[WEBINAR] How To Find Relief In A Sellers Market

Our Panelist

Lindsay Culbreath, CMHS, CHIA Senior Director of Business Development & Marketing STR

Latest STR data,

trends and forecast

Accessing destination specific market conditions with your CVB

Managing expectations and improving negotiations

Our webinar roadmap

Understanding Market Conditions of the

U.S. Hotel Industry

Lindsay Culbreath Senior Director, Business Development & Marketing

[email protected]

Lindsay_STR

© 2016 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.

© 2016 STR. All Rights Reserved.

In Review

Total U.S. Performance

Group vs. Transient

Pipeline & Forecasts

OCC 65.6% ▴1.7% RECORD

Metric No. Status Remarks

ROOM REV $142B ▴7.4% RECORD

OCC ROOMS 1.2B ▴2.9% RECORD

AVAIL ROOMS 1.8B ▴1.1% RECORD

ADR $120 ▴4.4% RECORD

REVPAR $79 ▴6.3% RECORD

U.S. Hotels YE 2015



Supply Growth Now Back Over 1%. Demand Growth Slows.

-0.8

-4.7

-7.1

7.7

2.6

-8

-4

0

4

8

1990 1993 1996 1999 2002 2005 2008 2011 2014

Supply % Change

Demand % Change

1.2

2.9 4.0

Total U.S. – Supply & Demand % Change 12 MMA, January 1990 to January 2016


2 Million More Rooms Available Per Month

1.1 1.1

1.4 1.5 1.4

1.6 1.7

1.6 1.8

1.9 2.0

2.2

January February March April May June July August September October November December

U.S. Supply Change (millions of room nights) 2015 by Month


ADR Growth Steady. Occ Growth Decelerating Rapidly.

-3.4

-6.7

-9.7

1.4

6.8 7.5

4.3

-10

-5

0

5

1990 1993 1996 1999 2002 2005 2008 2011 2014

Occ % Change

ADR % Change

Total U.S. – ADR & Occ % Change 12 MMA, January 1990 to January 2016

RevPAR Growth: It’s Going To Be OK (but Not Great)

-25

-20

-15

-10

-5

0

5

10

15

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

RevPAR % Change January 1990 to January 2016

56 Months 71 Months 80 Months 31 Mo

Scales RevPAR Composition: ADR Driven

0.4 0.6 0.6

2.1 1.6 1.6

3.7 3.9

4.8

4.3

4.2 3.9

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

ADR % Change

Occupancy % Change

4.5

5.4

6.4

5.8 5.5

RevPAR % Change by Contribution of Occ / ADR % Change, by Scale 12 MMA January 2016

4.1


+9.4%

Anaheim, CA

Top 5 / Bottom 2 – RevPAR Growth Markets Full Year 2015

Phoenix, AZ Dallas, TX

Houston, TX

Tampa, FL

Nashville, TN

New York, NY

+12.8%

+10.0%

-3.3%

+11.1%

+13.8%

-1.7%

4 Markets with Double Digit RevPAR Growth

Transient ADR Growth Subsides Despite High Occupancies

0%

1%

2%

3%

4%

5%

6%

2012 2013 2014 2015 2016

Demand % Change ADR % Change

5.9%

2.5%

Transient Demand and ADR % Change 12 MMA, January 2012 – January 2016 NOTE: Data is for upper tier hotels only (Luxury & Upper Upscale classes)

5.4%

3.7%

Group Demand Growth Slows Rapidly

-2%

-1%

1%

2%

3%

4%

5%

6%

2012 2013 2014 2015 2016

Demand % Change

ADR % Change

3.8%

1.9%

Group Demand and ADR % Change 12 MMA, January 2012 – January 2016 NOTE: Data is for upper tier hotels only (Luxury & Upper Upscale classes)


13.5

9.5 9.2 8.5 8.1 8.1 7.4 6.5 6.4 6.2 5.9

5.2 4.7 4.4 4.3 3.7 3.5 2.9 1.3 1.3 0.9

-0.1 -0.3

-5.5 -5.5

Group RevPAR % Change, Top 25 Markets Full Year 2015

Group RevPAR Declines in 4 Markets


Meeting Requirements Considerations Rated “Very Important” in Site Selection

Meeting planners are more demanding than ever in site selection

50% 60% 70% 80% 90% 100%

Clean/attractive city

Attractive conference hotels

# of hotel rooms available

Convenient airline service

Easy for delegates to get to

Food and lodging costs

Travel costs to destination

Good value for the money

2015

2013

COSTS

CONVENIENCE

CLEAN/ ATTRACTIVE


What Impact do Events Have on your Destination?

