Upload
john-summers
View
214
Download
0
Embed Size (px)
Citation preview
Resort ConferenceMarch 21st, 2006
Jan D. Freitag, VP
SMITH TRAVEL RESEARCH
Agenda
• Total US Overview
• Resort Locations
• Destination Resorts
• Condo Hotels
• Total US Projections
Total United StatesEstimated Revenue and ProfitabilityYears 1999 – 2005P
Life is good !
102.9
112.1
103.5 102.6105.3
123
22.1 22.516.2 14.2 12.8
16.720.8
113.7
39.2%
40.9%
37.1%
35.7%35%
36.6%37.5%
0
20
40
60
80
100
120
140
1999 2000 2001 2002 2003 2004 2005P25%
30%
35%
40%
45%
50%Revenue Income GOP
U.S. Lodging Industry - Key StatisticsLatest 12 Months - January 2006
% Change• Hotels 47,735 0.6%• Rooms 4.4mm 0.3%• Occupancy 63.3% 2.9%• A.D.R. $91.28 5.5%• RevPar $57.76 8.6%• Room Revenue $94B 9.0%
-6
-4
-2
0
2
4
6
1989 1991 1993 1995 1997 1999 2001 2003 2005
Supply % Change
Demand % Change
Total United StatesRoom Supply/Demand Percent ChangeTwelve Month Moving Average – 1989 to January 2006
Cyclicality Clearly Visible – Recent S/D Imbalance Spells Opportunity
0.3%
3.3%
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
1989 1991 1993 1995 1997 1999 2001 2003 2005
Occ % Chg
ADR % Chg
Total United StatesOccupancy/ADR Percent ChangeTwelve Month Moving Average – 1989 to January 2006
Divergence
Divergence?
If History Repeats Itself, Strong ADR Gains are Here to Stay
50
60
70
80
90
100
1989 1991 1993 1995 1997 1999 2001 2003 2005
Occupancy ADR
Total United StatesOccupancy Percent, Average Daily Rate, RevPARTwelve Month Moving Average – 1989 to January 2006
$86.36
$91.28
64.9%63.3%
Robust OCC and ADR Gains post 9/11
STR Chain ScalesSelected chains from each segment
• Luxury – Four Seasons, Ritz Carlton, Fairmont, W Hotels
• Upper Upscale – Doubletree, Hilton, Hyatt, Sheraton
• Upscale – Hilton Garden Inn, Courtyard, Crowne Plaza, Radisson
• Mid with F&B – Holiday Inn, Ramada, Best Western, Quality Inn
• Mid no F&B – Comfort Inn, HI Express, Country Inns & Suites
• Economy – Motel 6, Days Inn, ESA, Travelodge, Ramada Limited
-0.1
1.1 1.3
-2.6
1.2
0.0
3.8 3.6 3.7
0.6
5.0
3.6
-5
0
5
10
Luxury UpperUpscale
Upscale Mid w F&B Mid wo F&B Economy
SupplyDemand
Chain ScalesSupply/Demand Percent ChangeTwelve Months Ended January 2006
Business Traveler Drives Demand for Big Boxes
4.03.6
7.37.0
7.7 7.8
4.03.6
2.5 3.32.5
5.2
0
5
10
Luxury UpperUpscale
Upscale Mid w F&B Mid wo F&B Economy
OccupancyADR
Chain ScalesOccupancy/ADR Percent Change Twelve Months Ended January 2006
Above Inflation Rate Growth Across all Chain Scales
11.3 10.911.7
5.9
13.1
7.88.79.7
11.810.2
11.4
7.8
0
10
20
Luxury UpperUpscale
Upscale Mid w F&B Mid wo F&B Economy
RevPARRoom Revenue
Chain ScalesRevPAR/Room Revenue Percent Change Twelve Months Ended January 2006
Life is Good!
