australia hotel market outlook q1 2011
DESCRIPTION
Has the Australian hotel sector fully recovered from the Global Financial Crisis?Results for 2010 and a forecast for 2011 and beyond for key Australian hotel markets.TRANSCRIPT
Tourism, Hospitality & Leisure
Hotel Market Outlook2010 in review; 2011 and beyond2010 in review; 2011 and beyond
Rutger SmitsNational Leader – Tourism, Hospitality & Leisure
10 February 2011 1Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure
Economic Update
10 February 2011 2Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure
The global economy
• The US economy remains weak
• The Eurozone sees recovery in the developed countries
• The UK is in a much stronger position
• China has become very competitive (cheap) due to
10 February 2011 3Hotel Market Outlook - Q1 2011
• China has become very competitive (cheap) due to the weak US$
• India is getting close to 9% GDP growth
• The Asian countries are beginning to slow down from a rapid recovery
• New Zealand benefits from trade with Australia and China
• Australia has been a star performerBusiness Outlook
Dec. Quarter 2010
Tourism, Hospitality & Leisure Global accommodation performance indicators
10.0
15.0
20.0
25.0
STR Global: % Change Year-end 2010 vs year-end 2009
Based on comparison in US$
10 February 2011 4Hotel Market Outlook - Q1 2011
-5.0
-
5.0
10.0
Asia Pacif ic Americas Europe Middle East/Af rica
Occ% ADR RevPAR
Tourism, Hospitality & Leisure Global accommodation performance indicators
10.0
15.0
20.0
25.0
STR Global: % Change Year-end 2010 vs year-end 2009
Based on comparison in US$
10 February 2011 5Hotel Market Outlook - Q1 2011
-5.0
-
5.0
10.0
Australia & Oceania
North America Western Europe Middle East
Occ% ADR RevPAR
Tourism, Hospitality & Leisure Global accommodation performance indicators
USD 150
USD 175
USD 200
65.0
70.0
75.0
STR Global: Room Occ% and ADR Year-end 2010
10 February 2011 6Hotel Market Outlook - Q1 2011
USD 75
USD 100
USD 125
50.0
55.0
60.0
Australia & Oceania
North America Western Europe
Middle East
Occ% ADR
Tourism, Hospitality & Leisure
Global trends in the accommodation sector
• As performance improves, so will:
• Industry confidence
• Property values
• Availability of debt
• Transaction volumes
10 February 2011 7Hotel Market Outlook - Q1 2011
• Development pipeline
• Emerging markets:
• BRIC (Brazil, Russia, India, China)
• “Silver Market” or “Grey Nomads”
• Middle class looking for value for money
• Experience seekers
• Focus on:
• Technology
• Social media
• Environmental sustainability
Tourism, Hospitality & Leisure
The Australian economy
• We are the Lucky Country: providing in abundance
what a large number of rapidly industrialising
economies need most: mineral resources
• Businesses are spending big, but this also pushes
10 February 2011 8Hotel Market Outlook - Q1 2011
interest rates up and holds the A$ at parity
• The recent floodings and cyclone Yasi are likely to
add to labour and material shortages, driving up
construction cost but potentially also adding to
overall economic growth
• Retail and recreation will remain under pressure,
as the A$ remains strongBusiness Outlook
Dec. Quarter 2010
Tourism, Hospitality & Leisure
Economic impact on the accommodation industry
• International departures are now more numerous than arrivals
• Japanese and Korean markets have lost interest in Australia whilst “mainstay markets” such as the US and UK are under pressure
10 February 2011 9Hotel Market Outlook - Q1 2011
and UK are under pressure
• “Replacement markets” such as China are growing but are still lacking individual spending power
• Assuming the A$ will weaken by 2012, leisure tourism should see the beginnings of a recovery
• A downturn in foreign students will see the number of foreign workers in the tourism sector declining
• Summary: a booming trade in the corporate segment, whilst the leisure segment and in particular resort destinations remain under pressure
Tourism, Hospitality & Leisure
International arrivals and departures
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
10 February 2011 10Hotel Market Outlook - Q1 2011
-2,000,000
-1,000,000
0
1,000,000
2,000,000
3,000,000
Residents Departing Tourists Arriving Net Tourist Exchange
Tourism, Hospitality & Leisure
Economic impact of recent natural disasters
• Most of the flooding occurred inland: coastal infrastructure remains intact, except in selected areas in Tropical North Queensland (TNQ) affected by the cyclone Yasi
• A perception of general devastation is holding back
10 February 2011 11Hotel Market Outlook - Q1 2011
• A perception of general devastation is holding back demand and is resulting in cancellations
• The significant rebuilding will be a boost to economic activity and stronger infrastructure in the longer term
• Possible impact on domestic spend on leisure and recreational activity, exacerbated by the increasing cost of household supplies, insurance premiums, budget cuts and additional taxes and levies
• Further pressure to the already struggling leisure market, especially in TNQ
Tourism, Hospitality & Leisure
What influences demand in Australia?
