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Brian D. Stevens Chair
MPI IBOD
April 20th, 2017
Brian D. Stevens
Brian
BDS
350 Associates
11,000 bookings
3.8 million room nights
$785 million
In 2016:
1985
1997-2001
2014-present
INDUSTRY UPDATE AND FORECAST LATEST PREDICTIONS FROM MPI MEMBERS NEW AND UPCOMING @ MPI OPEN DISCUSSION
1 • My prediction: an overdue economic decline in the next 18 months.
• Why this matters: History can help you anticipate the future and plan
accordingly.
Why are we here?
1 1) Smith Travel Research
2) ConferenceDirect Data
3) Meetings Mean Business
4) MPI Meetings Outlook
Research Sources
The global economy had a weak 2016.
2.6% 2.5%
2.8% 2.7%
2.2%
2012 2013 2014 2015 2016*
Global
Year-Over-Year Change
(4%) (2%) 0% 2% 4% 6% 8%
Brazil
Italy
Japan
France
Canada
US
Germany
Eurozone
Mexico
UK
Australia
Spain
China
India
Key Countries
Worse
Better
Real GDP Change
Oxford Economics
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
15%
20%
4Q
05
2Q
06
4Q
06
2Q
07
4Q
07
2Q
08
4Q
08
2Q
09
4Q
09
2Q
10
4Q
10
2Q
11
4Q
11
2Q
12
4Q
12
2Q
13
4Q
13
2Q
14
4Q
14
2Q
15
4Q
15
2Q
16
4Q
16
Exports Constant Prices and Exchange Rate—USD—Year-Over-Year Change
Avg. 6.9% Avg. 2.6%
World trade remains weak.
Oxford Economics
3.5%
4.3%
4.8%
2.7%
3.6%
2012 2013 2014 2015 2016*
Global
Corporate Profits Year-Over-Year Change—Global Based on 43 Country Aggregate—Constant USD
(5%) 0% 5% 10%
Japan
Canada
US
Australia
France
Italy
Eurozone
UK
Spain
Brazil
Germany
Mexico
China
Key Countries
Worse
Better
Oxford Economics; IHG PS&P
Corporate profits remained positive.
2.2% 2.2%
2.5% 2.5% 2.6%
2012 2013 2014 2015 2016*
Global
Consumer Spending Year-Over-Year Change—Constant Prices & Exchange Rate
(6%) (4%) (2%) 0% 2% 4% 6% 8% 10%
Brazil
Japan
Italy
Germany
Eurozone
France
Canada
Australia
US
UK
Mexico
Spain
India
China
Key Countries
Worse Better
Oxford Economics
Consumers are also spending more.
3.1%
2.8%
3.8%
2.8%
2.3%
2012 2013 2014 2015 2016
Global
Industry Demand Year-Over-Year Change
(6%) (4%) (2%) 0% 2% 4% 6%
Brazil
France
Italy
Japan
Eurozone
Germany
Canada
US
UK
Mexico
World
Australia
Spain
China
India
Key Countries
Worse Better
STR, Inc.
Lodging demand grew, but at the slowest pace in 7 years.
80
85
90
95
100
105
110
115
120
125
130
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
Global United States
Industry Demand Index Seasonally-Adjusted—Prior Peak Index
STR, Inc.
Even with the slower growth, lodging demand remained at record highs.
50%
52%
54%
56%
58%
60%
62%
64%
66%
68%
1990 1991 1993 1994 1996 1997 1999 2000 2002 2003 2005 2006 2008 2009 2011 2012 2014 2015
US Industry Occupancy 12-Month Moving Average—Absolute Level
STR, Inc.
US occupancy remained at an all-time high.
STR, Inc.
Despite a downward trend, RevPAR has seen a resurgence over the past five months.
