Transcript
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Hotel InduSTRy Overview Hoosier Hospitality Conference

Lauren Faulkner

Business Development Executive

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Today’s Agenda: March 12, 2014

• Total U.S. Review

• Top Markets Review

• Indiana Performance Overview

• Pipeline

• Forecast

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www.hotelnewsnow.com Click on “Data Presentations”

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Total U.S. Review

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January 2014 (12 MMA): Strongest Demand Ever

% Change

• Room Supply* 1.8 bn 0.7%

• Room Demand* 1.1 bn 2.2%

• Occupancy 62.3% 1.4%

• A.D.R.* $110 3.7%

• RevPAR* $69 5.2%

• Room Revenue* $123 bn 6.0%

January 12 MMA 2014, Total US Results * All Time High

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Quarterly RevPAR % Change: ADR Drives Growth

8.8 8.1 8.0 7.9 7.9 7.9

5.1

6.5 6.4

4.9 5.5

5.1

Q1 Q2 Q3 Q4

2011 2012 2013

* Total US, RevPAR % Change, by Quarter, Q1 2011 – Q4 2013

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Demand & Supply Move Back Towards Long Run Averages

-8

-4

0

4

8

1990 2000 2010

Supply Demand

-6.9%

-0.9%

- 4.7%

Total U.S., Supply & Demand % Change, 12 MMA 1/1990 – 1/2014

8.0%

2.2%

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ADR Growth Anemic This Time Around

-10

-5

0

5

1990 2000 2010

Demand % Change

ADR % Change -4.5%

7.5% 6.8%

-8.7%

3.7%

Total U.S., ADR & Demand % Change, 12 MMA 1/1990 – 1/2014

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OCC Will Probably Continue To Slow. Steady ADR Growth.

-10

-5

0

5

1990 2000 2010

OCC % Change

ADR % Change

-6.7%

7.5%

6.8%

-9.7%

6.2%

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 1/2014

4.2%

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Positive RevPAR Growth For The Foreseeable Future

-20

-15

-10

-5

0

5

10

1990 2000 2010

-16.8%

-2.6%

-10.1%

9% 8.6%

Total U.S., RevPAR % Change, 12 MMA 1/1990 – 1/2014

65 Months 41 Mo. 112 Months

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Chain Scale Review

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Scales: Upscale Supply Growth Now Noticeable

0.7

2.1

4.0

-0.7

1.7

0.6 0.7

2.7

4.4

1.4

5.7

4.6

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

Supply Demand

*Supply / Demand % Change, by Scale, January 2014

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Scales: ADR Growth Strong For Luxury & Economy Hotels

0.0

0.6 0.4

2.1

4.0 4.0

5.6

3.1 2.8

2.3 2.5

3.3

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

Occupancy ADR

*OCC / ADR % Change, by Scale, January 2014

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Scales: RevPAR Catches Up To Prior Record Highs

$213

$113

$84

$62

$44 $31

$216

$116

$87

$64

$43 $30

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

2007 2013

*RevPAR $, by Scale, 2007 & 2013

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Segmentation

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3%

4%

5%

6%

Jan 12 Jul 12 Jan 13 Jul 13

Demand

ADR

*Transient Demand and ADR % Change, 12 MMA, 1/2012 – 1/2014

Transient Growth Rates Healthy

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-2%

-1%

0%

1%

2%

3%

4%

Jan 12 Jul 12 Jan 13 Jul 13

Demand

ADR

*Group Demand and ADR % Change, 12 MMA, 1/2012 – 1/2014

Is “No Group Demand Growth” The New Normal?

