17 th Annual Lodging Industry Update Year End 2014

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1 17 th Annual Lodging Industry Update Year End 2014 Pinkowski & Company Metropolitan Memphis Hotel & Lodging Association HotelNewsNow.com STR February 13, 2015 Memphis, Tennessee

2 17 th Annual Lodging Industry Update Introductions Mary Calorio President MMH&LA General Manager Heartbreak Hotel

3 Lodging Industry Update Program Introduction Mary Calorio Chuck Pinkowski Regional Economic Update Martha Perine-Beard St. Louis Federal Reserve Trends Presentation Chuck Pinkowski Pinkowski & Company Jeff Higley HotelNewsNow.com Keynote Speaker Greg Marcus Marcus Hotels & Resorts

4 17 th Annual Lodging Industry Update Presented by:

5 Thank You to Our Sponsors

6 The National Real Estate and Finance Conference Designed for Hotel Owners Seize The Day March 25-27, 2015 Marriott Marquis Atlanta

7 Regional Economic Update Martha Perine - Beard Regional Executive St. Louis Federal Reserve Bank Memphis Branch

8 Lodging Industry Outlook Local Markets Chuck Pinkowski National & Regional Jeff Higley

9 Data Provided by

10 So How Was 2014? STR Says Smiles All Around and We Agree

11 Chuck Pinkowski Pinkowski & Company

13 Continuing the Positive Trend A Record Breaking Year What Is On The Horizon For 2015 & Beyond p 2016p 1.9% 12.7% 7.1% 4.0% % RevPAR Change

14 P&C Forecast vs Actual 2014 Definitely Not An Exact Science Forecast Actual Occ 61.0% (1.5%) 64.9% (8.2%) ADR $82.96 (2.8%) $84.18 (4.2%) RevPAR $50.61 (4.4%) $54.64 (12.7%)

15 How good was 2014 vs 2013 Every Day 1,115 more rooms sold Revenue up $139,306 For the Year 406,996 more rooms sold $50,846,615 more in revenue Most Rooms Ever Sold Room Supply below 2010 level (8,157,316 vs. 8,381,013) Revenue Highest on Record ADR Now $0.03 above 2007 peak

16 Key Statistics YE 2014 YE 2013 % Change Room Supply (Daily) 22,349 22, % Room Demand (Daily) 14,507 13, % Room Revenue (Daily) $1,221,225 $1, % Occupancy 64.9% 60.0% 8.2% ADR $84.18 $ % RevPAR $54.64 $ %

17 Change in Room Night Demand

18 Change in Room Night Demand

19 Key Statistics YE 2014 YE 2008 % Change Room Supply (Daily) 22,349 21, % Room Demand (Daily) 14,507 12, % Room Revenue (Daily) $1,221,225 $1,018, % Occupancy 64.9% 56.4% 15.1% ADR $84.18 $ % RevPAR $54.64 $ %

20 vs Total U.S. % Change 2014 vs 2013 Memphis U.S. Room Supply 0.1% 0.9% Room Demand 8.3% 4.5% Room Revenue 12.9% 9.2% Occupancy 8.2% 3.6% ADR 4.2% 4.6% RevPAR 12.7% 8.3%

21 Memphis Comparison Occ ADR RevPAR Change in Supply Change in Demand Memphis 64.9% $84.18 $ % 8.3% U.S. 64.4% $ $ % 4.5% East South Central 59.1% $86.35 $ % 4.5% Top % $ $ % 4.9% All Other Markets 60.7% $ $ % 4.3%

22 % Change Key Indicators

23 Average Rate $85.00 $83.00 $81.00 $79.00 $77.00 $75.00 $73.00 $71.00 $69.00 $67.00 $65.00 $84.15 $84.18 $81.91 $80.79 $78.83 $78.56 $76.20 $75.24 $75.45 $

24 ADR 12 Month Moving AVG $74.81

25 Occupancy

26 63.4% Memphis Lodging Market Occupancy 12 Month Moving AVG

27 $54 RevPAR $54.64 $52 $51.03 $50 $48 $48.30 $47.46 $47.58 $48.48 $46 $44 $43.86 $43.83 $42 $41.54 $42.16 $

28 RevPAR 12 Month Moving AVG $57 $55 $54.64 $53 $51 $49 $47 $45 $43 $51.09 $13.19 $41 $39 $

29 RevPAR Growth % Change 22 months 22 months 14 months+

30 ADR Comparison

31 ADR Comparison YE2014 vs 7 YR Avg

32 Occupancy Comparison

33 Occ Trend 2014 vs 7 YR Avg

34 Average Daily Change - Supply/Demand

35 Supply & Demand % Change

36 ADR & Demand % Change

37 ADR & Occ % Change

38 Rooms Available/Rooms Sold 12 month moving average 8,500,000 8,000,000 7,500,000 7,000,000 Supply Peak 8,391,645 April ,500,000 6,000,000 5,500,000 5,000,000 Least rooms sold 4,275,206 9/2009 Most room sold 12/2014 5,295,146 4,500,000 4,000,000 avail sold

