meet the money 2011® jan freitag, str: us lodging industry - what lies ahead?

8/6/2019 Meet the Money 2011 Jan Freitag, STR: US Lodging Industry - What Lies Ahead?

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US Lodging Industry

What Lies Ahead?

Jan D. Freitag

Vice President

STR


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Agenda

Total US Overview

Group vs. Transient

Major MarketsChain Scales

Forecast


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www.hotelnewsnow.comClick on Industry Presentations


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2011 So far, so blah


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Total US - Key StatisticsQ1 2011

% Change Hotels 52k

Room Supply 432 mm 1.0%

Room Demand 237 mm 6.7%

Occupancy 54.9% 5.7%

A.D.R. $99 3.1%

RevPAR $55 9.0%

Room Revenue $23.6 bn 10.0%


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-10

-5

0

5

10

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Demand ADR7.9%

Demand Leads ADR, But Swings Get More Extreme

-6.9%

-4.7%

-0.9%

-4.6%

-0.2%

-8.7%

1.6%

*Total US, ADR & Demand % Change, 12 MMA 1/89 3/11


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$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

1.5

2.0

2.5

3.0

3.5

4.0

1/8/06 1/1/07 12/31/07 12/29/08 12/28/09 12/27/10

Room Demand (left scale)

$ / Gallon (right scale)

Gas Price vs. Room Demand: This Means What?

* Weekly US Room Demand vs. Average Gas Price $ / Gallon (Source: www.eia.gov)

Millions


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Gas Price vs. Room Demand: Geek Speak

We note relatively low correlation coefficients andpredictive values (R2) across the time period tested.

In fact, the correlation coefficient between total U.S.lodging demand and WTI and Brent prices is 0.37(R2 0.14) and 0.38 (R2 0.14), respectively.

Joe Greff, J.P. Morgan, 3/10/11


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Group vs. TransientPerformance


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*US High End Hotels, Monthly Transient Demand: Jan. 2007 -March 2011

10

12

14

16

18

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

2007 2008 2009 2010 2011

Millions

YTD 11 Transient Room Demand Outpaced Prior Years


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*US High End Hotels, Monthly Transient ADR: Jan. 2007 -March 2011

$140

$150

$160

$170

$180

$190


2007 2008 2009 2010 2011

YTD 11 Transient ADR Well Below 2007/08


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*US High End Hotels, Monthly Group Demand: Jan. 2007 - March 2011

4

6

8

10

12


Millions

2007 2008 2009 2010 2011

YTD 11 Group Room Demand Picking Up!


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*US High End Hotels, Monthly Group ADR: Jan. 2007 -March 2011

$130

$140

$150

$160

$170


2007 2008 2009 2010 2011

Negotiated Rates Will Take All Year To Burn Off


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Major Markets


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-12.0

-8.0

-4.0

0.0

4.0

8.0

2000 2002 2004 2006 2008 2010

BOS/NYC/Miami/LA/SF

Top 25 less BOS/NYC/Miami/LA/SF

All Other Markets

Demand Change: Pain For All. Recovery For All.

7.6%

8.7%

7.8

* Select Geographies, Room Demand % Change, 12 MMA, 1/00 3/11


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-16.0

-12.0

-8.0

-4.0

0.0

4.0

8.0

12.0

2000 2002 2004 2006 2008 2010

BOS/NYC/Miami/LA/SF

Top 25 less BOS/NYC/Miami/LA/SF

All Other Markets

ADR: Coastal Markets Get Hit Harder, Recover Faster.

6.1%

0.81.0%

*Select Geographies, ADR % Change, 12 MMA, 1/00 3/11


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RevPAR Recovery Part 2: East Coast Markets Lag

1.9

2.8

3.53.5

7.4

8.3

9.0

9.8

10.110.4

10.8

11.7

11.8

12.6

14.9

16.0

19.1

19.8

22.1

NYC

Miami

DCAtlanta

Boston

All Other Markets

Total US

Top 25 MarketsPhoenix

New Orleans

Denver

San Diego

Chicago

Orlando

LA

DetroitOahu

Dallas

SF

*Major U.S. Markets RevPAR % Change, Q1 11


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Chain Scales


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Luxury Four Seasons, Ritz Carlton, Fairmont, InterContinental

Upper Upscale Hyatt, Embassy Suites, Hilton, Marriott

Upscale Hyatt Place, Hilton Garden Inn, Courtyard, Hotel Indigo

Upper Midscale Best Western PLUS/Premier, Hampton Inn

Midscale Best Western, Country Inn & Suites, La Quinta Inn

Economy Americas Best Inn, Econolodge, Red Roof, Days Inn

2011 STR Chain ScalesSelected chains from each segment


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Very Sluggish ADR Recovery

6.4

3.3

5.3

6.15.6 5.4

6.26.1

4.0

3.1

2.4

-0.3

0.8

2.6

Luxury UpperUpscale

Upscale UpperMidscale

Midscale Economy Indep.

Occupancy ADR

*US Chain Scales OCC & ADR % Change: YTD March 2011


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$90

$100

$110

$120

$130

2005 2006 2007 2008 2009 2010 2011

14 Months

* Luxury ADR Premium Over Upper Upscale ADR, 12 MMA, 1/05 3/11

Luxury ADR Premium Increase On Pace

$128

$103

14 Mo

$95

$104

$96


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Forecast- What Lies Ahead?

T t l U it d St t


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Total United StatesTop 15 Brands All Active PhasesMarch 2011

5,294

5,502

6,120

6,828

8,322

8,578

8,611

9,612

9,831

10,984

11,455

12,589

14,08116,083

23,719

Home2 Suites

TownPlace Suites

Hampton Inn

Comfort Suites

Staybridge Suites

Springhill Suites

Candlewood Suites

Hilton Garden Inn

La Quinta Inn &

Fairfield Inn

Residence Inn

Courtyard

Holiday Inn

Hampton Inn Suites

Holiday Inn Express


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2011: The Year of The Hotel Flasher


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Total US Summer* Outlook 2011

Actual % Change

Supply 0.8

Demand 2.5

Occupancy 66.7% 1.7

ADR $103 4.1

RevPAR $69 6.0

*Summer = June, July, August


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Total US Outlook (% Change)

2010

(actual) 2011 2012

Supply 1.9 0.7 0.5

Demand 7.6 2.5 2.2

Occupancy 5.6 1.8 1.7

ADR -0.1 4.2 6.8

RevPAR 5.5 6.1 8.5


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RevPAR Chain Scale Outlook (% Change)

Chain Scale

2010

(actual)2011 2012

Luxury 10.1 8.2 10.7

Upper Upscale 5.7 7.9 10.6

Upscale 5.7 7.6 9.2

Upper Midscale 3.3 6.3 9.4

Midscale 4.3 4.3 7.1

Economy 1.8 4.4 6.9


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www.hotelnewsnow.comClick on Industry Presentations

meet the money 2011® jan freitag, str: us lodging industry - what lies ahead?

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