• Corporate demand
• Strength of the economy
• Propensity of corporate world to travel (MICE)
• Relatively unaffected by health scares etc
• Heavily affected by Global Financial Crisis
10 February 2011 12Hotel Market Outlook - Q1 2011
• Heavily affected by Global Financial Crisis
• Leisure demand
• Disposable income
• Sentiment
• Heavily affected by interest rates, inflation, employment
• International demand (corporate and leisure)
• All of the above
• Exchange rates
• Airfares
Tourism, Hospitality & Leisure
Econometric forecasting model
• Correlate economic outlook ( ) and demand for accommodation (ABS)
• Create a mathematical formula for a Demand Index
10 February 2011 13Hotel Market Outlook - Q1 2011
• Fine-tune the Demand Index with data from STR Global
• Match future demand forecast to the Demand Index
• Match demand forecast to supply projections to calculate room occupancy
• Correlate room occupancy to the change in achieved average room rate and project future rate changes
Tourism, Hospitality & Leisure
Access Economics indicators
• Final Demand: the sum of consumption and
investment spending by the public and private
sectors = economic activity
• Retail Spend: disposable household income =
10 February 2011 14Hotel Market Outlook - Q1 2011
leisure spend
• Employment: corporate activity = domestic
corporate segment.
• International Arrivals: reflecting the impact of
foreign exchange rates.
• Supply: new hotel rooms entering the market.
Tourism, Hospitality & Leisure
Demand Index
I = α∆D+ β∆R + γ∆E + δ∆A + ε∆FX + ζ∆S
V
I = Demand Index
α∆D = weighted change in economic Demand
β∆R = weighted change in Retail spendβ∆R = weighted change in Retail spend
γ∆E = weighted change in Employment
δ∆A = weighted change in international Arrivals
ε∆FX = weighted Trade Weighted Foreign Exchange Index (TWI)
ζ∆S = weighted change in the supply of hotels rooms
V = volatility index
The components of the index are different for each market
10 February 2011 15Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure
Australia
10 February 2011 16Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure Australian Economic Indicators – Act 1993 – F’cast 2013
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
10 February 2011 17Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply
Tourism, Hospitality & Leisure Australia: Accommodation Demand Trend
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
10 February 2011 18Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply ∆ Occ Rooms
Tourism, Hospitality & Leisure Australia: Econometric Accommodation Demand Index
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
10 February 2011 19Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply ∆ Occ Rooms ∆ INDEX
Tourism, Hospitality & Leisure Australia: Accommodation Occupancy Trend
60.0%
62.0%
64.0%
66.0%
68.0%
70.0%
10 February 2011 20Hotel Market Outlook - Q1 2011
50.0%
52.0%
54.0%
56.0%
58.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ%
Tourism, Hospitality & Leisure Australia: Occupancy Trend vs. Rate Change
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
60.0%
62.0%
64.0%
66.0%
68.0%
70.0%
10 February 2011 21Hotel Market Outlook - Q1 2011
-12.5%
-10.0%
-7.5%
-5.0%
-2.5%
50.0%
52.0%
54.0%
56.0%
58.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% ∆ Room Rate
Tourism, Hospitality & Leisure Australia: Occupancy, Rate and RevPAR Trends
$100
$120
$140
$160
$180
$200
60.0%
62.0%
64.0%
66.0%
68.0%
70.0%Stats Occ% ADR RevPAR
Q3 2008 64.5 137 88
Q4 2009 62.0 136 84
YE 2009 62.0 136 84
YE 2010 63.9 139 89
YE 2011 65.6 148 97
10 February 2011 22Hotel Market Outlook - Q1 2011
$0
$20
$40
$60
$80
50.0%
52.0%
54.0%
56.0%
58.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% Room Rate Trend RevPAR Trend
Tourism, Hospitality & Leisure Australia: Occupancy, Inflated Rate and RevPAR Trends
$100
$120
$140
$160
$180
$200
60.0%
62.0%
64.0%
66.0%
68.0%
70.0%
10 February 2011 24Hotel Market Outlook - Q1 2011
