impact of covid-19 on hotel performance2020/03/24 · source: 2020 str, llc / str global, ltd....

Source: 2020 STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Realty Information, Inc. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. The information in the presentation should not be construed as investment, tax, accounting or legal advice.

Impact of COVID-19on hotel performancePatricia Boo – Area Director Central & South America

Source: STR. 2020 © CoStar Realty Information, Inc.

Agenda

2

1.Housekeeping

3.Epicenter: China

• Performance• Comparing

SARS to COVID-19

2.Global Overview

2019 Results

4.Latam

5.Conclusions

Source: STR / 2020 © CoStar Realty Information, Inc..

Some very important reminders


#1 This is about lives, not numbersCorona virus cases around the world

Source：WHO


#2 Unprecedented challengeWhat happens is fundamentally dependant on the course of the virus


#3 We at STR can never give guidance on priceWe must not facilitate anti-competitive behaviour, we can comment on the facts

Anti-Trust Statement & Reminder: Please do not discuss prices, rates, surcharges, marketing strategies, or your operational intentions and plans. Such discussions among competitors could be viewed as collusive activity in violation of anti-trust laws.


Some context… Hotel performance cycle

Source: Giphy.com


2.1%1.1% 1.4% 1.4%

5.8%

1.1%

3.6%

1.9%1.9%

-1.6%

3.2%1.8%

8.2%

2.2% 2.2%0.9%

North America& Caribbean

Central America South America Europe Middle East Africa Asia Australia &Oceania

Supply Demand

Supply now outpacing demand growth in regions around the worldGlobal Supply & Demand % Change, Full Year 2019

Supply > Demand

Supply > Demand Supply > Demand Supply > Demand

© 2020 STR. All Rights Reserved.

Middle East

Southern Africa

Northern Africa

+10.7%

Impacting performance with RevPAR down or slowing USD, Europe in EUR, Constant Currency, Full Year 2019

Europe

Asia+0.7%

+2.6%

+2.2%

+5.6%

+0.9%

-5.1%-3.3%

Australia & Oceania

-1.7%

North America

Central America

South America excl. Venezuela


The impact of COVID-19

China

11Photo by Andre Benz on Unsplash

https://unsplash.com/@trapnation?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyTexthttps://unsplash.com/s/photos/asia?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText


0%

10%

20%

30%

40%

50%

60%

70%

80%

1/1/2020 1/8/2020 1/15/2020 1/22/2020 1/29/2020 2/5/2020 2/12/2020 2/19/2020 2/26/2020

2020 2019

Occ decrease: -89%

2019 Chinese New Year Holiday

China drops Occ by 89% within 2 weeksMainland China, Occupancy, Daily Data, January 1st – March 1st 2019 & 2020


China Key Markets Hotels PerformanceJan, Feb 2020, RevPAR, % Change, LC

-23.8

-25.1

-28.7

-20.5

-22.6

12.8

-55.7

-35.5

-20.5

-25.6

-3.9

0.1

Beijing

Shanghai

Taiwan

Zhengzhou

Wuhan

Changsha

Xi’an

Chengdu

Sanya

Shenzhen

Hong KongMacau


-82.3%

-81.2% -75.6%

-85.6%

-14.7%-86.4%

-86.6%

-60.0%

-82.2%

-85.9%-92.8%

-93.0%

Feb ActualData

Jan Actual Data


Predicaments and Solutions around China Hospitality Industry

40% of hotels closed

Hundreds of hotels re-opened last week.Hoteliers are charged and ready for the recovery

2,600+ temporarily closed properties contributes 40% of our total sample hotels; 56% of them are Economy and Midscale hotels

Hotel groups Launched Free-Cancellation Policies and extend 1-year membership towards Guests, and some fee relief policies towards Owners

Nearly 80% hotels closed their online booking.


