lodging industry update 2014 hospitality asset managers association fall conference scott d. berman...
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Lodging Industry Update
2014 Hospitality Asset Managers Association Fall ConferenceScott D. BermanU.S. Industry Leader, Hospitality & Leisure
September 17, 2014
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PwC 2
Agenda
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PwC
U.S. Economic Performance
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Sources: Macroeconomic Advisers, PwC
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PwC
1.1%
Lodging Supply and Demand Growth in the U.S.
4
Average Lodging Demand Outpaces Lodging Supply
Sources: STR; Bureau of Economic Analysis; Bureau of Labor Statistics; Macroeconomic Advisers, LLC, PwC
1.8%
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PwC
Lodging PerformanceU.S. Top 25 Markets vs All Other U.S. Markets
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Percentage Change in RevPARFY14 RevPAR growth is narrowing between the top 25
markets and all other U.S. markets.
Source: STR
2.1%
0.5%
2.0%
1.8%
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PwC
Lodging Performance“Hottest” Top 25 Markets in FY14
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Percentage Change in RevPAR
Source: STR
Nashville
San Francisco
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PwC
Lodging Performance
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Luxury and Upper Upscale Room Rate Leaders
Source: STR
$223
$244
$272
$282
$314
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PwC
PwC U.S. Lodging Outlook
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2014Demand
Supply
Occupancy + ADR = RevPAR
↑ 4.0%
↑ 1.0%
↑ 3.1%
↑ 4.4%
↑ 7.6%
2015Demand
Supply
Occupancy + ADR = RevPAR
↑ 2.7%
↑ 1.6%
↑ 1.1%
↑5.7%
↑ 6.9%
Source: PwC Hospitality Directions U.S., August 2014
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PwC
A Focus on Greater Miami & the Beaches
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Miami Lodging Performance
Source: STR
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PwC
Recent Miami Hotel Transactions
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Soho Beach House
March 2014
Value: $81.5 Million $/Key: $1.6 Million Seller: WP Carey (REIT) Buyer: N/A Rooms: 50 Source: RCA
St. Regis Bal Harbour
January 2014
Value: $213 Million $/Key: $1 Million Seller: Starwood Buyer: Al Faisal Rooms: 207 Source: RCA
Raleigh Hotel
April 2014
Value: $69.3 Million $/Key: $561 K Seller: sbe Hotels Buyer: The Raleigh Group Rooms: 105 Source: RCA
Casa Moderna
January 2014
Value: $37.5 Million $/Key: $670 K Seller: Africa Israel IG Buyer: CGI Merchant Group Rooms: 56 Source: RCA
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PwC
New Brands Emerging in Greater Miami & the Beaches
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Sources: Marriott International, Hotel-Online, Lodging Magazine, Miami Herald, Hospitality Net, Travel Weekly
Latin American/Spanish
Asian
Domestic
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PwC
Rise of the Sharing Economy
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Sources: Uber, New York Times, Miami Herald, NBC News, Local 10 (ABC)
Founded in 2009Represented in 37 countries and 70+ citiesValued at $18.2B
Founded in 2012Represented in 64 markets in the U.S.Valued at $700 M
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PwC
Activism in the IndustryKey Issues
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Sources: Airbnb, FlipKey, HomeAway, American Hotel & Lodging Association, TravelClick, Forbes
Short-Term Online Rentals
Online Travel Agencies
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PwC
Activism in the IndustryKey Issues
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Sources: American Hotel & Lodging Association, CNN Money, Businessweek, Chicago Tribune
Labor
Living Wage Battles
•Recent Approvals:- Seattle: $15.00 by 2017, passed in June 2014- San Diego: $11.50 by 2017, passed in August 2014
•Proposed Increases:- Los Angeles: $15.37 by 2017- Chicago: $13.00 by 2018
NLRB – Joint Employer Decision
What are the implications for the hotel industry?
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PwC
Activism in the IndustryAdditional Issues
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Source: American Hotel & Lodging Association
American Hotel & Lodging Association 2014 Policy Agenda
•Improving employer access to a seasonal workforce
•Altering the Affordable Care Act
•Ensuring new federal tax proposals are pro-business
•Supporting growth in foreign visitors through programs such as Jobs Originating through Launching Travel
•Stifling patent assertion entities and their related lawsuits
•Extending the Terrorism Risk Insurance program
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PwC
PwC Megatrends
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“A pattern or movement which has a major impact on business or society as a whole.” PwC groups them into five megatrends:
1.Demographic Shifts
2.Shift in Economic Power
3.Accelerating Urbanization
4.Climate Change and Resource Scarcity
5.Technological Breakthroughs
Source: PwC
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PwC
PwC Megatrends1. Demographic Shifts
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Sources: UN Population Division, World Population Prospects, 2 FT, Oxfam, ‘The World’s Women,’ UN, PwC Talent Mobility 2020 and Beyond
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PwC
PwC Megatrends2. Shift in Economic Power
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Sources: OECD, UNESCO, Chinese National Bureau of Statistics, NASSCOM, UNCTAD, The Economist, IMF, World Economic Outlook, PwC
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PwC
PwC Megatrends3. Accelerating Urbanization
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Sources: New York Times, Brookings Institution, The Future Build, UN Habitat, United Nations, UN Department of Economic and Social Affairs, PwC
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PwC
PwC Megatrends4. Climate Change and Resource Scarcity
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Sources: National Intelligence Council, M. Pidwirny, BP Statistical Review of World Energy, Intergovernmental Panel on Climate Change,IEA, Carbon Tracker, Hellar and Keoleian, PwC
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PwC
PwC Megatrends5. Technological Breakthroughs
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Sources: Experian, Cisco Internet Business Solutions Group, Forbes, C. Frey and M. Osborne, Nike, IDC, MIT Technology Review, Facebook, UN Population Division, World Population Prospects, PwC
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PwC
PwC Megatrends
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Something for All of Us to Think About – Implications on the Hospitality Industry
•Increasingly dynamic and segregated customers
•Rising operating costs
•Emergence of new, technology-driven competition, opportunities, and resources
Source: PwC
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PwC 23
“Where are we now and where are we headed?”
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PwC
PwC demonstrates its capabilities with sector-specific thought leadership
• Hospitality Directions – U.S.
• Hospitality Directions – Europe
•Manhattan Lodging Index
• Five Megatrends and Possible Implications
• Experience Radar 2012 - Consumer Insight for the US Hospitality Industry
• Convention and Congress Center Annual Report
• Global Gaming Outlook
• Global Sports Market Outlook
• South African Hospitality Outlook
• Emerging Trends in Real Estate®
• PwC Real Estate Investor Survey
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PwC
pwc.com
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