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TRANSCRIPT
3 CBRE HOTELS | 2017 OUTLOOK
NATIONAL ECONOMIC OUTLOOK – 2017/18
Source: Statistics Canada, Conference Board of Canada, Canadian Outlook Autumn 2016, Scotiabank Group – Global Forecast Update January 2017; CIBC World Markets – Monthly FX Outlook, 2017; RBC – Economic and Financial Market Outlook – 2017
Source: CBRE Hotels
$1.58
$1.54
$1.59
$1.63 $1.66
$1.70
$1.74 $1.76
$1.80 $1.83
$1.87
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
$1.45
$1.50
$1.55
$1.60
$1.65
$1.70
$1.75
$1.80
$1.85
$1.90
2008 2009 2010 2011 2012 2013 2014 2015 2016f 2017f 2018f
% C
hange
Real GDP % Change
4 CBRE HOTELS | 2017 OUTLOOK
NATIONAL TRAVEL OUTLOOK 2016/17
Overnight Travel 2015 2016 Estimate 2017 Forecast
Business travel domestic 0.6% 1.2% 2.4%
Pleasure travel domestic 2.6% 2.3% 3.2%
Total domestic travel 1.9% 2.0% 2.7%
U.S. Travel 7.7% 7.8% 3.9%
Overseas travel 5.5% 8.7% 6.4%
Total Overnight Travel 2.6% 3.0% 3.0%
National accommodation demand growth 0.2% 1.5%* 2.4%
Source: Canadian Tourism Research Institute, Conference Board of Canada, Fall 2016
*Actual Results
Source: CBRE Hotels
6 CBRE HOTELS | 2017 OUTLOOK
CBRE HOTELS LENDER SURVEY RESULTS
Loan to Value Ratio
2016F 2017F
<50% 0% 0%
50%-59% 33% 33%
60%-69% 67% 67%
Amortization Period
2016F 2017F
<20 yrs 40% 40%
20-25 yrs 40% 40%
> 25 yrs 20% 20% 27
%
27%
67%
67%
7%
7%
2016f 2017f
Inte
rest
Rat
es
3-4% 4-5% 5-6%
9 CBRE HOTELS | 2017 OUTLOOK
NATIONAL SUPPLY & DEMAND OUTLOOK
Source: CBRE Hotels
1.3% 1.1%
1.5%
0.2%
1.5%
2.4%
2015 2016 2017f 2015 2016 2017f
Supply Demand
Supply & Demand Growth
10 CBRE HOTELS | 2017 OUTLOOK
NATIONAL TOP LINE OUTLOOK
Source: CBRE Hotels
2014 2015 2016 2017F
Occupancy 64% 64% 64% 64%
ADR $137 $144 $149 $154
RevPAR $88 $91 $95 $99
11 CBRE HOTELS | 2017 OUTLOOK
NATIONAL ADR, REVPAR & BOTTOM LINE OUTLOOK
Source: CBRE Hotels
ADR Growth
2015 Actual 4.8%
2016 Actual 3.3%
2017 Forecast 3.7%
RevPAR Growth
2015 Actual 3.6%
2016 Actual 3.6%
2017 Forecast 4.6%
$11.8
$13.1
$13.9
2015 2016e 2017f
Adjusted Net Operating Income/ Available
Room ($000’s)
9.2%
10.2%
6.4%
13 CBRE HOTELS | 2017 OUTLOOK
ATLANTIC CANADA – GDP BY PROVINCE
Source: Scotiabank Global Forecast Update, January 17, 2017
0.3%
1.3%
1.3%
0.5%
-1.2
%
1.2%
1.3%
0.6%
-0.9
%
1.3%
1.2%
0.6%
NL PE NS NB
Real