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Transient Occupancy Share Increases

43% 57%

2005

Group

Transient

36%

64%

2013

Group

Transient

*Transient and Group Occupancy as Share of Total OCC, 2005 and 2013

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Transient ADR Premium Not As Strong As In Last Upturn

$10

$15

$20

$25

1 year 2 years 3 years

Starting 2005

Starting 2011

*Transient ADR Premium over Group ADR, 12 MMA, 1/05-12/07 & 1/11-1/14

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Markets

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January 2014 RevPAR: Best / Worst Performing Markets

Market RevPAR %

Change Market RevPAR %

Change

Florida Keys 23.7 Omaha, NE -5.3

San Francisco/San Mateo, CA 19.3 Central New Jersey -5.4

Philadelphia, PA-NJ 17.9 North Dakota -5.8

Denver, CO 16.5 Mississippi -6.0

Myrtle Beach, SC 16 North Carolina East -8.1

Wyoming 15.9 Pennsylvania Area -8.6 West Palm Beach

Boca Raton, FL 15.8 California North Central -9

California Central Coast 15.7 Washington, DC-MD-VA -23

Los Angeles-Long Beach, CA 15.2 Long Island -29.4

San Jose-Santa Cruz, CA 15.1 New Jersey Shore -32.6

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January 2014 ADR: Best / Worst Performing Markets

Market ADR % Change Market

ADR % Change

Florida Keys 13.0 Chicago, IL -1.7

San Francisco/San Mateo, CA 11.9 Chattanooga, TN-GA -1.8

San Jose-Santa Cruz, CA 11.3 Kansas City, MO-KS -1.8

West Palm Beach-Boca Raton, FL 10.7 Jackson, MS -1.9

Los Angeles-Long Beach, CA 9.7 North Dakota -2.3

Oakland, CA 9.3 Baltimore, MD -3.3

Oahu Island, HI 8.6 New Jersey Shore -4.7

Maui Island, HI 8.6 Long Island -5.6

Bergen-Passaic, NJ 7.7 California North Central -5.9

Greenville-Spartanburg, SC 7.5 Washington, DC-MD-VA -17.6

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State of Indiana

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3.4

-1.3

-4.5

2.1

-2.5

2.9

-6.4

-9.0

-5.0

1.1

5.9 4.7

-1.2

3.5

1.1

4.9 3.7

3

6.8

0.9

4.3 3.4 5

8.5

0

1.8 1.8 0.6

2.4

Supply Demand Occupancy ADR RevPAR

2008 2009 2010 2011 2012 2013

State of Indiana- Key Performance Indicators % Change Full Year 2008 – 2013

Moderate Growth Among All KPIs

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-16

-8

0

8

16

2006 2007 2008 2009 2010 2011 2012 2013 2014

Supply % Chg Demand % Chg OCC % Chg ADR % Chg

Recovery?

Indiana: Supply, Demand, OCC, & ADR % Change Twelve Month Moving Average 2006 through January 2014

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$50

$60

$70

$80

$90

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Indiana: Actual ADR ($) Twelve Month Moving January 2001 thru January 2014

ADR Has Surpassed 2008 Peaks

$87

Sept. 08 $82.00

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1.6

-1.5

4 3.9

0.1

2.6

Indiana North Indiana South Indianapolis

Occupancy ADR RevPAR

1.9

1.9

-1.4

Indiana Markets - Occ / ADR / RevPAR % Change Twelve Month Moving Average January 2014

Growth in Most Indiana Markets

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55.2 54.9

61.8

$81.85 $81.00

$90.32

$45.19 $44.46

$55.83

Indiana North Indiana South Indianapolis

Occupancy ADR RevPAR

Indiana Markets - Occ / ADR / RevPAR Twelve Month Moving Average January 2014

Strongest Performance in Indianapolis

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63.8

61.8

55.2

55.0

53.8

49.7

Gary MSA

Indianapolis, IN Market

Indiana North Market

Evansville-Henderson MSA

Indiana South Market

Fort Wayne MSA

-3.5%

Indiana Markets & Sub-Markets: Occupancy & % Change Twelve Month Moving Average January 2014

4%

1.6%

-0.2%

-1.9%

0.7%

Gary Highest OCC % but Indianapolis Strongest OCC Growth

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$90.32

$81.85

$80.21

$78.59

$77.84

$72.67

Indianapolis, IN Market

Indiana North Market

Gary MSA

Evansville-Henderson MSA

Indiana South Market

Fort Wayne MSA

Indiana Markets & Sub-Markets: Actual ADR & % Change Twelve Month Moving Average Ending January 2014

-1.4%

2.3%

1.5%

4%

4.4%

1.9%

Strongest Rate Growth in Indiana South & Evansville

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Indiana Pipeline

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Indiana Customer Segmentation

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Indiana: Monthly Transient Room Demand (sold) January 2007 Through December 2013

400

500

600

700

800

900

1,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2007 2011 2012 2013

Dec. 2013.

