[webinar] how to find relief in a sellers market
TRANSCRIPT
Latest STR data,
trends and forecast
Accessing destination specific market conditions with your CVB
Managing expectations and improving negotiations
Our webinar roadmap
Understanding Market Conditions of the
U.S. Hotel Industry
Lindsay Culbreath Senior Director, Business Development & Marketing
Lindsay_STR
© 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.
© 2016 STR. All Rights Reserved.
In Review
Total U.S. Performance
Group vs. Transient
Pipeline & Forecasts
OCC 65.6% ▴1.7% RECORD
Metric No. Status Remarks
ROOM REV $142B ▴7.4% RECORD
OCC ROOMS 1.2B ▴2.9% RECORD
AVAIL ROOMS 1.8B ▴1.1% RECORD
ADR $120 ▴4.4% RECORD
REVPAR $79 ▴6.3% RECORD
U.S. Hotels YE 2015
© 2016 STR. All Rights Reserved.
© 2016 STR. All Rights Reserved.
Supply Growth Now Back Over 1%. Demand Growth Slows.
-0.8
-4.7
-7.1
7.7
2.6
-8
-4
0
4
8
1990 1993 1996 1999 2002 2005 2008 2011 2014
Supply % Change
Demand % Change
1.2
2.9 4.0
Total U.S. – Supply & Demand % Change 12 MMA, January 1990 to January 2016
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2 Million More Rooms Available Per Month
1.1 1.1
1.4 1.5 1.4
1.6 1.7
1.6 1.8
1.9 2.0
2.2
January February March April May June July August September October November December
U.S. Supply Change (millions of room nights) 2015 by Month
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ADR Growth Steady. Occ Growth Decelerating Rapidly.
-3.4
-6.7
-9.7
1.4
6.8 7.5
4.3
-10
-5
0
5
1990 1993 1996 1999 2002 2005 2008 2011 2014
Occ % Change
ADR % Change
Total U.S. – ADR & Occ % Change 12 MMA, January 1990 to January 2016
RevPAR Growth: It’s Going To Be OK (but Not Great)
-25
-20
-15
-10
-5
0
5
10
15
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
RevPAR % Change January 1990 to January 2016
56 Months 71 Months 80 Months 31 Mo
Scales RevPAR Composition: ADR Driven
0.4 0.6 0.6
2.1 1.6 1.6
3.7 3.9
4.8
4.3
4.2 3.9
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
ADR % Change
Occupancy % Change
4.5
5.4
6.4
5.8 5.5
RevPAR % Change by Contribution of Occ / ADR % Change, by Scale 12 MMA January 2016
4.1
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+9.4%
Anaheim, CA
Top 5 / Bottom 2 – RevPAR Growth Markets Full Year 2015
Phoenix, AZ Dallas, TX
Houston, TX
Tampa, FL
Nashville, TN
New York, NY
+12.8%
+10.0%
-3.3%
+11.1%
+13.8%
-1.7%
4 Markets with Double Digit RevPAR Growth
Transient ADR Growth Subsides Despite High Occupancies
0%
1%
2%
3%
4%
5%
6%
2012 2013 2014 2015 2016
Demand % Change ADR % Change
5.9%
2.5%
Transient Demand and ADR % Change 12 MMA, January 2012 – January 2016 NOTE: Data is for upper tier hotels only (Luxury & Upper Upscale classes)
5.4%
3.7%
Group Demand Growth Slows Rapidly
-2%
-1%
1%
2%
3%
4%
5%
6%
2012 2013 2014 2015 2016
Demand % Change
ADR % Change
3.8%
1.9%
Group Demand and ADR % Change 12 MMA, January 2012 – January 2016 NOTE: Data is for upper tier hotels only (Luxury & Upper Upscale classes)
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13.5
9.5 9.2 8.5 8.1 8.1 7.4 6.5 6.4 6.2 5.9
5.2 4.7 4.4 4.3 3.7 3.5 2.9 1.3 1.3 0.9
-0.1 -0.3
-5.5 -5.5
Group RevPAR % Change, Top 25 Markets Full Year 2015
Group RevPAR Declines in 4 Markets
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Meeting Requirements Considerations Rated “Very Important” in Site Selection
Meeting planners are more demanding than ever in site selection
50% 60% 70% 80% 90% 100%
Clean/attractive city
Attractive conference hotels
# of hotel rooms available
Convenient airline service
Easy for delegates to get to
Food and lodging costs
Travel costs to destination
Good value for the money
2015
2013
COSTS
CONVENIENCE
CLEAN/ ATTRACTIVE
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What Impact do Events Have on your Destination?