China outbound travel impacted next


0

2

4

6

8

10

12

14

16

18

HongKong,China

Macao,China

Thailand Japan SouthKorea

Vietnam Singapore Taiwan,China

UnitedStates

France Spain Italy

Mill

ions

2019 2003

Reliance on outbound China tourism has increased significantly2003 vs 2019 Outbound tourism from Mainland China


2148

79

8525

100

22 21 1

151

0

50

100

150

200

250

Feb Mar Apr May Jun Jul Total

Cancelled Postponed

Global events either cancelled or postponed from mid-FebCancelled/postponed events related to COVID-19 as at 10.03.20

18


Forward STAR: Barcelona Business on the Books

Barcelona saw the first major event cancellation due to Coronavirus

89%93% 92%

82%

69% 67% 65%

52%

73% 71%63%

46%

78% 77%

66%

50%51% 53% 52% 52%

Monday, 24 February Tuesday, 25 February Wednesday, 26 February Thursday, 27 February

As at 10th Feb As at 13th Feb As at 19th Feb As at 24th Feb Actualised Performance


Corporate have reacted well in advance of government adviceRestrictions on travel began from 7 Feb and accelerated from 27 Feb

Business Insider


Airlines started now significantly cutting capacityCuts are more than just to impacted countries


Main European airports impactedRevPAR % var, datos semanales desde 10 Feb al 15 Mar, Moneda Local

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Dublin Airport Heathrow Airport Milan MalpensaAirport

Paris Charles deGaulle Airport

Frankfurt Airport Amsterdam AirportSchiphol

3-9 of Feb 10-16 Feb 17-23 Feb 24 Feb - 1 Mar 2-8 Mar 9-15 Mar


Occupancy losses increase rapidlyOccupancy % chg, Week of the 9th of March 2020

23

Negative 55%-70%Vietnam -67%

Singapore -66%

Saudi Arabia -65%

Japan -65%

Czech Republic -64%

Austria -60%

Belgium -60%

Israel -59%

Cambodia -57%

Poland -56%

France -55%

Switzerland -55%

Negative 40-55%Thailand -53%

Spain -50%

Netherlands -50%

Germany -50%

Myanmar -49%

Philippines -49%

Malaysia -45%

India -44%

Laos -43%

Sri Lanka -43%

Egypt -43%

Ireland -41%

Panama -40%

Negative 40-25%Portugal -39%

UAE -37%

Ecuador -36%

Peru -34%

Argentina -30%

Chile -28%

Costa Rica -28%

Maldives -26%

Negative 0-25%UK -23%

Indonesia -23%

Colombia -21%

Australia -17%

New Zealand -15%

Mexico -14%

Brazil -11%

Negative 70%+Italy -92%

South Korea -75%

Greece -75%

China -72%

Croatia -71%


-50%

-65%

-75%

-92%

-72%

-100%

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

Spain Japan South Korea Italy China

Week of the 10th of Feb Week of the 17th of Feb Week of the 24th of Feb Week of the 2nd of March Week of the 9th of March

Those countries with quarantines see steepest declinesOccupancy % chg, Weeks commencing the 10th, 17th, 24th of Feb and 2nd, 9th of March 2020

24


On 11 March COVID-19 now a pandemicWorld now taking extreme actions to contain or delay


Recovery could be sharp – if similar to SARS….China Hotel Occupancy March-November 2003

0%

20%

40%

60%

80%

100%

Mar-03 Apr May Jun Jul Aug Sep Oct Nov

Beijing Hong Kong SAR Shanghai Guangdong Chengdu & Chongqing

6 months5 July 2003

World Health Organisation announced SARS contained

13 June 2003Travel restrictions start

easing across APAC

12 March 2003World Health Organisation

issues a global alert on SARS

3 months


0%

20%

40%

60%

80%

100%

Mar Apr May Jun Jul Aug Sep Oct Nov

Bangkok Hanoi Ho Chi Minh City Incheon & Seoul Phuket Singapore Tokyo

but declines during SARS were not as severe…APAC, March-December 2003 Occupancy

6 months5 July 2003World Health Organisation announced SARS contained

13 June 2003Travel restrictions start

easing across APAC

12 March 2003World Health Organisation

issues a global alert on SARS

3 months

Latin America

28Photo by Adrian Dascal on Unsplash

https://unsplash.com/@dascal?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyTexthttps://unsplash.com/s/photos/latin-america?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText


