master template - workforce partners · title: master template author: jan d freitag, svp, str...
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© 2016 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.
U.S. Hotel Industry Performance
Jan D. FreitagSenior Vice President
@jan_freitag
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• Total US Review
• Scale Review
• Segmentation
• Markets
• Pipeline
• 2016 / 2017 Forecast
Agenda
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www.hotelnewsnow.comData Dashboard>View All Data Presentations
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Total U.S. Review
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October Occupancy -0.3%
Two Things To Get Used To From Now On:Occupancy Declines
and
Vanityfair.com
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October 2016 YTD: Occupancy Declines Start Now
% Change
• Room Supply 1.5%
• Room Demand 1.5%
• Occupancy 67.3% -0.02%
• A.D.R. $125 3.1%
• RevPAR $84 3.0%
• Room Revenue 4.6%
October 2016 YTD, Total US Results
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US October YTD 2016 RevPAR: 3 Markets Dragged US Results
Total US YTD: +3.2%NYC: - 2.9%Miami: - 3.3%Houston: -10.9%
Total US excluding NYC, Miami & Houston: +3.8%
*RevPAR % Change October 2016 YTD
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Demand Growth Slows. Supply Growth Increases To 1.5%.
-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 – 10/2016
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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
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RevPAR Growth: Slowing Down After 6 Yrs. Of Growth
-25
-20
-15
-10
-5
0
5
10
15
1990 2000 2010
Total U.S., RevPAR % Change, 1/1990 – 10/2016
56 Months 80 Months80 Months 31 Mo
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Chain Scale Review
- October YTD -
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(Only) In This Part Of The Cycle: Independents Outperform Brands
-0.6 -0.3 -0.6-0.2 -0.4 -0.6
0.61.5
2.22.8 2.6 2.6
3.5
3.7
Luxury UpperUpscale
Upscale UpperMidscale
Midscale Economy Independents
ADR % Change
Occupancy % Change
*RevPAR % Change by Contribution of OCC / ADR % Change, by Scale, October 2016 YTD
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High End Hotels Still Very Busy (But A Little Less So)
76.1 75.9 75.7
69.5
61.259.4
64.0
76.5 76.2 76.2
69.6
61.459.7
63.7
Luxury UpperUpscale
Upscale UpperMidscale
Midscale Economy Independents
2016 2015
*OCC %, by Scale, October YTD 2016 & 2015
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Segmentation
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Transient ADR Growth: Slow Despite High Occupancy
1.5%
0%
1%
2%
3%
4%
5%
6%
2013 2014 2015 2016
Demand % Change
ADR % Change
*Transient Demand and ADR % Change, 12 MMA, 1/2013 – 10/2016
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No Group Demand Growth To Speak Of
0.2%
-2%
-1%
1%
2%
3%
4%
5%
6%
2013 2014 2015 2016
Demand % Change
ADR % Change
*Group Demand and ADR % Change, 12 MMA, 1/2013 – 10/2016
Jewish Holiday Shift
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Markets
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October 2016 : New Supply Hits NYC, Houston, Miami.
Market OCC % ADR % Change
Los Angeles/Long Beach, CA 83.2 8.9
Nashville, TN 76.8 6.0
Atlanta, GA 71.8 5.9
Denver, CO 76.8 5.9
Tampa/St Petersburg, FL 73.1 5.9
Chicago, IL 71.0 0.9
New Orleans, LA 70.3 0.2
Miami/Hialeah, FL 76.5 -2.0
Houston, TX 63.9 -3.2
New York, NY 85.5 -3.7
* October 2016 YTD ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets
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NYC
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-4.1 -4.3
-2.4
-6.5
3.2
-4.5 -4.9 -4.0
-1.5 -1.7
-3.7
-7.5
Nov Dec Jan Feb Mar Apr May Jun July Aug Sept Oct
NYC Monthly RevPAR % Change: All Bad, All The Time
* NYC RevPAR % Change, by Month, 11/2015 – 10/2016
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NYC: No Pricing Power Anywhere
Scales OCC % Occ % Change ADR ADR % Change RevPAR % Change
Luxury 80.7 -2.3 $440 -3.2 -5.5
Upper Upscale 86.8 -1.1 $273 -3.6 -4.7
Upscale 90.1 -0.5 $231 -3.2 -3.7
Upper Midscale 87.1 2.9 $185 -1.8 1.1