$0
$20
$40
$60
$80
50.0%
52.0%
54.0%
56.0%
58.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% Infl Room Rate $ Infl RevPAR $
Tourism, Hospitality & Leisure
Sydney, NSW
10 February 2011 25Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure Sydney: Econometric Accommodation Demand Index
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%Project Rooms Grade Timing
Star City 172 5 star Q4 ‘11
Meriton Haym 270 4 star Q4 ’11
QT State Th. 200 4½ star Q4 ’12
Novotel DH 96 4 star 2013
Barangaroo 250 5 star 2014
South DH 500+ mix 2015
10 February 2011 26Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply ∆ Occ Rooms ∆ INDEX
Tourism, Hospitality & Leisure Sydney: Occupancy, Rate and RevPAR Trends
$175
$200
$225
$250
$275
$300
78.0%
80.0%
82.0%
84.0%
86.0%
88.0%Stats Occ% ADR RevPAR
Q2 2008 82.0 185 151
Q3 2009 78.8 171 135
YE 2009 80.3 169 136
YE 2010 85.6 176 151
YE 2011 87.0 196 171
10 February 2011 27Hotel Market Outlook - Q1 2011
$50
$75
$100
$125
$150
68.0%
70.0%
72.0%
74.0%
76.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% Room Rate Trend RevPAR Trend
Tourism, Hospitality & Leisure
Melbourne, VIC
10 February 2011 28Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure Melbourne: Econometric Accommodation Demand Index
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%Project Rooms Grade Timing
Sheraton Lt Col 170 5 Q4 ’13
Marriner Exh St 100+ 5 2014
Windsor Redev. 110 5 2015
10 February 2011 29Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply ∆ Occ Rooms ∆ INDEX
Tourism, Hospitality & Leisure Melbourne: Occupancy, Rate and RevPAR Trends
$175
$200
$225
$250
$275
$300
76.0%
78.0%
80.0%
82.0%
84.0%
86.0%Stats Occ% ADR RevPAR
Q3 2008 81.8 176 144
Q4 2009 77.5 169 131
YE 2009 77.3 171 132
YE 2010 79.8 173 138
YE 2011 82.0 191 156
10 February 2011 30Hotel Market Outlook - Q1 2011
$50
$75
$100
$125
$150
66.0%
68.0%
70.0%
72.0%
74.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% Room Rate Trend RevPAR Trend
Tourism, Hospitality & Leisure
Brisbane, QLD
10 February 2011 31Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure Brisbane: Econometric Accommodation Demand Index
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%Project Rooms Grade Timing
Emporium 2 132 5 Q4 ’11
Novotel Elizab. 316 4 Q2’12
Tabcorp K Will. 400 5 2014
10 February 2011 32Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply ∆ Occ Rooms ∆ INDEX
Tourism, Hospitality & Leisure Brisbane: Occupancy, Rate and RevPAR Trends
$125
$150
$175
$200
$225
$250
73.5%
76.0%
78.5%
81.0%
83.5%
86.0%Stats Occ% ADR RevPAR
Q2 2008 80.4 158 127
Q4 2009 74.7 154 115
YE 2009 74.7 154 115
YE 2010 78.8 161 127
YE 2011 82.0 177 144
10 February 2011 33Hotel Market Outlook - Q1 2011
$0
$25
$50
$75
$100
61.0%
63.5%
66.0%
68.5%
71.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% Room Rate Trend RevPAR Trend
Tourism, Hospitality & Leisure
Perth, WA
10 February 2011 34Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure Perth: Econometric Accommodation Demand Index
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%Project Rooms Grade Timing
Beaufort St Cxx
Treasury Bldg 46 5 2012
Misc projects ?
10 February 2011 35Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply ∆ Occ Rooms ∆ INDEX
Tourism, Hospitality & Leisure Perth: Occupancy, Rate and RevPAR Trends
$175
$200
$225
$250
$275
$300
77.5%
81.0%
84.5%
88.0%
91.5%
95.0%
Stats Occ% ADR RevPAR
Q1 2009 83.9 159 133
Q1 2010 80.1 151 121
YE 2009 81.2 154 125
YE 2010 82.5 158 130
YE 2011 88.4 178 157
10 February 2011 36Hotel Market Outlook - Q1 2011
$50
$75
$100
$125
$150
60.0%
63.5%
67.0%
70.5%
74.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% Room Rate Trend RevPAR Trend
Tourism, Hospitality & Leisure
Adelaide, SA
10 February 2011 37Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure Adelaide: Econometric Accommodation Demand Index
10.0%
15.0%
20.0%
25.0%
30.0%
35.0% Project Rooms Grade Timing
Airport Hotel 200 4 2013?