Industry RevPAR Trend Year-Over-Year Change
(2%)
0%
2%
4%
6%
8%
10% J-
15
F-1
5
M-1
5
A-1
5
M-1
5
J-1
5
J-1
5
A-1
5
S-1
5
O-1
5
N-1
5
D-1
5
J-1
6
F-1
6
M-1
6
A-1
6
M-1
6
J-1
6
J-1
6
A-1
6
S-1
6
O-1
6
N-1
6
D-1
6
J-1
7
F-1
7
M-1
7
OCC ADR RPR
STR, Inc.
Lodging demand improved significantly in Q1 2017.
1.7% 1.5%
2.0%
3.1%
4.6%
1Q16 2Q16 3Q16 4Q16 1Q17F
Global
Lodging Demand Change Year-Over-Year Change
(5%) 0% 5% 10%
Brazil
Japan
US
Spain
Canada
Australia
Germany
UK
Mexico
Italy
India
France
Eurozone
China
Key Countries 1Q 2017
Worse
Better
STR, Inc.
Q1 occupancy in the top 25 US markets remained below its 2015 all-time high.
66.8%
68.9%
70.7% 70.3% 70.3%
1Q13 1Q14 1Q15 1Q16 1Q17F
Top 25 US Markets
Industry Occupancy—Top 25 Markets Year-Over-Year Change
50% 55% 60% 65% 70% 75% 80% 85%
Chicago Minn/St Paul Philadelphia
Boston Detroit
Houston Denver
Wash DC Nashville
Dallas Atlanta Seattle
New Orleans San Diego New York San Fran Phoenix
Los Angeles Tampa/St …
Orlando Miami Oahu
Key Markets
Worse
Better
STR, Inc.
Rates are increasing in most of the top US markets, but the overall growth rate remained below Q1 2016.
3.2%
2.6% 2.8%
2.0%
2.5%
1Q16 2Q16 3Q16 4Q16 1Q17F
Top 25 US Markets
Industry ADR Change—Top 25 Markets Year-Over-Year Change
(10%) (5%) 0% 5% 10%
Miami New York
Boston Los Angeles
San Fran Chicago
Philadelphia Minn/St Paul New Orleans
Orlando Dallas
Denver Seattle Atlanta Detroit
Nashville Phoenix Houston
Tampa/St Pete Oahu
San Diego Wash DC
Key Markets
Worse Better
STR, Inc.
ADR growth slowed in Transient with Group ADR gains similar to prior years.
3.1% 3.3%
4.0% 3.6% 3.8%
1Q13 1Q14 1Q15 1Q16 1Q17F
Group
Industry ADR Change Luxury & Upper Upscale Only—Year-Over-Year Change
5.9%
5.3% 4.9%
1.6%
2.2%
1Q13 1Q14 1Q15 1Q16 1Q17F
Transient
ConferenceDirect YE 2016
2015 2016 ’16 vs ‘15
Bookings 10,684 11,073 3.6%
Room Nights 3,871,365 3,831,712 -1.0%
ADR $202.43 $204.96 1.2%
ConferenceDirect Q1 2017
Q1 2016 Q1 2017 ’16 vs ‘17
Bookings 2,307 2,473 7.2%
Room Nights 598,959 571,755 4.5%
ADR $202.17 $199.93 1.1%
The
Question
13 Airbnb Markets
United States
• Boston
• Los Angeles
• Miami
• New Orleans
• San Francisco
• Seattle
• Washington, D.C.
International
• Barcelona
• London
• Mexico City
• Paris
• Sydney
• Tokyo
STR, Inc.
Largest Lodging Companies by Rooms – Less Private Rooms
166k
177k
295k
511k
516k
673k
716k
769k
981K
1.1M
Hyatt
Carlson Hospitality Company
Best Western Hotels & Resorts
Choice Hotels International
Accor Company
Wyndham Worldwide
Intercontinental Hotels Group
Hilton Worldwide
Airbnb
Marriott + Starwood
Estimated for Airbnb 7 US markets used as proxy
STR, Inc.
Why MMB?
• We need to be prepared for another recession.
• With a single comment, President Obama created a slight
recession in our industry.
