,020

373335 341

383421

3,122 2,757 3,311

Under Construction Starts in Next 12 Mos Early Planning Forecast

460

535

Prior Peak 2Q08: 785K Rooms, 5,883 Projects

US Construction Pipeline by Projects and RoomsFall 2014

10 11 12 13 2Q140

120

240

360

480

600

373335 341

383421

Year End 14 Year End 15 Year End 16

585

515

455


Fall 2014

Q211 Q212 Q213 Q2140

200

400

600

800

1000

1200

At 2Q 2014 970 Projs

126,380 Rms

US Under Construction Trends by Projects: Quarter over Quarter


US Construction Start Trends by Projects: Quarter over Quarter Fall 2014

Q211 Q212 Q213 Q2140

100

200

300

400

500

600

At 2Q 2014 259 Projs32,515 Rms


Fall 2014

Q211 Q212 Q213 Q2140

200

400

600

800

1000

1200

At 2Q 2014 396 Projs49,490 Rms

US New Project Announcement Trends by Projects:Quarter over Quarter


Fall 2014

Q211 Q212 Q213 Q2140

400

800

1200

1600

2000

2400

At 2Q 2014 913 Projs159,574 Rms

US Announced Conversion & Renovation Trends by Projects: Quarter over Quarter


US Construction Pipeline by Project Stage: Quarter over Quarter

Q4 13 1Q 14 2Q 14

Proj Rms Proj Rms Proj Rms

Under Construction 793 101,735 885 114,337 970 126,380

Starts Next 12 Month 1,156 141,140 1,327 161,748 1,354 161,204

Early Planning 1,071 140,083 1,014 131,150 987 133,803

Total Pipeline 3,020 382,958 3,226 407,235 3,311 421,387

Fall 2014


2%

7%

25%

28%6%2%

4%

27%

Luxury

Upper Upscale

Upscale

Upper Midscale

Midscale

Economy

Casino

Unbranded

Projs Rooms

31 10,195

133 28,824

793 104,543

1,205 116,720

329 24,274

92 7,565

44 15,349

684 113,917

Total 3,311 421,387

US Construction Pipeline by Chain Scale: with an Unbranded Breakout Fall 2014


5%

10%

35%35%

9%

3%4%

Luxury

Upper Upscale

Upscale

Upper Midscale

Midscale

Economy

Casino

Unbranded

Projs Rooms

84 20,374

187 42,237

1,048 146,732

1,386 146,036

440 39,924

122 10,735

44 15,349

Included Included

Total 3,311 421,387

US Construction Pipeline by Chain Scale: with Unbranded Included Fall 2014


* = Pipeline of rooms as a percentage of current Census Projs Rms *

New York 177 30,622 28.5

Houston 115 13,306 18.3

Washington DC 81 13,298 12.2

Los Angeles 58 11,642 12.0

Miami 58 11,342 22.8

US Construction Pipeline Total by Rooms:Top 10 Markets Fall 2014


US Construction Pipeline Total by Rooms:Top 10 Markets

* = Pipeline of rooms as a percentage of current Census Projs Rms *

Chicago 43 9,018 8.2

Austin 52 8,216 26.5

San Diego 34 8,011 13.0

Boston 49 7,572 14.3

Seattle 39 7,264 17.4

Fall 2014


Actual Forecast * = growth rate

2012

2013

2014

2015

2016

Rooms

97,540

44,584

84,844

70,249

53,076

LE’s US Forecast for New Hotel Openings *1.9%

*1.7%

*1.3 – 1.4%

*1.1%

*0.9%

Fall 2014


Forecast for New Hotel Openings: by Chain Scale as of 2Q13 * = growth rate 2014 2015 2016

(IncludesIndependents) Projs Rms * Projs Rms * Projs Rms *

Luxury 14 3,921 2.1 24 4,721 2.5 13 2,755 1.4

Upper Upscale

26 5,151 0.8 37 5,665 0.8 42 8,876 1.3

Upscale 201 25,703 3.6 249 31,252 4.3 253 34,019 4.5

Upper Midscale

262 24,821 2.1 331 31,334 2.6 389 37,926 3.1

Midscale 82 5,600 0.9 105 7,505 1.2 131 9,463 1.5

Economy 33 2,485 0.2 34 2,722 0.2 36 2,982 0.2

Casino 12 2,568 1.2 5 1,645 0.7 7 1,519 0.7

LE’s US Forecast for New Hotel Openings:By Chain Scale Fall 2014


Under Construction Planning Total Pipeline

Proj Rms Proj Rms Proj Rms

United States

970 126,380 2,341 295,007 3,311 421,387

Other Americas

463 76,684 497 71,742 960 148,426

EMEA 681 143,826 645 110,410 1,326 254,236

Asia Pac 2,791 567,409 883 189,798 3,674 757,207

Global 4,905 914,299 4,366 666,957 9,271 1,581,256

Global Construction Pipeline Total:By Region Fall 2014


Projs Rms

United Kingdom 202 28,665

Russia 109 22,497

Germany 98 18,343

Turkey 67 11,617

Spain 37 5,318

Europe Construction Pipeline Total by Rooms:Top 5 Countries Fall 2014


Projs Rms

China 2,409 521,452

India 370 54,815

Indonesia 338 52,495

Japan 147 28,172

Malaysia 67 17,219

Asia Pacific Construction Pipeline Total by Rooms:Top 5 Countries Fall 2014


08 09 10 11 12 13 2Q YTD >200 Rooms 72 47 90 128 112 139 75 <200 Rooms 829 381 425 560 469 819 244 Total Trans 901 428 515 688 581 958 319

0

50

100

150

200

250

300

121K

197K

72K

107K

152K

77K

Ave

rage

Sel

ling

Pric

e P

er R

oom

(00

0s)

US Transactions with a Reported Selling Price

211K

76K

Fall 2014


US Lodging Real Estate Total Investment by Dollars1

As Sellers As Buyers

$ Millions 2012 2013 2Q YTD 2012 2013 2Q YTD

Privately Held Companies

Equity Funds 2,908 5,273 2,254 2,876 4,497 1,770

Hotel Companies 2,257 5,253 2,235 2,180 2,929 1,332

Individual Owners 1,962 1,483 691 1,010 1,254 888

Publicly Traded Companies

REITs 968 2,993 753 3,422 5,024 2,722

Hotel Companies 1,060 1,052 878 15 1,058 405

Other Entities 731 1,127 707 384 2,420 402

Total Dollar Volume 9,886 17,182 7,519 9,886 17,182 7,519

1 For Transactions with a reported Selling Price

Fall 2014


US Transactions By Chain Scale1 by Number of Hotels Sold

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

2010 2011 2012 2013 2Q YTD1Includes Like Kind Independents

515

688

581

958

319

Fall 2014


Forecast

• The overall US Market will continue to remain robust in several areas including Transactions.

• The Construction Pipeline will continue to grow but it will be dominated by projects with less than 200 rooms in the Upscale and Upper Midscale Chain Scales.

• Highest rate markets and gateway cities will continue to draw eager developers looking for land or adaptive reuse projects.

• Availability of debt will continue to improve.

• Profits will continue to rise as we have a good four-year run in front of us.

©2014 lodging econometrics, inc. |

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