-8%

-4%

0%

4%

8%

12%

2012 2013 2014 2015 2016 2017 2018 2019

Supply % Change Demand % Change RevPAR % Change

RevPAR reaches it highest point in 10 yearsSouth America (excl. Venezuela) CC, USD

29


Cartagena8

Pacific region on declined during 2019RevPAR % Change, Local Currency, Full Year 2019

Quito

Lima -10Manaus

BrasiliaCusco -2

Santiago

Bogota5

Rosario59

Sao PauloRio de Janeiro27

Buenos Aires49

-217

-7 Montevideo10


Cartagena-3

A sea of Red due to FX, only Brazil afloatRevPAR % Change, USD, Full Year 2019

Quito

Lima -11Manaus

BrasiliaCusco -4

Santiago

Bogota-6

Rosario-9

Sao PauloRio de Janeiro16

Buenos Aires-10

-29

-15 Montevideo-5


China outbound travel to LATAMInternational arrivals from China % ch in 2019

32

Chart1

WorldWorld

MexicoMexico

ArgentinaArgentina

BrazilBrazil

ColombiaColombia

PeruPeru

Int'Arrivals %

Arrivals from China%

3.6

2.5

6.125948

7.517164

7.880824

10.78201

0.4399288

2.787174

3.662712

5.268974

2.548508

4.654476

Sheet1

Int'Arrivals %Arrivals from China%

World3.62.5

Mexico6.17.5

Argentina7.910.8

Brazil0.42.8

Colombia3.75.3

Peru2.54.7

Asia3.62.2

Australia & Oceania1.90.9

Paste Below Tab 2

MarketsDateRooms Supply YTD PCRooms Demand YTD PC

Central America2019121.054451011-1.5761444431

South America2019121.37704061323.1774148346

Australia & Oceania2019121.87999972260.9438298761

Europe2019121.3935355271.8036087422

Middle East2019125.81602277838.2271810586

Paste Below Tab 3

Collapsed SubcontinentsDateRooms Supply YTD PCRooms Demand YTD PC

Americas2019122.0808986991.894120322

Asia Pacific2019123.5573178222.189892385

Middle East & Africa2019121.1185711092.181019908

Americas = NA and Caribbean, Asia Pacific = APAC excl Austr&Ocean ; MEA = Africa!!!!!!


Central and South America – Pre and Post Virus Comparison2020, Constant Currency USD

Occupancy

54%+1.5%

ADR

$96+7.7%

RevPAR

$51+9.3%

Occupancy

58%-4.2%

ADR

$93+4.2%

RevPAR

$54-0.2%

1st to 19th of Jan

20th of Jan to 15th of Mar


-30%

-11%

-28% -28%

-40%-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Argentina Brazil Chile Costa Rica Panama


Most impacted Countries in LATAM by COVID-19Occupancy % chg., Weeks commencing the 10th, 17th, 24th of Feb and 2nd, 9th of March 2020

34


-21%

-36% -36%

-23%

-29%

-40%

-30%

-20%

-10%

0%

10%

20%

Colombia Ecuador El Salvador Guatemala Honduras


Countries severely impacted by COVID-19Occupancy % chg., Weeks commencing the 10th, 17th, 24th of Feb and 2nd, 9th of March 2020

35


-31%-34%

-11%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Nicaragua Peru Uruguay


Countries severely impacted by COVID-19Occupancy % chg., Weeks commencing the 10th, 17th, 24th of Feb and 2nd, 9th of March 2020