Currie St 301 5 ?
CML Bldg 160 4 ?
Majestic ?
10 February 2011 38Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply ∆ Occ Rooms ∆ INDEX
Tourism, Hospitality & Leisure Adelaide: Occupancy, Rate and RevPAR Trends
$125
$150
$175
$200
$225
$250
68.5%
71.0%
73.5%
76.0%
78.5%
81.0%Stats Occ% ADR RevPAR
Q4 2008 77.2 142 110
Q4 2009 75.3 140 105
YE 2009 75.3 140 105
YE 2010 76.7 143 110
YE 2011 76.0 149 113
10 February 2011 39Hotel Market Outlook - Q1 2011
$0
$25
$50
$75
$100
56.0%
58.5%
61.0%
63.5%
66.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% Room Rate Trend RevPAR Trend
Tourism, Hospitality & Leisure
Canberra, ACT
10 February 2011 40Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure Canberra: Econometric Accommodation Demand Index
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%Project Rooms Grade Timing
?
10 February 2011 41Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply ∆ Occ Rooms ∆ INDEX
Tourism, Hospitality & Leisure Canberra: Occupancy, Rate and RevPAR Trends
$125
$150
$175
$200
$225
$250
68.5%
71.0%
73.5%
76.0%
78.5%
81.0%
Stats Occ% ADR RevPAR
Q1 2009 70.1 150 105
Q2 2009 68.8 146 100
YE 2009 70.5 146 103
YE 2010 75.7 151 115
YE 2011 75.0 169 127
10 February 2011 42Hotel Market Outlook - Q1 2011
$0
$25
$50
$75
$100
56.0%
58.5%
61.0%
63.5%
66.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% Room Rate Trend RevPAR Trend
Tourism, Hospitality & Leisure
Gold Coast, QLD
10 February 2011 43Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure Gold Coast: Econometric Accommodation Demand Index
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%Project Rooms Grade Timing
Hilton I 134 5 Q4 ’10
Hilton II 169 + 116 5 Q3 ’11
Tabcorp 200 5 2014
Serviced Apts Mary St
10 February 2011 44Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply ∆ Occ Rooms ∆ INDEX
Tourism, Hospitality & Leisure Gold Coast: Occupancy, Rate and RevPAR Trends
$125
$150
$175
$200
$225
$250
63.5%
66.0%
68.5%
71.0%
73.5%
76.0%Stats Occ% ADR RevPAR
Q1 2008 69.9 134 94
Q 2009 65.8 134 88
YE 2009 66.4 133 88
YE 2010 68.4 133 91
YE 2011 69.9 139 97
10 February 2011 45Hotel Market Outlook - Q1 2011
$0
$25
$50
$75
$100
51.0%
53.5%
56.0%
58.5%
61.0%
Ma
r-9
3
Se
p-9
3
Ma
r-9
4
Se
p-9
4
Ma
r-9
5
Se
p-9
5
Ma
r-9
6
Se
p-9
6
Ma
r-9
7
Se
p-9
7
Ma
r-9
8
Se
p-9
8
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% Room Rate Trend RevPAR Trend
Tourism, Hospitality & Leisure
TNQ, QLD
10 February 2011 46Hotel Market Outlook - Q1 2011
Tourism, Hospitality & Leisure TNQ: Econometric Accommodation Demand Index
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%Project Rooms Grade Timing
?