GD
P
2016 2017f 2018f
14 CBRE HOTELS | 2017 OUTLOOK
ATLANTIC CANADA – TRAVEL MARKET OUTLOOKS
1.0%
1.9%
2.4%
1.9%
0.5%
6.9%
3.3%
2.3%
1.6%
2.9%
2.9%
2.6%
NL PE NS NB
Tota
l Ove
rnig
ht P
rovi
nce
Visi
ts
% G
row
th
2015 2016f 2017fSource: Conference Board of Canada Travel Outlooks, Fall 2016
15 CBRE HOTELS | 2017 OUTLOOK
ATLANTIC CANADA SUPPLY & DEMAND OUTLOOK
Source: CBRE Hotels
Supply & Demand Growth
0.7% 0.9%
2.2%
1.2%
4.5%
2.6%
2015 2016 2017f 2015 2016 2017f
Supply Demand
16 CBRE HOTELS | 2017 OUTLOOK
ATLANTIC CANADA TOP LINE OUTLOOK
2014 2015 2016 2017F
Occupancy 58% 59% 61% 61%
ADR $124 $127 $129 $132
RevPAR $72 $75 $78 $81
Source: CBRE Hotels
17 CBRE HOTELS | 2017 OUTLOOK
ATLANTIC CANADA ADR, REVPAR & BOTTOM LINE OUTLOOK
ADR Growth
2015 Actual 2.8%
2016 Actual 1.6%
2017 Forecast 2.2%
RevPAR Growth
2015 Actual 3.4%
2016 Actual 5.2%
2017 Forecast 2.7%
Source: CBRE Hotels
$8.2
$8.9
$9.1
2015 2016e 2017f
Adjusted Net Operating Income/ Available
Room ($000’s)
14.6%
8.7% 2.8%
18 CBRE HOTELS | 2017 OUTLOOK
ATLANTIC CANADA OUTLOOKS
Source: CBRE Hotels
2014 2015 2016 2017F
Halifax 62% 64% 68% 69%
$128 $133 $136 $140
RevPAR $80 $85 $93 $96
St. John’s 69% 65% 61% 57%
$156 $154 $151 $151
RevPAR $108 $101 $93 $87
Atlantic Canada 58% 59% 61% 61%
$124 $127 $129 $132
RevPAR $72 $75 $78 $81
20 CBRE HOTELS | 2017 OUTLOOK
WESTERN CANADA – GDP BY PROVINCE
Source: Scotiabank Global Forecast Update, January 17, 2017
2.1%
-0.5
%
-2.7
%
3.1%
2.0%
1.7%
2.1%
2.3%
1.9%
2.0%
2.4%
2.3%
MB SK AB BC
Real
GD
P
2016 2017f 2018f
21 CBRE HOTELS | 2017 OUTLOOK
WESTERN CANADA – TRAVEL MARKET OUTLOOKS BY PROVINCE
3.0%
1.0%
0.0%
3.9%
3.0%
0.6%
-0.4
%
4.5%
3.0%
2.8%
2.2%
3.4%
MB SK AB BC
Tota
l Ove
rnig
ht P
rovi
nce
Visi
ts
% G
row
th
2015 2016f 2017f
Source: Conference Board of Canada Travel Outlooks, Fall 2016
22 CBRE HOTELS | 2017 OUTLOOK
WESTERN CANADA SUPPLY & DEMAND OUTLOOK
Supply & Demand Growth
Source: CBRE Hotels
2.1% 1.9% 2.0%
-2.1% -1.2%
2.5%
2015 2016 2017f 2015 2016 2017f
Supply Demand
23 CBRE HOTELS | 2017 OUTLOOK
WESTERN CANADA TOP LINE OUTLOOK
2014 2015 2016 2017F
Occupancy 65% 62% 60% 61%
ADR $143 $148 $151 $156
RevPAR $93 $92 $91 $94
Source: CBRE Hotels
24 CBRE HOTELS | 2017 OUTLOOK
WESTERN CANADA ADR, REVPAR & BOTTOM LINE OUTLOOK
ADR Growth
2015 Actual 3.8%
2016 Actual 1.8%
2017 Forecast 3.2%