39 12 Month Moving Avg Revenue % % %

40 Day of Week

41 Day of Week Comparison Occ

42 Day of Week Comparison ADR

43 Day of Week Comparison RevPAR

44 Day of Week - Occupancy

45 Day of Week - ADR

46 Monthly

47 Geographic Regions

48 Year End 2014 by Geographic Region ADR Occ RevPAR # Rooms # Properties West Memphis $ % $ , Poplar/East $ % $ , East/I-40 $ % $ , Airport/South $ % $ , Downtown/Midtown $ % $ , Mississippi $ % $ , Millington/North/Other $ % $ , Citywide $ % $ ,

49 % Change Region Occ ADR RevPAR Room Revenue Room Avail Room Sold Dtwn/Mid 7.4% 2.0% 9.5% 9.5% 0.0% 7.4% Airport/South 6.4% 2.9% 9.5% 9.4% 0.0% 6.4% Poplar/East 6.4% 6.4% 13.2% 12.9% -0.3% 6.1% East/I % 6.1% 14.9% 14.2% -0.6% 7.6% Mississippi 8.9% 6.3% 15.7% 18.8% 2.6% 11.7% West Mphs 15.5% 0.2% 15.7% 15.7% 0.0% 15.5% North/Other 16.9% 6.9% 25.0% 24.8% -0.2% 16.8%

50 Change in Room Night Demand

51 # Rooms Occ ADR RevPAR # Properties # Rooms Less than % $65.71 $ , % $80.43 $ , % $ $ , n/a n/a n/a 3 1, n/a n/a n/a mcvb

52 % Change # Rooms Occ ADR RevPAR Room Revenue Room Avail Room Sold Less than % 5.1% 17.0% 16.9% -0.1% 11.2% % 6.1% 14.0% 14.3% 0.3% 7.8% % 3.6% 10.5% 10.5% -0.1% 6.6% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a mcvb

53 RevPAR 2014 vs 2007

54 ADR/Occ % Change 2014 vs 2013

55 Supply/Demand % Change 2014 vs 2013

56 Geographic Demand Growth Room Nights Sold % Change Downtown 858, , % West Memphis 266, , % Poplar/East 1,115,253 1,361, % East/I , , % Mississippi 546, , % Airport/South 866, , % Millington/North 133, , Total 4,416,166 5,295, %

57 Geographic Occ Trend

58 Geographic ADR Trend

59 RevPAR Composition % Change by Contribution 25 ADR Occ Citywide Dtwn/Mid Poplar/East Airport/South I 40/South Mississippi West Mphs Millington North

60 ADR Trend Comparison Memphis/U.S. $115 $ % 18.3% 17.8% $95 $85 0.0% 11.8% $75 $ % Memphis U.S

61 Occupancy Trend Comparison Memphis/U.S. 66.0% 64.0% 62.0% 16.9% 60.0% -12.7% 58.0% 22.2% 56.0% -16.9% 54.0% 52.0% 50.0% Memphis U.S.

62 Chain Scales

Chain Scale Brands in Memphis Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Preferred Embassy Suites Hilton Marriott Westin Courtyard Crowne Plaza Doubletree Four Points Hilton Garden

63 Chain Scale Brands in Memphis Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Preferred Embassy Suites Hilton Marriott Westin Courtyard Crowne Plaza Doubletree Four Points Hilton Garden Inn Homewood Suites Hyatt Place Residence Inn Springhill Suites Staybridge Suites Clarion Comfort Inn Comfort Suites Drury Inn Drury Inn & Suites Hampton Inn Hampton Inn Suites Holiday Inn Holiday Inn Express Holiday Inn Select Baymont Best Western Country Inn & Suites La Quinta Inn & Suites Quality Inn / Suites Ramada / Limited Sleep Inn Americas Best Value Inn Budgetel Days Inn Econo Lodge Extended Stay America Extended Stay Deluxe Homestead Knights Inn Microtel Inn Motel 6 Red Roof Inn Rodeway Inn Studio Plus Suburban Extended Stay Value Place

64 Year End 2014 by Chain Scale ADR Occ RevPAR # Rooms # Properties Luxury n/a n/a n/a n/a Upper Upscale n/a n/a n/a n/a Upper Upscale/Upscale $ % $ , Upper Midscale $ % $ , Midscale $ % $ , Economy $ % $ ,252 64

