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Hotel Industry Overview

Lodging Conference

Ali HoytSenior Director, Consulting and Analytics

[email protected]

© 2017 STR. All Rights Reserved.

Agenda

Total U.S. Review

Class Review

Segmentation

Pipeline

Forecast


Total U.S. Review


September 2017

RevPAR +2.4%

ADR +1.0%

Highest September Room Demand: 108 Million

Transient ADR %: -1.0% (first decline since the recovery)

Top 25 ADR %: -0.4% (first decline since the recovery)


Demand Growth Continues to Hold

Sep YTD 2017, Total US Results

Actual % Change

Room Supply 1.8% p

Room Demand 2.5% p

Occupancy 67.4% 0.6% p

ADR $127 2.0% p

RevPAR $86 2.6% p


US September YTD RevPAR: 2 Markets Dragged Down US Results

Total US YTD: +2.6%NYC: - 0.7%San Francisco: - 3.5%Miami: - 3.9%

Total US excluding NYC, SF & Miami : +3.1%

RevPAR % Change, YTD September 2017


US September RevPAR: 2 States Helped Mask Very Mediocre Results

Total US: +2.4%Florida: +10.0%Texas: +18.3%

Total US excluding Florida and Texas: +0.7%

RevPAR % Change, September 2017


Quarterly RevPAR % Change: Slow is The New Normal

6.7

8.0

9.1 8.8

7.8

6.4 5.8

4.8

2.6 3.5 3.4 3.2 3.5

2.7 1.9

Q1 Q2 Q3 Q4

2014 2015 2016 2017

Total US, RevPAR % Change, by Quarter, Q1 2014 – Q3 2017


Demand Growth Strong, Well Above 2%

-0.8

-4.7

-7.1

7.7

-8

-4

0

4

8

1990 2000 2010

Supply % Change Demand % Change

Total U.S., Supply & Demand % Change, 12 MMA 1/1990 – 9/2017


Occupancy Growth Continues To Hold

-3.4

-6.7

-9.7

0.6

6.8 7.5

2.1

-10

-5

0

5

1990 2000 2010

Occ % Change ADR % Change

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 9/2017


Declining Occupancies and Rising ADRs Are Not Unprecedented

-4

-2

0

2

4

6

8

1990 1992 1994 1996 1998

OCC % Change ADR % Change

24 Months

42 Months

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 12/1999


RevPAR Growth: 7 Years And Counting

-25

-20

-15

-10

-5

0

5

10

15

1990 2000 2010Total U.S., RevPAR % Change, 1/1990 – 9/2017

56 Months 91 Months111 Months


Class Review


Class: Demand Growth Outpaces Supply Growth Across Most Classes

2.4

1.7

4.1 4.0

0.3

-0.4

2.21.6

4.4 4.4

1.5

0.5

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

Supply % Change Demand % Change

Supply / Demand % Change, by Class, September 2017 YTD


ADR Growth Drives RevPAR Growth

-0.2 -0.1 0.3 0.31.2 0.9

1.6 1.61.5 1.6

2.3 3.0


Occ % Change ADR % Change

RevPAR % Change by Contribution of OCC / ADR % Change, by Class, September 2017 YTD


Upper End Hotels Still Selling 7 Out Of 10 Rooms

72.274.1 73.8

69.2

62.260.3

72.474.2 73.6

68.9

61.459.8


2017 2016

OCC %, by Class, September 2017 & 2016 YTD


September YTD 2017: New Supply Hits NYC, Miami

Market OCC % ADR % Change Influenced By

Nashville, TN 75.4 5.8

Detroit, MI 68.0 4.6

Orlando, FL 79.5 4.5

Seattle, WA 79.8 4.5

Washington, DC-MD-VA 74.0 4.4 Inauguration / Women’s March

Minneapolis/St Paul, MN-WI 68.9 -1.5

New York, NY 86.0 -1.9 New Supply

San Francisco/San Mateo, CA 84.5 -2.2Superbowl L 2016 / Moscone Center

Closed April – September

Miami/Hialeah, FL 76.6 -3.0 New Supply

Philadelphia, PA-NJ 69.0 -3.4 DNC 2016

September 2017 YTD ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets


Segmentation


Transient Performance: Steady Demand IncreasesLift U.S. Numbers

0%

1%

2%

3%

4%

5%

6%

Jan-15 Jan-16 Jan-17

Demand % Change ADR % Change

Transient Demand and ADR % Change, 12 MMA, 1/2014 – 9/2017


Group Performance: ADR Growth Still Healthy

-1%

0%

1%

2%

3%

4%

5%

6%

Jan-15 Jan-16 Jan-17

Demand % Change ADR % Change

Group Demand and ADR % Change, 12 MMA, 1/2014 – 9/2017

Easter Shift

Jewish Holiday Shift


Demand Growth is Transient Driven

0

50

100

150

200

2011 2012 2013 2014 2015 2016 R12 2017

Mill

ion

s

Transient Demand

Group Demand

Total Number of Rooms Sold, Group and Transient, by year 2011 – R12 2017

Demand % Change ‘11 – R12 ’17:Transient: +18%

Group: +6%


Pipeline


Hurricanes Impact Pipeline Numbers, U/C Growth only +6%

Phase 2017 2016 % Change

In Construction 188 178 6%

Final Planning 222 197 13%

Planning 175 174 0.5%

Under Contract 585 549 7%

Total US Pipeline, by Phase, ‘000s Rooms, September 2017 and 2016


Total US Pipeline; Rooms In Construction, in ‘000s; 1/2006 – 9/2017

0

50

100

150

200

250

2006 2008 2010 2012 2014 2016

Low: May ‘1150K

Sep ‘17188.5K

High:Dec ‘07

211K

22.5K

U/C Pipeline Is Growing But Still Below Prior Peak

Tho

usa

nd

s


Limited Service Construction Is The Name Of The Game

8.6

24.2

59.463.7

9.8

2.6

20.2

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated

US Pipeline, Rooms In Construction , ‘000s Rooms, by Scale, September 2017

83%


Large Metros Grow Rapidly

Market Rooms In Construction % Of ExistingNashville, TN 5,497 13.5%New York, NY 13,533 11.5%Seattle, WA 4,228 9.4%Denver, CO 4,091 8.8%Dallas, TX 7,047 8.4%

US Pipeline, Rooms U/C and as % of Existing Supply, Largest % In Top 26 Markets, September 2017


Top 26 Markets Have 47% of U/C Rooms

88.799.7

84.7

137.2

75.0

99.9

Top 26 Markets Rest of the US

In Construction Final Planning Planning

US Pipeline, Rooms (‘000s), Top 26 Markets vs. All Other Markets, September 2017


2017 / 2018 Forecast


U.S. Industry Forecast

Outlook

2017Forecast

2018Forecast

Supply 2.0% 2.1%

Demand 2.0% 1.9%

Occupancy 0.0% -0.2%

ADR 2.3% 2.5%

RevPAR 2.3% 2.3%

Questions?



Thank You!

Ali Hoyt

Senior Director, Consulting & Analytics

[email protected]

@ahoyt_STR

www.linkedin.com/in/alisonhoyt

hotel industry overview - lodging conference lodging conf… · highest september room demand: 108...

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