Accelerating success.

Henry Stewart’s Hotel Investment and Development Conference

Trends, Transactions and Outlook for Germany and the NetherlandsDirk Bakker – Head of EMEA Hotels

11 September 2013

Content

1. Understanding Hotel Values

2. The Global Hospitality Sector

3. The German and Dutch Hotel ‘Climate’

4. What the Future Holds

5. Colliers International

1. Understanding Hotel Values

Macro

Micro

Object

Content

1. Understanding Hotel Values

2. The Global Hospitality Sector

3. The German and Dutch Hotel ‘Climate’

4. What the Future Holds

5. Colliers International

2. The Global Hospitality SectorGlobal Tourism Statistics

45.5% of world total 46.8% of world total 45.0% of world total

Source: World Tourism Organisation (UNWTO), 2011

Mexico

Malaysia

Germany

Turkey

UK

Italy

Spain

China

USA

France

22.3

24.6

26.9

27.0

28.3

43.6

52.7

55.7

59.8

77.1

Top 10 Int'l Tourism Arrivals (m)

Hong-Kong

Macao

Australia

UK

Germany

Italy

China

France

Spain

USA

22.2

27.8

29.6

32.4

34.7

38.8

45.8

46.6

52.5

103.5

Top 10 Int'l Tourism Receipts($bn)

Australia

Russian Fed.

Italy

Japan

Canada

France

UK

China

USA

Germany

22.2

26.5

27.1

27.9

29.6

38.5

50.0

54.9

75.5

78.1

Top 10 Int'l Tourism Expenditure ($bn)

European cities

2. The Global Hospitality Sector European Tourism Statistics

3,0%

2,7%

2000 – 2012 CAGR

Source: World Tourism Organisation (UNWTO), 2012

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

100

200

300

400

500

600

251 255 258 252 267 282302 318 322

297 311335

356389 389 401 408

428451

473495 497

472 487517 534

European tourism arrivals

Int'l tourism receipts (€bn) Int'l tourism arrivals (m)

2. The Global Hospitality Sector International Tourist Arrivals

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

250

500

750

1,000

1,250

2,000

1.0bn

1.4bn

1.8bn

2012

1,750

1,500

Source: World Tourism Organisation (UNWTO), 2012

Forecast

At the estimated growth of 3.3%, International tourist arrivals will reach 1.8 billion by 2030

2. The Global Hospitality Sector Hotel Transactions Global & Europe

Source: HVS, Jones Lang La Salle, Colliers International* 2013 Global and Europe transaction volume growth is assumed to be equal

2005 2006 2007 2008 2009 2010 2011 2012E 2013F* -

20

40

60

80

100

120

140

Transaction Volumes (€bn)

Global Europe

Content

1. Understanding Hotel Values

2. The Global Hospitality Sector

3. The German and Dutch Hotel ‘Climate’

3.1 Economic & Political Climate

3.2 Market Performance

3.3 Investment Landscape

3.4 Contract Structure

3.5 Property Location

3.6 Brand

4. What the Future Holds

5. Colliers International

Case: The Vincent Hotel Group

10

3. The Dutch and German Hotel ‘Climate’

ContractStructure

Economic &MarketClimate

Value

Investment Landscape

Market Performance

Location

Brand(operations)

• World’s fourth-largest economy by nominal GDP

• Global leader in industries like machinery, vehicles and chemicals

• Third-largest exporting nation

• Triple-A Rating (S&P, Moody‘s, Fitch), GDP per capita: € 32,276 (10th position in the EU)

• Leading nation in “green“ and sustainable energy and development

• Second-lowest unemployment rate in the European Union (5.3 % in July 2013)

3.1 Economic & Market ClimateGermany - Highlights

3.1 Economic & Market ClimateGermany – Market indicators

2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F€ 0

€ 10

€ 20

€ 30

€ 40

€ 50

€ 60

€ 70

-6%

-4%

-2%

0%

2%

4%

6%

RevPar German GDP EU GDP Global GDP

Source: Eurostat, IMF, Hotelverband Deutschland (IHA)

• A triple-A rating (S&P): strong net external position and high per capita GDP (€36,900

4th in EU)

• Second only to Germany as the strongest country in terms of financial stability in the

Eurozone

• Netherlands reputation as an open economy with a longstanding history of international

trade; export of goods and services accounted for 85.0% of GDP in 2012

• Ranked 7th in the World Economic Forum Financial Development Report

• Netherlands known for its high quality financial services

3.1 Economic & Market ClimateThe Netherlands - Highlights

3.1 Economic & Market ClimateThe Netherlands – Market indicators

2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F€ 0

€ 10

€ 20

€ 30

€ 40

€ 50

€ 60

€ 70

€ 80

€ 90

-6%

-4%

-2%

0%

2%

4%

6%

RevPar Dutch GDP EU GDP Global GDP

Source: Eurostat, IMF, Hosta, Colliers International

• Number 3 strongest hotel performance after London and Paris

• Local authorities forecast an increase in demand of hotel nights of 2.0% to 2.7% on a

yearly basis up to 2020 for the Amsterdam Metropolitan Area

• Amsterdam will continue to target the 9,000 additional rooms in 2015

• Local authorities aim and forecast a healthy occupancy between 70% and 75% for

Amsterdam

• There are about 5,800 additional rooms offered through websites like Airbnb and Wimdu,

estimated revenues: €15m in 2012

• Over 200 illegal hotels in the city centre of Amsterdam, local authority is now actively

closing them mainly in the city centre (area 1012)