36


-100%

-50%

0%

50%

100%

150%

200%

Bogota Buenos Aires Lima Medellin Quito Rio de Janeiro Santiago Sao Paulo

LATAM gateway cities - All Occupancies affectedOccupancy % change, February 24th to March 15th 2020


23.9

2.5

3.5

-50%

-30%

-10%

10%

30%

50%

70%

90%

Bogota Buenos Aires Lima Medellin Quito Rio de Janeiro Santiago Sao Paulo

BA

RJ

LIM

Buenos Aires, Rio de Janeiro, and Lima still growing rateADR % change, Local Currency, February 24th to March 15th 2020


-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

1-Ja

n

3-Ja

n

5-Ja

n

7-Ja

n

9-Ja

n

11-Ja

n

13-Ja

n

15-Ja

n

17-Ja

n

19-Ja

n

21-Ja

n

23-Ja

n

25-Ja

n

27-Ja

n

29-Ja

n

31-Ja

n

2-Fe

b

4-Fe

b

6-Fe

b

8-Fe

b

10-F

eb

12-F

eb

14-F

eb

16-F

eb

18-F

eb

20-F

eb

22-F

eb

24-F

eb

26-F

eb

28-F

eb

1-M

ar

3-M

ar

5-M

ar

7-M

ar

9-M

ar

11-M

ar

13-M

ar

15-M

ar

Santiago: Difficult 2020 for the Chilean capital since protests Occupancy growth by day in 2020 till March 15th

39


-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

1-Ja

n

3-Ja

n

5-Ja

n

7-Ja

n

9-Ja

n

11-Ja

n

13-Ja

n

15-Ja

n

17-Ja

n

19-Ja

n

21-Ja

n

23-Ja

n

25-Ja

n

27-Ja

n

29-Ja

n

31-Ja

n

2-Fe

b

4-Fe

b

6-Fe

b

8-Fe

b

10-F

eb

12-F

eb

14-F

eb

16-F

eb

18-F

eb

20-F

eb

22-F

eb

24-F

eb

26-F

eb

28-F

eb

1-M

ar

3-M

ar

5-M

ar

7-M

ar

9-M

ar

11-M

ar

13-M

ar

15-M

ar

Buenos Aires occupancy tipped on Feb 16Occupancy growth by day in 2020 till March 15th

40


-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

1-Ja

n

3-Ja

n

5-Ja

n

7-Ja

n

9-Ja

n

11-Ja

n

13-Ja

n

15-Ja

n

17-Ja

n

19-Ja

n

21-Ja

n

23-Ja

n

25-Ja

n

27-Ja

n

29-Ja

n

31-Ja

n

2-Fe

b

4-Fe

b

6-Fe

b

8-Fe

b

10-F

eb

12-F

eb

14-F

eb

16-F

eb

18-F

eb

20-F

eb

22-F

eb

24-F

eb

26-F

eb

28-F

eb

1-M

ar

3-M

ar

5-M

ar

7-M

ar

9-M

ar

11-M

ar

13-M

ar

15-M

ar

Lima occupancy tipped on Feb 24Occupancy growth by day in 2020 till March 15th

41


-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

1-Ja

n

3-Ja

n

5-Ja

n

7-Ja

n

9-Ja

n

11-Ja

n

13-Ja

n

15-Ja

n

17-Ja

n

19-Ja

n

21-Ja

n

23-Ja

n

25-Ja

n

27-Ja

n

29-Ja

n

31-Ja

n

2-Fe

b

4-Fe

b

6-Fe

b

8-Fe

b

10-F

eb

12-F

eb

14-F

eb

16-F

eb

18-F

eb

20-F

eb

22-F

eb

24-F

eb

26-F

eb

28-F

eb

1-M

ar

3-M

ar

5-M

ar

7-M

ar

9-M

ar

11-M

ar

13-M

ar

15-M

ar

Bogota occupancy tipped on March 5Occupancy growth by day in 2020 till March 15th