RevPAR Growth
2015 Actual (0.5%)
2016 Actual (1.3%)
2017 Forecast 3.6%
Source: CBRE Hotels
$14.7
$14.0
$14.7
2015 2016e 2017f
Adjusted Net Operating Income/ Available
Room ($000’s)
1.3%
(5.1%)
5.3%
25 CBRE HOTELS | 2017 OUTLOOK
Supply & Demand Growth
Source: CBRE Hotels
ALBERTA SUPPLY & DEMAND OUTLOOK
2.9% 2.9% 3.7%
-10.9%
-8.3%
2.5%
2015 2016 2017f 2015 2016 2017f
Supply Demand
26 CBRE HOTELS | 2017 OUTLOOK
ALBERTA* TOP LINE OUTLOOK
2014 2015 2016 2017F
Occupancy 68% 59% 52% 52%
ADR $143 $141 $132 $132
RevPAR $97 $83 $69 $68
Source: CBRE Hotels
*Excluding resort properties
27 CBRE HOTELS | 2017 OUTLOOK
Source: CBRE Hotels
ALBERTA ADR, REVPAR & BOTTOM LINE OUTLOOK
ADR Growth
2015 Actual (1.5%)
2016 Actual (6.6%)
2017 Forecast -
RevPAR Growth
2015 Actual (14.7%)
2016 Actual (16.8%)
2017 Forecast (1.1%)
$15.7
$9.6 $8.8
2015 2016e 2017f
Adjusted Net Operating Income/ Available
Room ($000’s)
(22.8%)
(38.7%) (8.4%)
28 CBRE HOTELS | 2017 OUTLOOK
Supply & Demand Growth
Source: CBRE Hotels
BRITISH COLUMBIA SUPPLY & DEMAND OUTLOOK
0.7% 0.5% 0.5%
4.2% 3.9%
2.5%
2015 2016 2017f 2015 2016 2017f
Supply Demand
29 CBRE HOTELS | 2017 OUTLOOK
BRITISH COLUMBIA TOP LINE OUTLOOK
2014 2015 2016 2017F
Occupancy 64% 66% 68% 70%
ADR $141 $153 $163 $172
RevPAR $90 $101 $111 $120
Source: CBRE Hotels
30 CBRE HOTELS | 2017 OUTLOOK
Source: CBRE Hotels
B.C. ADR, REVPAR & BOTTOM LINE OUTLOOK
ADR Growth
2015 Actual 8.6%
2016 Actual 6.8%
2017 Forecast 5.5%
RevPAR Growth
2015 Actual 12.4%
2016 Actual 10.3%
2017 Forecast 7.6%
$17.3 $20.6
$23.1
2015 2016e 2017f
Adjusted Net Operating Income/ Available
Room ($000’s)
35.9% 18.8%
12.3%
31 CBRE HOTELS | 2017 OUTLOOK
WESTERN CANADA OUTLOOKS
2014 2015 2016 2017F
Vancouver 73% 76% 79% 79%
$146 $163 $175 $189
RevPAR $106 $124 $138 $149
Calgary 70% 64% 59% 57%
$167 $158 $146 $147
RevPAR $117 $102 $85 $84
Edmonton 69% 63% 59% 56%
$134 $136 $130 $128
RevPAR $93 $86 $77 $72
Western Canada 65% 62% 60% 61%
$143 $148 $151 $156
RevPAR $96 $92 $91 $94
32 CBRE HOTELS | 2017 OUTLOOK
WESTERN CANADA OUTLOOKS
2014 2015 2016 2017F
Saskatoon 72% 65% 60% 60%
$147 $146 $133 $136
RevPAR $106 $95 $79 $81
Regina 67% 62% 60% 59%
$134 $131 $128 $130
RevPAR $90 $82 $76 $77
Winnipeg 62% 63% 66% 66%
$124 $126 $124 $127
RevPAR $77 $79 $82 $84
Western Canada 65% 62% 60% 61%
$143 $148 $151 $156