Source: STR Compression Analysis
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Phase February 2016 February 2015 Difference % Change
In Construction 150,406 128,874 21,532 16.7
Final Planning 185,607 152,216 29,391 18.8
Planning 161,396 150,428 10,968 7.3
Under Contract Pipeline
497,409 435,518 61,891 14.2
U.S. Pipeline, by Phase (Rooms) February 2016 vs 2015
Construction Today Will Impact 2016 / 2017
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7.7
12.9
50.9 50.3
5.7
1.5
20.5
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated
U.S. Pipeline – Rooms Under Construction, ‘000s Rooms, by Scale January 2016
68%
Limited Service Construction Has Been Strong For 2 Years
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Construction In Top 26 Markets: 20 With 2%+ Of Supply
U.S. Pipeline – Top 26 Markets, U/C Rooms as % of Existing Supply January 2016
Market Rooms U/C % Of Existing
New York, NY 14,544 12.30%
Miami/Hialeah, FL 3,896 7.50%
Houston, TX 5,553 6.90% Seattle, WA 2,872 6.70%
Denver, CO 2,756 6.30%
Minneapolis/St Paul, MN-WI 2,487 6.30%
Nashville, TN 2,163 5.60%
Philadelphia, PA-NJ 2,443 5.30% Dallas, TX 4,278 5.30%
Los Angeles/Long Beach, CA 4,630 4.70%
Anaheim/Santa Ana, CA 2,478 4.40%
Boston, MA 1,980 3.80%
San Diego, CA 1,951 3.20%
Washington, DC-MD-VA 3,339 3.10%
Chicago, IL 3,302 3.00%
Detroit, MI 1,264 3.00%
Tampa/St Petersburg, FL 1,343 3.00%
Phoenix, AZ 1,536 2.50%
Las Vegas, NV 3,905 2.30%
Orlando, FL 2,454 2.00%
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Total U.S. – Key Performance Indicator Outlook (% Change vs. Prior Year) 2016 - 2017
Outlook
2016 Forecast
2017 Forecast
Supply 1.7% 1.9%
Demand 2.3% 2.1%
Occupancy 0.6% 0.2%
ADR 4.4% 4.3%
RevPAR 5.0% 4.5%
Robust RevPAR Growth Still Ahead
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Take-Aways
Record levels of supply & more on the way
Growth rates are slowing
Cautiously optimistic
Stay informed!
© 2016 STR. All Rights Reserved.
Establish Your Research Foundation
1 • Contact STR’s Business Development Team:
[email protected] or +1 (615) 824 8664 ext 3504
2
• Determine questions you’re trying to answer
• Rate negotiations
• New supply in the market
3
• We’ll help match STR’s products to meet your needs
• Trends, Market Pipeline, Forecasts, etc.
Thank You!
© 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.
Lindsay Culbreath
Senior Director, Business Development & Marketing
Lindsay_STR
www.linkedin.com/in/LindsayCulbreath
7 Types of Consultative Advice
to Seek From Your CVB
1) Perspective
2) Expertise and Specialized Knowledge
3) Best Practices and Proven Methodology
4) Strategic Mindset
5) Analytical Horsepower and Data Mining
6) Advocacy
7) Cost Savings and Extension of Staff
ANALYTICAL HORSEPOWER & DATA MINING
“In today’s market environment meeting planners must understand the economics of supply and demand in any market where they are trying to book a meeting. In YE 2015 city wide occupancies in the top 25 markets in the U.S. ranged from a low of 57% to a high of over 85%. The local destination marketing organization can be the best source for planner who wants to understand the general seasonality and/or day of the week demand trends in any market. Knowing when there are large patterns of availability – or not - for hotel rooms, can help the planner better manage and negotiate their terms and costs associated with a meeting.”
Robert A. Gilbert, CHME, CHBA President & CEO Hospitality Sales & Marketing Association International
Most Desirable Arrival and Departure Patterns
Major Local
Events
Cancellations and Special Offers
Seasonality: Peak, Shoulder and Need
Transient Demand
City-wides
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