672,954

rooms sold

Tho

usa

nd

s Transient Rooms Sold in August 2013 Out Pacing Prior Years

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Indiana: Monthly Transient ADR January 2007 Through December 2013

$70

$80

$90

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2007 2011 2012 2013

Dec.2012 $77.60

Transient ADR Surpasses 2007 Peaks (Mostly)

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Indiana: Monthly Group Room Demand (sold) January 2007 Through December 2013

200

300

400

500

600

700

800

900

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2007 2011 2012 2013

Dec. 2012

285,396 Tho

usa

nd

s April 2013 Group Rooms Sold Out Paced Prior Years

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Oklahoma: Monthly Group ADR January 2007 Through December 2013

$65

$75

$85

$95

$105

$115

$125

$135

$145

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2007 2011 2012 2013

Dec. 2013 $82.76

$136.80

Super Bowl XLVI Had Large Effect on Group ADRs

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Indiana North

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Indiana North Key Statistics Twelve Month Moving Average January 2014

% Change

• Hotels 410

• Room Supply 30,462

• Sample 72%

• Occupancy 54.5% 1.7%

• ADR $78.96 2.4%

• RevPAR $43.03 4.1%

• Room Revenue $477m 4.2%

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55% 54%

46% 48%

50% 52%

60% 58%

53% 56% 56%

59%

35

45

55

65

75

2007 2008 2009 2010 2011 2012 2013

Weekday Weekend

60%

52%

Indiana North Weekday / Weekend Occupancy % Year End 2006 – 2013

Occupancy almost back to 2007 peaks.. Both Weekday & Weekend!

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$76

$75

$72 $71 $73 $75 $76

$85 $82 $80

$79 $81 $83

$85

$50

$60

$70

$80

$90

$100

$110

$120

2007 2008 2009 2010 2011 2012 2013

Weekday Weekend

Indiana North- Weekday / Weekend ADR Year End 2006 – 2013

ADR Spread $6-$9

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Indiana North

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Indiana South

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Indiana South Key Statistics Twelve Month Moving Average January 2014

% Change

• Hotels 246

• Room Supply 18,810

• Sample 71%

• Occupancy 53.8% -1.9%

• ADR $77.84 1.5%

• RevPAR $41.86 -0.4%

• Room Revenue $287m 0.4%

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Indiana South Pipeline

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Indianapolis, IN

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Indianapolis Key Statistics Twelve Month Moving Average January 2014

% Change

• Hotels 274

• Room Supply 31,233

• Sample 86%

• Occupancy 61.8% 4.0%

• ADR $90.32 -1.4%

• RevPAR $55.83 2.6%

• Room Revenue $639m 2%

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60%

57%

50% 52%

55% 57%

58.1

66%

63% 60%

61% 63%

68%

2007 2008 2009 2010 2011 2012 2013

Weekday Weekend

58%

70%

Indianapolis Weekday / Weekend Occupancy % Year End 2006 – 2013

Weekend Occupancy Continues to Surpass Prior Peaks

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$90

89

$82 $82 $84

$90 $90 $93

$89

$82 $81

$84

$93 $91

2007 2008 2009 2010 2011 2012 2013

Weekday Weekend

Indianapolis Weekday / Weekend ADR Year End 2006 – 2013

Very Little Difference in ADR WD vs. WE

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4.1%

0.6%

3.6%

13.2

2.2

-2.3% -1.7%

-4.6%

-6.2

2.8 1.7%

-1.1% -1.1

6.2 5.1

IndianapolisSmalltowns

North Loop Southeast Airport/Speedway CBD

Occupancy ADR RevPAR

Indianapolis Tracts - Occ / ADR / RevPAR % Change Twelve Month Moving Average January 2014

Indianapolis Airport/Speedway Largest RevPAR Growth

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Indianapolis Market Breakdown - Occ / ADR / RevPAR Twelve Month Moving Average January 2014