RevPAR $96 $92 $91 $94
34 CBRE HOTELS | 2017 OUTLOOK
CENTRAL CANADA – GDP BY PROVINCE
Source: Scotiabank Global Forecast Update, January 17, 2017
1.6%
2.6%
1.7%
2.3%
1.6%
2.3%
QC ON
Real
GD
P
2016 2017f 2018f
35 CBRE HOTELS | 2017 OUTLOOK
CENTRAL CANADA – TRAVEL MARKET OUTLOOKS
Source: Conference Board of Canada Travel Outlooks, Fall 2016
2.2%
3.3%
2.8%
3.5%
3.6%
2.9%
QC ON
Tota
l Ove
rnig
ht P
rovi
nce
Visi
ts
% G
row
th
2015 2016f 2017f
36 CBRE HOTELS | 2017 OUTLOOK
CENTRAL CANADA SUPPLY & DEMAND OUTLOOK
Supply & Demand Growth
Source: CBRE Hotels
0.7% 0.4% 1.0%
2.4%
3.8%
2.3%
2015 2016 2017f 2015 2016 2017f
Supply Demand
37 CBRE HOTELS | 2017 OUTLOOK
CENTRAL CANADA TOP LINE OUTLOOK
2014 2015 2016 2017F
Occupancy 64% 66% 68% 69%
ADR $134 $142 $149 $156
RevPAR $86 $93 $101 $107
Source: CBRE Hotels
38 CBRE HOTELS | 2017 OUTLOOK
CENTRAL CANADA ADR, REVPAR & BOTTOM LINE OUTLOOK
ADR Growth
2015 Actual 6.1%
2016 Actual 5.0%
2017 Forecast 4.3%
RevPAR Growth
2015 Actual 7.9%
2016 Actual 8.5%
2017 Forecast 5.7%
Source: CBRE Hotels
$10.4 $12.4
$13.8
2015 2016e 2017f
Adjusted Net Operating Income/ Available
Room ($000’s)
20.2% 19.5% 11.1%
39 CBRE HOTELS | 2017 OUTLOOK
Supply & Demand Growth
Source: CBRE Hotels
QUEBEC SUPPLY & DEMAND OUTLOOK
0.4% 0.0%
0.7%
2.1%
1.5%
2.0%
2015 2016 2017f 2015 2016 2017f
Supply Demand
40 CBRE HOTELS | 2017 OUTLOOK
QUEBEC TOP LINE OUTLOOK
2014 2015 2016 2017F
Occupancy 65% 66% 68% 69%
ADR $145 $152 $159 $166
RevPAR $95 $101 $108 $114
Source: CBRE Hotels
41 CBRE HOTELS | 2017 OUTLOOK
QUEBEC SUPPLY & DEMAND OUTLOOK
ADR Growth
2015 Actual 4.7%
2016 Actual 4.9%
2017 Forecast 4.0%
RevPAR Growth
2015 Actual 6.5%
2016 Actual 7.5%
2017 Forecast 5.4%
$9.3 $11.0
$12.3
2015 2016e 2017f
Adjusted Net Operating Income/ Available
Room ($000’s)
17.9% 18.9%
11.4%
42 CBRE HOTELS | 2017 OUTLOOK
QUEBEC MAJOR MARKET OUTLOOKS
Source: CBRE Hotels
2014 2015 2016 2017F
Montreal 69% 71% 73% 74%
$146 $154 $163 $174
RevPAR $101 $109 $118 $129
Quebec City 63% 63% 66% 67%
$151 $158 $165 $170
RevPAR $95 $100 $109 $113
Quebec 65% 66% 68% 69%
$145 $152 $159 $166
RevPAR $95 $101 $108 $114
43 CBRE HOTELS | 2017 OUTLOOK
ONTARIO SUPPLY & DEMAND OUTLOOK
0.7% 0.6% 0.9%
2.4% 2.3% 2.5%
2015 2016 2017f 2015 2016 2017f
Supply Demand
Source: CBRE Hotels
Supply & Demand Growth
44 CBRE HOTELS | 2017 OUTLOOK