Agenda
• Total US Overview
• Resort Locations
• Destination Resorts
• Condo Hotels
• Total US Projections
Resort Locations Key Statistics12 Month Moving Average January 2006
% Change• Hotels 3,890 -2.5%• Room Nights 214.6 m -1.8%• Demand 143.3 m -0.8%• Occupancy 66.7% 1.1%• ADR $127.06 6.0%• RevPAR $85.11 7.1%• Room Rev $18.3 b 5.2%
-10
-8
-6
-4
-2
0
2
4
6
8
1989 1991 1993 1995 1997 1999 2001 2003 2005
Supply % Change
Demand % Change
Resort LocationsRoom Supply/Demand Percent ChangeTwelve Month Moving Average – 1989 to January 2006
Supply Increase Used to be Somewhat Constant – Until 9/11
-0.8%
-1.8%
-10
-8
-6
-4
-2
0
2
4
6
8
1989 1991 1993 1995 1997 1999 2001 2003 2005
Demand % Change
Resort LocationsRoom Demand Percent Change PeaksTwelve Month Moving Average – 1989 to January 2006
Demand Peaks Every 48 months – Or Does it?
48 months 48 months 42 months
-10
-8
-6
-4
-2
0
2
4
6
8
1989 1991 1993 1995 1997 1999 2001 2003 2005
Occ % Chg
ADR % Chg
Resort LocationsOccupancy/ADR Percent ChangeTwelve Month Moving Average – 1989 to January 2006
Despite Decreasing OCC Growth, ADR Growth Should be Here to Stay
50
60
70
80
90
100
110
120
130
1989 1991 1993 1995 1997 1999 2001 2003 2005
OccupancyADR
Resort LocationsOccupancy Percent, Average Daily RateTwelve Month Moving Average – 1989 to January 2006
July 1997: 69.1%
OCC & ADR Rebound after 9/11 – but OCC still has a way to go
July 2001: $115
Jan 2006: $127
Jan 2006: 66.7%
ResortsDay of Week Analysis – Occupancy 2003 - 2005
54.2%
57.2%
60.2%
62.0%
63.6%
72.4%
76.0%
57.7%
63.9%65.4%
67.1%
61.1%
64.9%
66.6%67.8%
75.2%
78.3%
60.7%
78.4%
75.1%
57.5%
50%
55%
60%
65%
70%
75%
80%
Sun Mon Tue Wed Thu Fri Sat
200320042005
Nice Increases Midweek - but Have Weekends Peaked?
ResortsDay of Week Analysis – ADR 2003 - 2005
$113.20
$111.22 $111.07$112.37 $112.41
$113.92
$115.71
$118.63
$115.50 $115.95
$117.87
$126.76
$124.11 $124.02$125.68
$128.77
$131.71
$115.99
$122.27$120.85
$123.63
$100
$105
$110
$115
$120
$125
$130
$135
Sun Mon Tue Wed Thu Fri Sat
200320042005
~$8 Rate Growth Across the Board – a Good Sign for 2006
ResortsGroup vs. Transient ADR 2003 - 2005
$166.95$172.02$168.48
$172.92
$201.73
$183.02
$50
$100
$150
$200
Group Transient
2003 2004 2005
Group Rate Growth Lags Transient Rate Growth
ResortsDay of Week ADR - Group 2003 - 2005
$170.38
$166.79
$165.50$164.86
$166.54 $166.72
$168.67
$172.14
$166.81$166.17
$168.44
$177.00
$173.17
$171.77
$172.74
$171.56
$173.48
$168.49
$170.50
$167.69
$171.87
$160
$162
$164
$166
$168
$170
$172
$174
$176
$178
Sun Mon Tue Wed Thu Fri Sat
2003 2004 2005
2005 vs 2004: Moderate Daily Rate Growth (~3%) For Groups
ResortsDay of Week ADR – Transient2003 - 2005
$173.38
$170.34 $169.63
$172.37 $171.98 $172.54 $173.40
$183.55
$178.87$180.01
$184.33
$201.10
$197.95 $197.74
$202.25
$205.39$207.52
$179.73
$185.72$187.03
$197.50
$160
$170
$180
$190
$200
$210
Sun Mon Tue Wed Thu Fri Sat
2003 2004 2005
2005 vs 2004: Healthy Rate Increases Across All Days (~10%)
Agenda
• Total US Overview
• Resort Locations
