2017 Kansas Tourism Conference Hotel Industry Overview October 25, 2017

Size: px

Start display at page:

Download "2017 Kansas Tourism Conference Hotel Industry Overview October 25, 2017"

Douglas Mathews
5 years ago
Views:

1 2017 Kansas Tourism Conference Hotel Industry Overview October 25, 2017 Chris Klauda, Research Director 2017 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. 1

2 Agenda Total US Review Kansas Review US and Kansas Pipeline Current Events Forecasts 2

3 Once Upon A Time Business was good except for birds, In Kansas things look a bit different, If you build it will they come? Toto, we are not in Kansas anymore What does the future hold? 3

4 Data Dashboard>View All Data Presentations 4

5 The Center of the Hotel Industry Benchmarking Universe: Hendersonville, TN 5

6 What is? STR is a leading source for premium global data benchmarking, analytics and marketplace insights. 6

7 STR Building Blocks OCC Supply (rooms available) RevPAR Demand (rooms sold) ADR Revenue (rooms revenue) 7

8 STR Building Blocks Supply (1.86B rooms available) RevPAR $83 OCC 65.7% ADR $126 Demand (1.22B rooms sold) Revenue ($154B rooms revenue) 8

2016 Total World Hotel Industry Performance

9 2016 Total World Hotel Industry Performance (RevPAR % Change) Europe: 2.1% United States: 3.2% Caribbean: 3.0% Middle East: 9.3% Asia Pacific: 0.6% S. America: 5.3% RevPAR % Change, USD, Europe in EUR, Constant Currency,

10 US Performance: RevPAR Growth Continues +4.6% +1.8% +2.4% +2.1% +2.8% +0.6% 1.86B Supply 1.22B Demand 65.7% Occupancy $126 ADR $83 RevPAR $154B Revenue September, MMA, Total US Results 10

11 Look How Far We Have Come $140 $130 $120 ADR $110 $100 $90 September, MMA, Total US Results Occupancy 11

12 New Supply Increasing But Not Devastating Too much supply despite growing demand Supply % Change Demand % Change Today Bad timing; S&L crisis Declining supply, but -8 catastrophic demand loss Worst of all scenarios: sharply increasing supply at a time of catastrophic demand loss Total U.S., Supply & Demand % Change, 12 MMA 1/2002 9/

13 RevPAR Growth Gulf War 111 Months /11 56 Months 91 Months Housing / Banking Crisis Total U.S., RevPAR % Change, 1/1990 9/

14 RevPAR Growth: 7 Years And Counting Gulf War 111 Months /11 56 Months 91 Months Housing / Banking Crisis Total U.S., RevPAR % Change, 1/1990 9/

15 Chain Class Review Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Four Seasons & Ritz-Carlton Marriott & Hilton DoubleTree, Courtyard & Wyndham Hampton, Fairfield & Holiday Inn Express Best Western, Candlewood Suites & Ramada Days Inn, Red Roof Inn, Super 8, Econo Lodge Full Chain Class Listing: 15

Top Classes See Greater Supply Increase; All Others See Greater Demand Supply % Change Demand % Change 4.3 4.3 4.0 3.9 2.4 2.2 1.7 1.5 1.

16 Top Classes See Greater Supply Increase; All Others See Greater Demand Supply % Change Demand % Change Luxury Upper Upscale Upscale Upper Midscale Midscale Economy -0.4 *Supply / Demand % Change, by Class, 12 MMA September

Upper End Hotels Still Selling 7 Out Of 10 Rooms Luxury Class Upper Upscale Class Upscale Class 70.9 70.7 72.6 72.5 72.0 72.

17 Upper End Hotels Still Selling 7 Out Of 10 Rooms Luxury Class Upper Upscale Class Upscale Class Upper Midscale Class Midscale Class Economy Class *OCC %, by Scale, 12 MMA September 2017 &

Occupancy Growth Hard (Impossible?) To Come By For Some Scales ADR Occ 3.7 4.1 1.7 1.5 1.9 2.0 2.4 3.1 1.9 1.7-0.3-0.2 1.7 1.7 0.2 0.3 1.

18 Occupancy Growth Hard (Impossible?) To Come By For Some Scales ADR Occ Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *RevPAR % Change by Contribution of OCC / ADR % Change, by Class, 12 MMA September

Weekends Selling Out; Sunday and Monday Lag Saturday 73.1 73.6 Friday 70.0 70.4 Thursday 65.0 65.

19 Weekends Selling Out; Sunday and Monday Lag Saturday Friday Thursday Wednesday Tuesday Monday Sunday *OCC %, by DOW, 12 MMA September 2017 &

20 Total US Segmentation Trends 20

21 SEGMENTATION UPPER UPSCALE & LUXURY CLASS TRANSIENT GROUP SOURCE: STR 21

22 YTD Segmentation Mix Hotel USA Transient 62% <10 Rooms per Night Group 34% 10 Rooms per Night Contract 4% Rates stipulated by a contract (i.e. Airline Crews) Total US, Luxury & Upper Upscale Classes Only, 2017 June YTD 22

23 Chain Class Review Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Four Seasons & Ritz-Carlton Marriott & Hilton DoubleTree, Courtyard & Wyndham Hampton, Fairfield & Holiday Inn Express Best Western, Candlewood Suites & Ramada Days Inn, Red Roof Inn, Super 8, Econo Lodge Full Chain Class Listing: 23

24 Occupied Room Nights (Millions) Demand Segmentation: Transient Growth Outpacing Group Growth Transient Group TTM 2017 Transient +39% Group +2% Transient & Group Demand, Luxury & Upper Upscale Class Only by Year /2017 TTM 24