10 February 2011 47Hotel Market Outlook - Q1 2011
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
∆ Econ. Demand ∆ Employment ∆ Retail Spend ∆ Int'l Arrivals ∆ Supply ∆ Occ Rooms ∆ INDEX
Tourism, Hospitality & Leisure TNQ: Occupancy, Rate and RevPAR Trends
$125
$150
$175
$200
$225
$250
63.5%
66.0%
68.5%
71.0%
73.5%
76.0%Stats Occ% ADR RevPAR
Q4 2006 64.3 127 82
Q2 2010 54.4 120 65
YE 2009 55.0 121 66
YE 2010 55.3 119 66
YE 2011 57.0 119 68
10 February 2011 48Hotel Market Outlook - Q1 2011
$0
$25
$50
$75
$100
51.0%
53.5%
56.0%
58.5%
61.0%
Ma
r-9
9
Se
p-9
9
Ma
r-0
0
Se
p-0
0
Ma
r-0
1
Se
p-0
1
Ma
r-0
2
Se
p-0
2
Ma
r-0
3
Se
p-0
3
Ma
r-0
4
Se
p-0
4
Ma
r-0
5
Se
p-0
5
Ma
r-0
6
Se
p-0
6
Ma
r-0
7
Se
p-0
7
Ma
r-0
8
Se
p-0
8
Ma
r-0
9
Se
p-0
9
Ma
r-1
0
Se
p-1
0
Ma
r-1
1
Se
p-1
1
Ma
r-1
2
Se
p-1
2
Ma
r-1
3
Se
p-1
3
Room Occ% Room Rate Trend RevPAR Trend
Tourism, Hospitality & Leisure
Summary and Conclusions
• The economic outlook for Australia is positive
• Growth for the Corporate and MICE segments
• Leisure segment remains weak
• City markets are underway to full recovery to pre-GFC levels
10 February 2011 49Hotel Market Outlook - Q1 2011
pre-GFC levels
• Unprecedented room occupancy levels
• Average room rates in the cities should see strong growth
• Average room rates in leisure destinations will remain under pressure
• New supply remains very limited
• 2 to 3 year window for significant profit growth
Tourism, Hospitality & Leisure
About Deloitte Tourism, Hospitality & Leisure
A global industry network
• Dedicated THL practices
• Global leadership
• Shared clients
10 February 2011 50Hotel Market Outlook - Q1 2011
Deloitte THL in Australia
• Established November 2010
• Multi-disciplinary
• Across geographies
• Not just accommodation!
Tourism, Hospitality & Leisure
THL Australia Team
Max PerssonCorporate Tax, [email protected]
Alex CollinsonAssurance, [email protected]
Ron de WitMarket Advisory, [email protected]
Rutger SmitsNational Leader, [email protected]
10 February 2011 51Hotel Market Outlook - Q1 2011
Andrew JonesCorporate Finance, [email protected]
[email protected]@deloitte.com.au
Bryon MerzeoSTR Global, [email protected]
Weng ChingDeloitte Private, [email protected]
Ian BreedonReal Estate, [email protected]
David LombeCorporate Reorganisation, [email protected]
Shauna CoffeyEnvironment & Sustainability, [email protected]
Tourism, Hospitality & Leisure
THL Australia Team
Andrew BethuneTHL Victoria, [email protected]
Sneza PelusiReal Estate, [email protected]
John GreigCorporate Reorganisation, [email protected]
Mark RowberryDeloitte Private, [email protected]
10 February 2011 52Hotel Market Outlook - Q1 2011
Andrew ReidAssurance, [email protected]
Paul FogartyCorporate Tax, [email protected]
Steve ShirtliffCorporate Finance, Melbournesshirtliff @deloitte.com.au
[email protected] [email protected]
Alyson TrottmanDeloitte Private, [email protected]
Steve HussenetConsulting, [email protected]
Andrew AnnandCorporate Finance, [email protected]
Tourism, Hospitality & Leisure
Call Deloitte THL when
• You need accounting services
• You need effective tax solutions
• You need market intelligence
• You are building or buying a property or business
• You are rebranding and/or repositioning a business
10 February 2011 53Hotel Market Outlook - Q1 2011
• You are rebranding and/or repositioning a business
• You need to restructure and/or foreclose on a business
• You need asset management or owners’ representation
• You need to rethink and/or redefine your corporate strategy
• You need a human capital plan
• You need a social media strategy
• You need to redefine your online presence
• You need an environmental & sustainability plan
Tourism, Hospitality & Leisure
General information only
This presentation contains general information only, and none of Deloitte Touche Tohmatsu Limited, Deloitte Global Services Limited, Deloitte Global Services Holdings Limited, the Deloitte Touche
Tohmatsu Verein, any of their member firms, or any of the foregoing’s affiliates (collectively the “Deloitte Network”) are, by means of this presentation, rendering accounting, business, financial,
investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making any decision or taking any action that
may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person
who relies on this publication.
Confidential This document and the information contained in it is confidential and should not be used or disclosed in any way without our prior consent.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and
independent entity. Please see www.deloitte.com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 140 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed
wherever they operate. Deloitte's approximately 169,000 professionals are committed to becoming the standard of excellence.
About Deloitte Australia
In Australia, the member firm is the Australian partnership of Deloitte Touche Tohmatsu. As one of Australia’s leading professional services firms. Deloitte Touche Tohmatsu and its affiliates provide
audit, tax, consulting, and financial advisory services through approximately 4,500 people across the country. Focused on the creation of value and growth, and known as an employer of choice for
innovative human resources programs, we are dedicated to helping our clients and our people excel. For more information, please visit our web site at www.deloitte.com.au.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
© 2011 Deloitte Touche Tohmatsu
10 February 2011 54Hotel Market Outlook - Q1 2011