• Destination Resorts
• Condo Hotels
• Total US Projections
Destination Resort Key Statistics12 Month Moving Average January 2006
% Change• Hotels 317 1.0 %• Room Nights 57.7m - 0.5 %• Demand 38.8 m 1.2 %• Occupancy 67.3% 1.7 %• ADR $182.98 6.3 %• RevPAR $123.14 8.1 %• Room Rev $7.1 b 7.6 %
0.7% of US Hotel Supply generates 7.6 % of US Rooms Revenue
-10
-8
-6
-4
-2
0
2
4
6
8
10
1989 1991 1993 1995 1997 1999 2001 2003 2005
Supply % Change
Demand % Change
Destination ResortsRoom Supply/Demand Percent ChangeTwelve Month Moving Average – 1989 to January 2006
Segment Always Attracts New Supply – Except in the Most Recent Past
1.2%
-0.5%
-12-10
-8-6-4-202468
10
1989 1991 1993 1995 1997 1999 2001 2003 2005
Occ % Chg
ADR % Chg
Destination ResortsOccupancy/ADR Percent ChangeTwelve Month Moving Average – 1989 to January 2006
Above 6% Rate Growth Lasts Not Forever… But for Now
0
25
50
75
100
125
150
175
200
1989 1991 1993 1995 1997 1999 2001 2003 2005
OccupancyADR
Destination ResortsOccupancy Percent, Average Daily RateTwelve Month Moving Average – 1989 to January 2006
Still Room For Improvement Post 9/11 in Both Measures
May 1997: 70.6%
July 2001: $171
Jan 2006: $182
Jan 2006: 67.3%
50
55
60
65
70
75
80
January February M arch April M ay June July August Septem ber October Novem ber Decem ber
20002005
Destination ResortsMonthly Occupancy2000 vs. 2005
In the Off Season, Year 2000 Still Is the Benchmark To Beat
76.8%75.8%
130
140
150
160
170
180
January February M arch April M ay June July August Septem ber October Novem ber Decem ber
20002005
Destination ResortsMonthly ADR2000 vs. 2005
December Rate Differential Still $6
-$6
+$14
Destination ResortsDay of Week Analysis – Occupancy 2003 - 2005
54.7%
59.1%
62.4%
64.2%65.5%
71.0%
74.3%
66.7%67.9%
69.0%
58.8%
64.0%
68.2%69.5%
70.3%
74.3%
77.0%
58.9%
63.3%
77.1%
74.1%
50%
55%
60%
65%
70%
75%
80%
Sun Mon Tue Wed Thu Fri Sat
200320042005
Strong “Long Weekends” (Thu – Sat) But Have Fr/Sat Reached Their Peak?
Destination ResortsDay of Week Analysis – ADR 2003 - 2005
$145.74
$142.07$141.13
$142.44$143.62 $143.45
$144.43
$148.91
$143.75 $144.08
$147.31
$157.19
$153.11$152.18
$155.05
$156.61
$145.04
$148.75$148.19
$158.63
$151.83
$130
$135
$140
$145
$150
$155
$160
Sun Mon Tue Wed Thu Fri Sat
200320042005
Second Part of the Cycle: Rate Increase ‘04/’03: 2% - Rate Increase ‘05/’04: 6%
Agenda
• Total US Overview
• Resort Locations
• Destination Resorts
• Condo Hotels
• Total US Projections
Definitions
• Condo Hotel Rooms:Rooms placed in Rental Pool
• Residences:Rooms not placed in Rental Pool
Total U.S.Summary of Condotel Pipeline – March 2006
Source: STR Condotel Pipeline, part of the STR / TWR / Dodge Construction Pipeline
229 Projects with a total of 98,142 reported* rooms
Rooms are broken out as follows ( % of total):
• Hotel Rooms: 34,166 35%
• Condo Hotel Rooms: 48,678 50%
Total Affecting Nightly Room Supply: 82,844 85%
• Non-rental Residences: 13,938 14%
• Timeshare Rooms: 1,360 1%
* Some projects have not yet reported room counts