55.7 61.3 58.4 59.1

70.4 $70.83

$82.12

$60.69

$69.33

$140.24

$39.45

$50.35

$35.42 $40.95

$98.68

Indy Smalltowns North Loop Southeast Airport/Speedway CBD

Occupancy ADR RevPAR

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Indianapolis Pipeline

Project Name Room Count Open Date

Holiday Inn

122 February 2015

Suburban Extended Stay 119

December 2014

Courtyard by Marriott 92

May 2014

Hampton Inn 100

March 2014

Sleep Inn 91

May 2014

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Pipeline

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US Pipeline: Construction Accelerates

Phase 2014 2013 % Change

In Construction 96 72 34%

Final Planning 137 96 42%

Planning 123 137 -10%

Active Pipeline 357 307 16%

*Total US Pipeline, by Phase, ‘000s Rooms, January 2014 and 2013

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Under Construction Rooms Mostly In Middle Segments

4.6

8.0

35.7

28.9

5.1

1.2

13.3

Luxury UpperUpscale

Upscale UpperMidscale

Midscale Economy Unaffiliated

*US Pipeline, Rooms Under Construction , ‘000s Rooms, by Scale, January 2014

67%

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Construction In Top 26 Markets: 12 With 2%+ Of Supply

*US Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, January 2014

Market Rooms UC % Of Existing Las Vegas, NV 169,480 0.0%

Oahu Island, HI 29,337 0.0%

Norfolk-Virginia Beach, VA 38,537 168 0.4%

Minneapolis-St Paul, MN-WI 38,450 190 0.5%

San Francisco/San Mateo, CA 51,167 312 0.6%

Phoenix, AZ 62,061 438 0.7%

Detroit, MI 41,980 384 0.9%

Atlanta, GA 93,713 899 1.0%

Tampa-St Petersburg, FL 44,297 471 1.1%

San Diego, CA 59,162 734 1.2%

St Louis, MO-IL 38,007 538 1.4%

Chicago, IL 109,180 1,671 1.5%

Dallas, TX 78,384 1,299 1.7%

Philadelphia, PA-NJ 45,524 778 1.7%

Orlando, FL 118,462 2,358 2.0%

Boston, MA 51,086 1,043 2.0%

New Orleans, LA 37,470 866 2.3%

Anaheim-Santa Ana, CA 54,186 1,287 2.4%

Los Angeles-Long Beach, CA 97,702 2,323 2.4%

Washington, DC-MD-VA 105,663 2,965 2.8%

Nashville, TN 37,620 1,127 3.0%

Houston, TX 75,109 2,361 3.1%

Miami-Hialeah, FL 48,817 1,706 3.5%

Seattle, WA 40,734 1,914 4.7%

Denver, CO 41,496 2,193 5.3%

New York, NY 109,852 12,201 11.1%

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2014 / 2015 Forecast

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Total United States Chain Scale Key Performance Indicator Outlook 2014F by Chain Scale

2014 Year End Outlook

Chain Scale Occupancy

(% chg) ADR

(% chg) RevPAR (%chg)

Luxury 1.6% 4.8% 6.5%

Upper Upscale 0.1% 4.4% 4.5%

Upscale 2.2% 4.2% 6.6%

Upper Midscale 0.5% 3.2% 3.7%

Midscale 0.9% 3.1% 4.1%

Economy 1.7% 3.3% 5.1%

Independent 0.6% 4.5% 5.1%

Total United States 1.1% 4.2% 5.3%

*as of January 24th, 2014

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Total United States Chain Scale Key Performance Indicator Outlook 2015F by Chain Scale

2015 Year End Outlook

Chain Scale Occupancy

(% chg) ADR

(% chg) RevPAR (%chg)

Luxury 0.8% 4.8% 6.0%

Upper Upscale 0.2% 4.4% 4.6%

Upscale 0.5% 4.2% 5.1%

Upper Midscale -0.4% 3.2% 2.1%

Midscale 0.2% 3.1% 3.5%

Economy 2.6% 3.3% 6.2%

Independent -0.1% 4.5% 4.3%

Total United States 0.5% 4.2% 4.7%

*as of January 24th, 2014

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