42

ANATO


-30%-20%-10%

0%10%20%30%40%50%60%70%

Bogota Buenos Aires Lima Santiago

ADR analysis: Santiago, Bogota rate in declineADR % change, Local Currency, February 24th to March 15th 2020

Buenos Aires

LimaSantiagoBogota


-20.0

-50.7-60%

-40%

-20%

0%

20%

40%

60%

Cancun Caribbean Cartagena Costa Rica Regional Cusco

LATAM tourism destinations- All affectedOccupancy % change, February 24th to March 15th 2020


1%

-6%

-23% -25% -25%-27%

-40%

Cozumel/IslaMujeres/Riviera Maya

Area

Rio de Janeiro Puerto Rico Aruba Curacao Cartagena Panama

Week of the 9th of March

Cruise Port Hotel Performance SuffersOccupancy % Chg., Week starting the 9th of March -15th March

45


Conclusiones


Conclusiones

1. Coronavirus ha impactado nuestra industria significativamente– China y sus mercados receptors ya están gravemente afectados– Pero ya no es solo un problema de China…la realidad y el riesgo han cambiado el comportamiento– Europa y Oriente Medio ven el impacto de la reducción de viajes– Latinoamérica no se queda atrás y siente sus efectos

2. La Historia nos dice que el rebote podría ser fuerte… pero– SARS no es directamente comparable, sino un indicativo– La importancia creciente de China, la cautela de los consumidores y la propagación del virus podrían

significar una recuperación más lenta …– … y el virus se ha convertido en una pandemia

3. Qué puede hacer?– Garantizar acciones operativas apropiadas para reducir el riesgo– No entre en pánico - use datos - compare los resultados día a día , no con el año pasado– Recuerde que se trata de vidas, no de números


Follow our updates from www.str.com

48

http://www.str.com/

Source: 2020 STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Realty Information, Inc. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. The information in the presentation should not be construed as investment, tax, accounting or legal advice.

Preguntas y sugerenciasContacte STR Latam [email protected]

Impact of COVID-19�on hotel performanceAgendaSlide Number 3#1 This is about lives, not numbers#2 Unprecedented challenge#3 We at STR can never give guidance on priceSlide Number 7Supply now outpacing demand growth in regions around the worldImpacting performance with RevPAR down or slowing Slide Number 10Slide Number 11China drops Occ by 89% within 2 weeksChina Key Markets Hotels PerformancePredicaments and Solutions around China Hospitality IndustrySlide Number 15 Reliance on outbound China tourism has increased significantlySlide Number 17Global events either cancelled or postponed from mid-FebSlide Number 19Corporate have reacted well in advance of government adviceAirlines started now significantly cutting capacitySlide Number 22Occupancy losses increase rapidlyThose countries with quarantines see steepest declinesOn 11 March COVID-19 now a pandemicRecovery could be sharp – if similar to SARS…. but declines during SARS were not as severe…Slide Number 28RevPAR reaches it highest point in 10 yearsPacific region on declined during 2019A sea of Red due to FX, only Brazil afloatChina outbound travel to LATAMCentral and South America – Pre and Post Virus Comparison Most impacted Countries in LATAM by COVID-19Countries severely impacted by COVID-19Countries severely impacted by COVID-19LATAM gateway cities - All Occupancies affectedBuenos Aires, Rio de Janeiro, and Lima still growing rateSantiago: Difficult 2020 for the Chilean capital since protests Buenos Aires occupancy tipped on Feb 16Lima occupancy tipped on Feb 24Bogota occupancy tipped on March 5ADR analysis: Santiago, Bogota rate in declineLATAM tourism destinations- All affectedCruise Port Hotel Performance SuffersSlide Number 46ConclusionesFollow our updates from www.str.com Preguntas y sugerencias

impact of covid-19 on hotel performance2020/03/24 · source: 2020 str, llc / str global, ltd....

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