Source: STR Compression Analysis


Phase February 2016 February 2015 Difference % Change

In Construction 150,406 128,874 21,532 16.7

Final Planning 185,607 152,216 29,391 18.8

Planning 161,396 150,428 10,968 7.3

Under Contract Pipeline

497,409 435,518 61,891 14.2

U.S. Pipeline, by Phase (Rooms) February 2016 vs 2015

Construction Today Will Impact 2016 / 2017


7.7

12.9

50.9 50.3

5.7

1.5

20.5

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated

U.S. Pipeline – Rooms Under Construction, ‘000s Rooms, by Scale January 2016

68%

Limited Service Construction Has Been Strong For 2 Years


Construction In Top 26 Markets: 20 With 2%+ Of Supply

U.S. Pipeline – Top 26 Markets, U/C Rooms as % of Existing Supply January 2016

Market Rooms U/C % Of Existing

New York, NY 14,544 12.30%

Miami/Hialeah, FL 3,896 7.50%

Houston, TX 5,553 6.90% Seattle, WA 2,872 6.70%

Denver, CO 2,756 6.30%

Minneapolis/St Paul, MN-WI 2,487 6.30%

Nashville, TN 2,163 5.60%

Philadelphia, PA-NJ 2,443 5.30% Dallas, TX 4,278 5.30%

Los Angeles/Long Beach, CA 4,630 4.70%

Anaheim/Santa Ana, CA 2,478 4.40%

Boston, MA 1,980 3.80%

San Diego, CA 1,951 3.20%

Washington, DC-MD-VA 3,339 3.10%

Chicago, IL 3,302 3.00%

Detroit, MI 1,264 3.00%

Tampa/St Petersburg, FL 1,343 3.00%

Phoenix, AZ 1,536 2.50%

Las Vegas, NV 3,905 2.30%

Orlando, FL 2,454 2.00%


Total U.S. – Key Performance Indicator Outlook (% Change vs. Prior Year) 2016 - 2017

Outlook

2016 Forecast

2017 Forecast

Supply 1.7% 1.9%

Demand 2.3% 2.1%

Occupancy 0.6% 0.2%

ADR 4.4% 4.3%

RevPAR 5.0% 4.5%

Robust RevPAR Growth Still Ahead


Take-Aways

Record levels of supply & more on the way

Growth rates are slowing

Cautiously optimistic

Stay informed!


Establish Your Research Foundation

1 • Contact STR’s Business Development Team:

[email protected] or +1 (615) 824 8664 ext 3504

2

• Determine questions you’re trying to answer

• Rate negotiations

• New supply in the market

3

• We’ll help match STR’s products to meet your needs

• Trends, Market Pipeline, Forecasts, etc.

mailto:[email protected]

Thank You!

© 2016 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.

Lindsay Culbreath

Senior Director, Business Development & Marketing

[email protected]

Lindsay_STR

www.linkedin.com/in/LindsayCulbreath

7 Types of Consultative Advice

to Seek From Your CVB

1) Perspective

2) Expertise and Specialized Knowledge

3) Best Practices and Proven Methodology

4) Strategic Mindset

5) Analytical Horsepower and Data Mining

6) Advocacy

7) Cost Savings and Extension of Staff

ANALYTICAL HORSEPOWER & DATA MINING

“In today’s market environment meeting planners must understand the economics of supply and demand in any market where they are trying to book a meeting. In YE 2015 city wide occupancies in the top 25 markets in the U.S. ranged from a low of 57% to a high of over 85%. The local destination marketing organization can be the best source for planner who wants to understand the general seasonality and/or day of the week demand trends in any market. Knowing when there are large patterns of availability – or not - for hotel rooms, can help the planner better manage and negotiate their terms and costs associated with a meeting.”

Robert A. Gilbert, CHME, CHBA President & CEO Hospitality Sales & Marketing Association International

Most Desirable Arrival and Departure Patterns

Major Local

Events

Cancellations and Special Offers

Seasonality: Peak, Shoulder and Need

Transient Demand

City-wides

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