3.1 Economic & Market ClimateThe Netherlands – Amsterdam Hotel Market

3.2 Market performance Hotel Performance Indicators

Hotel market in selected German and Dutch cities 

CityRevPAR growth

2010RevPAR growth

2011RevPAR growth

2012Outlook

Berlin 11.5% (1.1)% 8.5% Stagnation

Frankfurt 21.3% 4.2% 5.0% Stagnation

Munich 31.1% 0.4% 11.5% Increase

Hamburg 11.1% 6.8% 1.9% Stagnation

Amsterdam* & Schiphol 12.3% 11.0% 0.0% Stabilise

Source: PwC, municipality of Amsterdam

* Room nights in Amsterdam increased 10,7% in 2013Q1

3.3 Investment LandscapeEuropean transactions outlook

Transactions Outlook Continued limited availability of debt and

high costs of financing of new acquisitions

Branded, centrally located hotels have increased financing opportunities

60.0% LTV to become norm, not exception

Current cap rates at 8.0% expected to remain stable or increase

New debt funds with more expensive terms: i.e. StarFin by Starwood Capital, GE Capital Real Estate Europe

Normalising debt markets on the long term

EMEA transaction volume increase in the first half of 2013 by 38.0% to € 5.5 billion

Major European transactions in Western and Northern Europe

Most attractive European markets:

1. UK: 41.0% 2. France: 23.0% 3. Germany: 12.0%

Top 3 transaction parties in EMEA:

1. Sovereign Wealth Funds (Middle East)2. Global Investors (ex.: Westmont,

Starwood Capital, Morgan Stanley)3. Domestic Investors

Germany (2012) Volume: ca. €1,300m Long term leases or

vacant possession, High Net Worth Individuals and Institutional Investors

Netherlands (2012) Volume: ca. €190m Term Leases,

Institutional Investors

Source: Jones Lang Lasalle, Propertywire.com, KPMG, Colliers International

3.3 Investment LandscapeDutch Hotel Ownership

Source: Jones Lang Lasalle 2012

Europe; 51%

Domestic; 26%

US; 19%

Asia; 4%

Hotel Ownership by Nationality

Hotel Opera-

tors; 49%

Private Equity firms; 14%

HNWIs; 11%

Institu-tional

In-vestors;

10%

Other; 16%

Hotel Ownership by Investor Type

Comparable information not available for Germany

3.4-6 Contract structure, Location, Brand Case: Office Conversions, a partnership

Content

1. Understanding Hotel Values

2. The Global Hospitality Sector

3. The German and Dutch Hotel ‘Climate’

4. What the Future Holds

5. Colliers International

4. What the Future HoldsImpact Factors of the Global Travel Industry

• Emerging new markets and destinations

• Sustainability (Social, economic and environment)

• Technology Driven Distribution

• Changing Consumer behavior

• Tourism and External shocks

• Security and Travel facilitation

4. What the Future HoldsEuropean Hotel Market Trends

• Increase international brand presence

• More risk-bearing contract variations

• More management contract variations

• Increase quality products/brands

• More variation in budget hotels

• Investment climate for hotels to improve

Increased Consolidation

Content

1. Understanding Hotel Values

2. The Global Hospitality Sector

3. The German and Dutch Hotel ‘Climate’

4. What the future holds

5. Colliers International

5. Colliers InternationalAbout Colliers International

482 offices62 countries6 continents UNITED STATES: 140CANADA: 4LATIN AMERICA: 20ASIA PACIFIC: 195EMEA: 85   • € 1.3 bn in annual

revenue• 116 m square meter

under management• 12,300 employees 

  COLLIERS INTERNATIONAL Buitenveldertselaan 5Postbus 751681070 AD AmsterdamTEL +31 (0)20 540 55 40FAX +31 (0)20 646 45 36 www.colliers.nl

 Accelerating success.

Colliers International is a leader in global real estate services defined by our spirit of enterprise. Through a culture of service excellence, and a shared sense of initiative, we have integrated the resources of 12,300 real estate specialists throughout 482 offices in 62 countries to accelerate the success of our clients.

5. Colliers InternationalColliers Hotel Services

Operations review

International Resort

Advisory

Brokerage

Market & Financial

Feasibility

Debt & Equity Raising

Valuation

Operator search & selection

Strategic & Financial Advisory

Colliers Hotel Services

Agency and Investment services

Valuation

Market and financial feasibility studies

Operator search and selection

Strategic and financial advisory

Development Advisory

Accelerating success.

Thank You