Hotel and Economic

Outlook in Europe

Elizabeth Winkle

Managing Director, STR Global

Our coverage as of August 2013

32,486 hotels

3,851,989 rooms

672 hotels

106,080 rooms

638 hotels

115,842 rooms

486 hotels

127,280 rooms

8,140 hotels

1,148,815 rooms

5,118 hotels

1,048,878 rooms

Global performance As of August 2013

Europe €

YE11 YE12 YTD 13

5.4% 4.4% 0.5%

Asia Pacific $

YE11 YE12 YTD 13

3.8% -0.3% -3.8 %

North America $

YE11 YE12 YTD 13

8.0% 6.4% 5.7%

Middle East & Africa $

YE11 YE12 YTD 13

-2.1% 5.4% 5.5%

Constrained Supply YTD 2013, YoY % Chg, supply, demand, RevPAR

Asia Pacific

Europe €

Middle East

C&SA North America

Africa

-1%

1%

3%

5%

7%

9%

11%

0% 1% 2% 3% 4% 5% 6% 7%

Dem

and

Supply

Back to Peak? RGI Index on YE 2008, US dollars, only Europe in Euros

0.75

0.8

0.85

0.9

0.95

1

1.05

1.1

1.15

1.2

YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE 2012

Africa

Europe

Middle East

N. America

Asia Pacific

CSA

USA vs Europe Demand Percent Change 12MMA % change YE 2000 to Mar 2013

-15

-10

-5

0

5

10

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

USA Europe

Aug‘13

2.4%

Aug‘13

2.6%

Nov ‘10

6.8%

Feb ‘11

7.7%

Jul ‘09

-7.3% Aug ’09

-7.1%

Mar ‘02

-4.7%

Mar ‘02

-5.5%

www.strglobal.com

Europe

Europe Room Supply/Demand %Chg

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

2005 2006 2007 2008 2009 2010 2011 2012

Supply % Chg Demand % Chg

12MMA YE 2005 to Aug 2013

Nov ‘10

6.8%

Jul ‘09

-7.3%

Aug‘13

2.6%

Europe Occ/ADR %Chg

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

2005 2006 2007 2008 2009 2010 2011 2012

Occ % Chg ADR % Chg

12MMA – YE 2005 to Aug 2013

Aug ‘13

1.7%

May ‘11

5.8% Jan ‘11

5.4%

Jul ‘09

-8.4% Nov ‘09

-11.5%

Aug ‘13

-0.1%

Europe RevPAR % Chg

-20%

-15%

-10%

-5%

0%

5%

10%

15%

2005 2006 2007 2008 2009 2010 2011 2012

RevPAR % Chg

12 MMA YE 2005 to Aug 2013 May ‘11

10.9%

Oct ‘09

-18.2%

Aug ‘13

1.5%

Europe actual performance

20 €

30 €

40 €

50 €

60 €

70 €

80 €

90 €

100 €

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1,600,000,000

1,800,000,000

2005 2006 2007 2008 2009 2010 2011 2012

Supply Demand RevPAR

12 MMA YE 2005 to Aug 2013

European Regions Occ/ADR/RevPAR YTD 2012 & YTD 2013 in €

YTD 2012 Occ ADR RevPAR

Total 63.6 102.49 65.16

Eastern 56.1 92.41 51.87

Northern 67.8 96.46 65.43

Southern 59.5 98.22 58.40

Western 64.2 116.40 74.74

YTD 2013 Occ ADR RevPAR

Total 67.2 101.97 68.49

Eastern 60.6 84.47 51.22

Northern 72.5 94.16 68.24

Southern 63.1 106.22 67.03

Western 66.1 113.68 75.18

Key Cities - Europe YTD August 2013, % Chg, Occ and ADR (local currency)

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Occupancy ADR

Key European Cities

€50

€100

€150

€200

€250

€300

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

Occupancy ADR €

YTD August 2013 Occupancy & ADR - €

£134

Pipeline Europe

4.33M

33,972 134,819

Supply

Existing Recently Opened Pipeline

7% 15%

22%

18% 6% 11%

21%

Active Pipeline

Luxury Upper Upscale Upscale

Upper Midscale Midscale Economy

Unaffiliated

Distribution of Pipeline Rooms

Top Pipeline - New Rooms 2013 & 2014

Lost Decade? EUzone GDP/Demand % chg

-15

-12

-9

-6

-3

0

3

6

9

2004 2009 2014

GDP Demand

*Eurozone Demand & GDP % Change, Quarterly 2004 – 2014F

GDP Source: Oxford Economics

2013 Forecast

2014 Forecast

Questions?

ewinkle@strglobal.com

Presentation:

http://www.hotelnewsnow.com/Presentation