65 % Change in Demand

66 % Change in ADR

67 Chain Scales Occ & ADR % Change 2014

68 Chain Scales Supply & Demand % Change 2014

69 Chain Scale Room Demand Growth

70 16 14 RevPAR Composition % Change by Contribution ADR Occ Upper Upscale/Upscale Upper Midscale Midscale Economy

71 Downtown Memphis

72 Downtown Memphis Hotels Madison Hotel Springhill Suites Hampton Inn & Suites River Inn Westin Residence Inn Courtyard Peabody Sheraton Sleep Inn Comfort Inn Doubletree Holiday Inn Crowne Plaza

73 Downtown Memphis

74 Downtown Memphis % Change

75 Downtown Memphis Key Statistics YE 2014 YE 2013 % Change Room Supply (Daily) 2,808 2, % Room Demand (Daily) Room Revenue (Daily) 2,037 1, % $287,243 $264, % Occupancy 72.5% 68.7% 5.7% ADR $ $ % RevPAR $ $ %

76 Downtown Memphis Key Statistics YE 2014 YE 2006 % Change Room Supply (Daily) 2,808 2, % Room Demand (Daily) Room Revenue (Daily) 2,037 1, % $287,243 $222, % Occupancy 72.5% 70.5% 2.8% ADR $ $ % RevPAR $ $ %

77 CVB Competitive Cities Occ ADR RevPAR Birmingham 59.7% $82.25 $49.08 Little Rock 56.5% $78.07 $44.08 Tampa/St Pete 68.0% $ $72.33 Atlanta 68.2% $91.85 $62.66 Louisville 63.8% $97.98 $62.49 New Orleans 69.0% $ $99.90 Charlotte 68.9% $93.31 $64.28 Knoxville 55.6% $79.85 $44.43 Memphis 64.9% $84.18 $54.64 Nashville 72.1% $ $84.20 Chattanooga 59.4% $80.64 $47.94 mcvb

78 Competitive Cities % Change 2014 vs 2013 Occ ADR RevPAR Demand Birmingham 4.2% 2.9% 7.3% 4.2% Little Rock 1.3% 2.4% 3.7% 3.3% Tampa/St Pete 5.8% 5.8% 12.0% 6.7% Atlanta 8.1% 4.7% 13.1% 8.1% Louisville 5.0% 3.5% 8.7% 4.8% New Orleans 3.2% 1.3% 4.6% 4.0% Charlotte 7.2% 4.5% 12.0% 8.6% Knoxville 3.6% 3.6% 7.3% 4.0% Memphis 8.2% 4.2% 12.7% 8.3% Nashville 5.6% 12.8% 19.% 8.0% Chattanooga 4.5% 1.7% 6.2% 7.5% mcvb

79 Pipeline Candlewood Southaven 86 rooms 2015 Hampton Inn Hernando 82 rooms 2015 Hilton Garden Inn Wolfchase 100 rooms 2015 Bass Pro Shop 100 rooms 2015 Homewood Suites Southaven 92 rooms 2016 Staybridge Suites Southaven 85 rooms 2016 Holiday Inn Express Southaven 100 rooms 2016 Hampton Inn Germantown 100 rooms 2016 Holiday Inn Centennial 100 rooms 2016 Holiday Inn Express Dtwn 115 rooms 2016 Hilton Garden Inn Dtwn 125 rooms 2016 Holiday Inn Express Graceland 85 rooms 2016 EPE Hotel 450 rooms 2016 Landers Center Hotel 225 rooms 2017 La Quinta Downtown 104 rooms 2017 Ascend Downtown 79 rooms 2017 One Beale 300 rooms 2018

80 Other Possibilities/Future Supply Bass Pro Shop Opens / Hotel Ikea Outlet Mall Southaven Graceland/GuestHouse at Graceland Landers Center Expansion

81 What Does the Future Hold

82 2015YE Projection Occupancy 66.5% (+2.5%) ADR - $88.00 (+4.5%) RevPAR - $58.52 (+7.1%)

83 US Lodging Market Jeff Higley VP, Digital Media & Communications/Editorial Director STR/STR Global/Hotel News Now

84 Keynote Speaker Greg Marcus President & CEO Marcus Hotels & Resorts

85 Presented by Pinkowski & Company and Metropolitan Memphis Hotel & Lodging Association Memphis Cook Convention Center August 18-19, 2015

Hotel InduSTRy Overview

Hotel InduSTRy Overview Lindsay Culbreath, CMHS, CHIA Senior Director of Business Development & Marketing STR Tennessee Business Travel Association October 14, 2014 STR provides monthly, weekly and daily