Midscale 84.9 0.9 $154 -2.4 -1.6
Independents 84.1 0.9 $246 -2.7 -1.9
* NYC , Chain Scale KPIIs, 12 MMA October 2016
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Pipeline
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US Pipeline: We will Look Back At This Moment And Realize This Is When Overbuilding Happened
Phase 2016 2015 % Change
In Construction 183 138 33%
Final Planning 192 175 10%
Planning 178 141 27%
Under Contract 554 454 22%
*Total US Pipeline, by Phase, ‘000s Rooms, October 2015 and 2016
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Limited Service Construction Is The Name Of The Game
7.2
23.3
60.6 58.0
7.53.2
23.6
Luxury UpperUpscale
Upscale UpperMidscale
Midscale Economy Unaffiliated
*US Pipeline, Rooms Under Construction , ‘000s Rooms, by Scale, October 2016
65%
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Construction In Top 26 Markets: 23 With 2%+ Of Supply
*US Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, October 2016
Market Rooms U/C % Of Existing
Orlando, FL 1,183 1%
Norfolk/Virginia Beach, VA 456 1%
Oahu Island, HI 410 1%
St Louis, MO-IL 842 2%
Minneapolis/St Paul, MN-WI 915 2%
Las Vegas, NV 3,979 2%
Washington, DC-MD-VA 3,356 3%
Atlanta, GA 3,016 3%
Chicago, IL 3,827 3%
Phoenix, AZ 2,131 3%
San Francisco/San Mateo, CA 1,829 4%
San Diego, CA 2,266 4%
Detroit, MI 1,611 4%
Anaheim/Santa Ana, CA 2,381 4%
Tampa/St Petersburg, FL 1,976 4%
Boston, MA 2,608 5%
New Orleans, LA 1,909 5%
Los Angeles/Long Beach, CA 5,397 5%
Miami/Hialeah, FL 3,296 6%
Philadelphia, PA-NJ 2,870 6%
Houston, TX 5,747 7%
Dallas, TX 6,501 8%
Nashville, TN 3,267 8%
Denver, CO 4,368 10%
Seattle, WA 5,047 12%
New York, NY 16,546 15%
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Upscale Hotels:
In Search Of The Ideal Occupancy
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Upscale Hotels:Maximum GOP (47.9%) at Occupancy of 75.1%
Upscale Hotels, ADR Bucket of $120, Sliding Occ and GOP %, 2015 HOST Almanac
Peak GOP %
Occupancy %
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A Good Hotel Is A Sold Out Hotel? Not True!!!
Service
Level
Class ADR Range Maximum
GOP %
Ideal
Occupancy
Full-
serv
ice
Luxury $175 - $210 40.2% 82.4%
Upper Upscale $140 - $160 39.7% 84.6%Upscale $120 - $140 47.9% 75.1%
Lim
ite
d-
serv
ice
Upscale $120 - $140 50.3% 80.2%
Upper Midscale $80 - $100 40.5% 71.4%Midscale/Economy $40 - $60 54.2% 78.6%
Based on 2015 HOST Almanac data of 5,000+ hotels
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2016 / 2017 Forecast
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Lower International Favorability Of US Hurts Travel To US
R² = 0.1969
0
1
2
3
4
5
6
7
8
-80% -60% -40% -20% 0% 20% 40% 60%
Arrivals performance vs favorabilityPew net favorability index, 2006
Source: Tourism Economics, Pewchange in arrivals to US, 2006/2000
India
Brazil
Hong Kong
Germany
Argentina
France
S Korea
Spain
Australia
Denmark
Russia
Ireland
China
Mexico
Netherlands
Sweden
Canada
UKItaly
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Total United StatesKey Performance Indicator Outlook (% Change vs. Prior Year)2016 - 2017
Outlook
2016Forecast
2017Forecast
Supply 1.6% 2.0%
Demand 1.6% 1.6%
Occupancy 0.0% -0.3%
ADR 3.2% 3.1%
RevPAR 3.2% 2.8%
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Total United StatesChain Scale Key Performance Indicator Outlook 2016F by Chain Scale
2016 Year End Outlook
Chain ScaleOccupancy
(% chg)ADR
(% chg)RevPAR(% chg)
Luxury -0.4% 2.8% 2.3%
Upper Upscale -0.1% 3.0% 2.9%
Upscale -0.4% 3.0% 2.6%
Upper Midscale -0.1% 2.8% 2.7%
Midscale -0.3% 2.8% 2.5%
Economy -0.5% 3.3% 2.8%
Independent 0.4% 3.3% 3.6%
Total United States 0.0% 3.2% 3.2%
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Total United StatesChain Scale Key Performance Indicator Outlook 2017F by Chain Scale
2017 Year End Outlook
Chain ScaleOccupancy
(% chg)ADR
(% chg)RevPAR(% chg)
Luxury -0.3% 3.5% 3.2%
Upper Upscale -0.3% 3.4% 3.0%
Upscale -1.1% 2.7% 1.5%
Upper Midscale -0.8% 2.7% 1.9%
Midscale 0.1% 2.7% 2.8%
Economy 0.0% 2.6% 2.6%
Independent -0.4% 3.2% 2.8%
Total United States -0.3% 3.1% 2.8%
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© 2016 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.