ONTARIO TOP LINE OUTLOOK
2014 2015 2016 2017F
Occupancy 64% 65% 68% 69%
ADR $130 $139 $146 $153
RevPAR $84 $90 $99 $105
Source: CBRE Hotels
45 CBRE HOTELS | 2017 OUTLOOK
ONTARIO ADR, REVPAR & BOTTOM LINE OUTLOOK
ADR Growth
2015 Actual 6.3%
2016 Actual 5.4%
2017 Forecast 4.5%
RevPAR Growth
2015 Actual 8.1%
2016 Actual 9.2%
2017 Forecast 6.1%
$11.0 $13.2
$14.7
2015 2016e 2017f
Adjusted Net Operating Income/ Available
Room ($000’s)
21.1% 20.6%
11.4%
Source: CBRE Hotels
46 CBRE HOTELS | 2017 OUTLOOK
ONTARIO MAJOR MARKET OUTLOOKS
Source: CBRE Hotels
2014 2015 2016 2017F
Toronto 70% 71% 74% 74%
$139 $149 $160 $169
RevPAR $97 $106 $119 $126
Niagara Falls 61% 64% 67% 69%
$141 $157 $162 $168
RevPAR $87 $101 $108 $115
Ottawa 70% 72% 72% 73%
$144 $151 $157 $164
RevPAR $101 $109 $114 $119
Ontario 64% 65% 68% 69%
$130 $139 $146 $153
RevPAR $84 $90 $99 $105
48 CBRE HOTELS | 2017 OUTLOOK
MAJOR MARKET OUTLOOKS REVPAR PROJECTION - 2017
> 5% RevPar Growth
0 - 5% RevPar Growth
Negative RevPar Growth
*”Major Markets” refer to Greater Metro Areas Source: CBRE Hotels
2017 RevPAR Ranking
Vancouver $149
Montreal $129
Toronto $126
Ottawa $119
Niagara Falls $115
Quebec City $113
Halifax $96
St. John’s $87
Winnipeg $84
Calgary $84
Saskatoon $81
Regina $77
Edmonton $72
-6%-4%-2%0%2%4%6%8%
Mon
trea
l
Vanc
ouve
r
Nia
gara
Fal
ls
Toro
nto
Otta
wa
Que
bec
City
Hal
ifax
Win
nipe
g
Sask
atoo
n
Regi
na
Cal
gary
St. J
ohn'
s
Edm
onto
n
50 CBRE HOTELS | 2017 OUTLOOK
PROVINCIAL FINANCIAL OUTLOOK 2014-2017
NOTE: Adjusted Net Operating Income is defined as income after property taxes, insurance, management fees, franchise fees, and capital reserves; but before rent, interest, income taxes, depreciation and amortization. Source: CBRE Hotels
$12.
8 $20.
3
$9.1
$7.9
$17.
3
$15.
7
$11.
0
$9.3
$20.
6
$9.6
$13.
2
$11.
0
$23.
1
$8.8
$14.
7
$12.
3
B.C. Alberta Ontario Quebec
Adj
uste
d N
et O
pera
ting
Inco
me
Per
Ava
ilabl
e Ro
om ($
000’
s)
2014 2015 2016e 2017f
Valuation & Advisory Services Brokerage Brian Flood David Larone Brian Stanford Fran Hohol Erin O’Brien Cindy Schoenauer David Ferguson
Rebecca Godfrey Kirstin Hallett Nicole Nguyen Robert Sedore Lauren Arnold Vanessa Boland Kailey Gomez Carol Lopes
Bill Stone Greg Kwong Deborah Borotsik Marc-Aurele Mailloux-Gagnon Scott Duff Michael Beckley Raymond Chan Karina Saks Ashley Kerr