• We must constantly collect and present data to quantitatively
advocate the value of our industry to the U.S. economy
• We need to push against increased taxation on meetings and
travel – we lost the battle of the lunch deduction.
Small Business Survey
Overwhelmingly believe in-person meetings are
important to their business
Q4: How important do you believe in-person meetings are to your business?
Important Not important
85%
15%
47%
very
2% not at all
38%
somewhat
13%
not very
Consider in-person meetings a worthwhile expense
Q6: To what extent do you believe in-person meetings yield a return on investment?
Return on
investment
No return on
investment
77%
23% 31%
great
4% no
46%
moderate
19%
little
Building partnerships
Negotiating and solidifying agreements
Finding and interviewing potential new hires
Networking with colleagues, peers and partners
Engaging with the community
Exploring new business opportunities
Onboarding and training new employees
Training and attending continued education programs
Innovating and developing creative solutions
Keeping up-to-date on the newest industry trends
25%
20%
24%
14%
13%
9%
13%
7%
8%
4%
33%
41%
47%
59%
60%
68%
68%
71%
75%
82%
In-person is better Remote is better
That add value remote meetings cannot
Q13: Do you believe each of the following is better accomplished via in-person, face-to-face meetings or via remote video, online or teleconferencing?
The tech sector embraces face-to-face too!
98%
55%
95%
55%
In-person meetings are important
Plan to increase spending next year
In-person meetings yield a return on
investment
Prioritize in-person meetings during budget
cuts
A note on
The United scandal raises some important concerns for meeting planners.
• Today is different than ever before with smart phones and the ease of virality.
• Consider Delta’s reaction.
• What would you do if you had to forcibly remove someone from a meeting?
Bill O’Reilly ousted from Fox News after nearly two decades.
The OUTLOOK
Industry demand is also anticipated to rise in 2017.
5.6%
4.4%
3.8% 4.0%
2014 2015 2016 2017
Global
Oxford Economics
(1%) 0% 1% 2% 3% 4% 5% 6%
Brazil
Spain
Italy
France
Germany
UK
Canada
Mexico
India
US
Australia
China
Japan
Key Countries
Better
Worse
Room Nights in Hotels Year-Over-Year Change
Oxford Economics
US industry forecasters are predicting slightly lower rate gains in 2017 with occupancy near record highs.
65.4% 65.5% 65.2%
2015 2016 2017
Occupancy Change (pts)
4.5%
3.1% 2.9%
2015 2016 2017
ADR Change
US Industry Occupancy and ADR Forecast Year-Over-Year Change
Consensus Forecast(CBRE; STR & PWC)
INSIGHTS FROM MPI MEMBERS
Fall
2016
Edition
Fall
2016
Edition
Winter
2016
Edition
Fall
2016
Edition
43% say there has been no change in
the selection of destinations with more liberal handgun or
weapons laws.
How Do Liberal Gun Laws Affect Destination Selection?
2% prefer these destinations 37% don’t know/deciding
19% avoid destinations with more
liberal handgun or weapons laws.
2% prefer these destinations 38% don’t know/deciding
How Do Restroom Laws Affect Destination Selection?
31% say there has been no change in the selection of destinations
that prohibit universal restroom usage (U.S.)
30% avoid destinations that prohibit universal restroom usage (U.S.).
Do You Use Social Media for Your Meetings?
Always 19% Mostly 20% Case-by-case 40% Seldom 11% Never 6% What’s that? 3%
Most Important Medium
39.4%
38.8%
12.5%
Strongly Agree
Somewhat Agree
Somewhat Disagree
Disagree Strongly
Pulse Check: Delegates should be banned from using personal devices during meetings and
events.
6.5%
33.5%
28%
32%
The importance of MENTORSHIP
Your future GOALS for MPI and MENTORSHIP
What are your goals for your involvement with MPI in the next six months?
Who is a mentor to you, inside or outside of MPI? (note: not an employer)
Who are you mentoring inside or outside of MPI (note: not an employee)?