Total U.S.Top 10 Condotel MSAsMarch 2006
28,288
11,576
10,084
6,880
3,712 3,699 3,215 3,073 2,911 2,672
0
5,000
10,000
15,000
20,000
25,000
30,000
Las Vegas Miami - FortLauderdale
Non-MSA Orlando NYC / NJ Chicago Tampa / ST.Pete
Myrtle Beach Boston San Diego
59.2
61.363.1
52.7
56.0
59.4
63.4
66.9 67.6
40
45
50
55
60
65
70
2003 2004 2005
Total US
CondoHotels
Destination Resorts
Annual Occupancy 2003 - 2005Total US vs. Condo Hotels vs. Destination Resorts
%
$82.86 $86.24$90.83
$168.44
$179.26
$194.18
$148.77 $151.85$158.68
40
60
80
100
120
140
160
180
200
220
2003 2004 2005
Total US
CondoHotels
Destination Resorts
Annual ADR 2003 - 2005Total US vs. Condo Hotels vs. Destination Resorts
$
Condotel:Data Reporting Topics• Reporting Availability
Static vs. Fluctuating Rooms Available
• Reporting Rooms SoldIssue: Owner Occupied, Non-Revenue Generating Rooms
• Reporting Rooms RevenueThe Rule: No Restatements after 120 days
• Comp Set IssuesChoosing a Condotel in your Comp Set will likely do more harm than good
Agenda
• Total US Overview
• Resort Locations
• Destination Resorts
• Condo Hotels
• Total US Projections
Lodging Industry Issues
• Supply Growth Remains Benign – Construction Costs, Condo Conversions
• Higher Operating Costs – Insurance, Labor, Amenities, Energy
• Solid Demand Growth – Degrees of Good, Some Not So Good
• Changing Demand – Experience Travel, Baby Boomers
• Occupancy Growth Slows – Varies Widely by Market
• Aggressive Pricing – Could Double CPI, Control of Internet Pricing
• Transportation Problems – Troubled Airlines, Gasoline, Infrastructure
• Higher Industry Profits – More Difficult for each Property
• Global Issues – Terrorism, Bird Flu, Currency Fluctuations
• Outlook – Great ‘till ‘08?
U.S. Economic OutlookBlue Chip Economic Indicators – March 2006
2005A 2006F 2007F
Real GDP +3.6% +3.4% +3.0%
CPI (= Inflation) +3.4% +2.9% +2.4%
Corporate Profits + 17.1% +9.5% +4.6%
Disp Personal Income +1.5% +3.5% +3.2%
Unemployment Rate 5.1% 4.8% 4.7%
1.6
3.1
0.4
1.21.1
0.6
4.2
3.3
0.3
1.4
0
1
2
3
4
5
2002 2003 2004 2005 2006P
Supply % Chg
Demand % Chg
Total United StatesSupply/Demand Percent Change2002 – 2006P
2.9
3.6
0.3
1.9
-1.2
-2
-1
0
1
2
3
4
2002 2003 2004 2005 2006P
Total United StatesOccupancy Percent Change2002 – 2006P
59 59.2
63.1
61.3
64.3
55
60
65
70
2002 2003 2004 2005 2006P
Total United StatesOccupancy Percent2002 – 2006P
4.1
5.3
-1.5
6.0
0.1
-2.0
0.0
2.0
4.0
6.0
8.0
2002 2003 2004 2005 2006P
Total United StatesADR Percent Change2002 – 2006P
Total United StatesReal Room Rates – (Base Year = 2000)
Year End 2000 - 2005
$81.73
$78.63
$80.43$79.28
$85.31
$77.62
75
80
85
90
2000 2001 2002 2003 2004 2005
Total United StatesNominal Room Rates2000 – 2006P
85.2283.99
86.24
90.83
96.28
101.75
82.8682.75
75
80
85
90
95
100
105
2000 2001 2002 2003 2004 2005 2006P
If Yr. 2000 Rate Had Grown at 3% over 6 years:
8.48.07.8
0.4
-2.7
-10.0
-5.0
0.0
5.0
10.0
2002 2003 2004 2005 2006P
Total United StatesRevPAR Percent Change2002 – 2006P