Group +16% $100 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 TTM 2017

25 ADR Segmentation Is A Different Story: Group ADR Growth Outpacing Transient ADR Growth $240 $220 $200 $180 $160 $140 $120 Transient Group Transient +12% Group +16% $ TTM 2017 Transient & Group Demand, Luxury & Upper Upscale Class Only by Year /2017 TTM 25

26 Today (12MMA) vs. Last Year Transient Demand +2.9% ADR +1.5% September 2017 STR. All Rights 2017 Reserved. 12MMA % Change, US Luxury & Upper Upscale Class 26

27 Today (12MMA) vs. Last Year Group Demand -1.5% ADR +2.4% September 2017 STR. All Rights 2017 Reserved. 12MMA % Change, US Luxury & Upper Upscale Class 27

28 Today (12MMA) vs. Last Year Transient Demand +2.9% ADR +1.5% Group Demand -1.5% ADR +2.4% September 2017 STR. All Rights 2017 Reserved. 12MMA % Change, US Luxury & Upper Upscale Class 28

Top 5 (Almost 6) Projects In Construction By Meeting Space Project Name Market Projected Opening Date Room Count Total Meeting Space Sq Ft Gaylord Rockies Hotel & Conference Center Denver 12/2018

29 Top 5 (Almost 6) Projects In Construction By Meeting Space Project Name Market Projected Opening Date Room Count Total Meeting Space Sq Ft Gaylord Rockies Hotel & Conference Center Denver 12/ ,000 Fairmont Austin Austin 09/ ,000 Hyatt Regency Seattle Seattle 06/ ,000 Omni Louisville Louisville 03/ ,000 JW Marriott Nashville Nashville 07/ ,

30 Markets (and Submarkets) 30

31 Five Best and Worst Performing Top 25 Markets Based on ADR % Change Market OCC % ADR % Change Influenced By Nashville, TN 74.0% 5.6% Bachelorette Parties Washington, DC-MD-VA 72.1% 4.3% Inauguration / Women s March Detroit, MI 66.5% 4.3% Seattle, WA 76.9% 4.2% Tampa/St Petersburg, FL 71.8% 4.2% Houston, TX 62.8% -1.0% New Supply; Future Harvey Impact New York, NY 86.5% -1.6% New Supply San Francisco/San Mateo, CA 83.4% -1.8% Superbowl 2016 / Moscone Center Closed Apr Aug Philadelphia, PA-NJ 68.1% -2.7% DNC 2016 Miami/Hialeah, FL 75.1% -3.7% New Supply * September, MMA ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets 31

32 September MMA: Kansas City Is A Top Performer Market OCC % ADR % Change Influenced By Nashville, TN 74.0% 5.6% Bachelorette Parties Washington, DC-MD-VA 72.1% 4.3% Inauguration / Women s March Detroit, MI 66.5% 4.3% Seattle, WA 76.9% 4.2% Tampa/St Petersburg, FL 71.8% 4.2% Kansas City, MO-KS 65.9% 4.2% Houston, TX 62.8% -1.0% New Supply; Future Harvey Impact New York, NY 86.5% -1.6% New Supply San Francisco/San Mateo, CA 83.4% -1.8% Superbowl 2016 / Moscone Center Closed Apr Aug Philadelphia, PA-NJ 68.1% -2.7% DNC 2016 Miami/Hialeah, FL 75.1% -3.7% New Supply * September, MMA ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets 32

33 STR Markets in Kansas and Surrounding Area 33

34 Performance: Kansas and Surrounding STR Markets Market OCC % ADR % Change Influenced By Colorado Springs, CO 68.1% 8.4% Kansas City, MO-KS 65.9% 4.2% Supply Decrease St Louis, MO-IL 65.4% 3.8% Colorado Area 60.8% 3.7% Denver, CO 73.2% 2.9% Supply Increase Missouri North 55.8% 2.9% Missouri South 54.9% 2.8% Kansas Area 53.3% 2.2% Tulsa, OK 55.0% 1.5% Nebraska 54.0% 1.3% Omaha, NE 58.2% 0.2% Oklahoma Area 48.4% -1.2% Oklahoma City, OK 61.2% -1.7% * September, MMA Actual Occupancy and ADR % Change in Markets Surrounding Kansas Supply Increase 34

35 Kansas 35

36 State of Kansas: ADR Drives RevPAR and Revenue Growth +2.6% +1.0% +0.5% +1.5% -1.0% -2.0% 16.6M Supply 9.3M Demand 56.2% Occupancy $87 ADR $49 RevPAR $812M Revenue September, MMA, Kansas Results 36

37 Kansas % Change KPIs Lower Than US Average EXCEPT ADR 5 4 Kansas Total US Supply Demand Occ ADR RevPAR Revenue September, MMA, Kansas Results 37

38 Kansas City Market and Four Kansas Submarkets 38

39 Kansas Hotel Room Supply I-70 Corridor 10% Kansas City, MO-KS 48% Kansas Area 22% Wichita 14% September, MMA, Kansas City Market and Kansas Submarket Results Topeka/Lawre nce 6% 39

Kansas Area I-70 Corridor Topeka/Lawrence Kansas City, MO- KS

40 Supply/Demand Out of Balance In Markets Outside KC 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% Demand change Supply change Wichita Kansas Area I-70 Corridor Topeka/Lawrence Kansas City, MO- KS September, MMA, Kansas City Market and Kansas Submarket Results 40

41 All Submarkets Above 50% Occupancy; Kansas City and I-70 See Gains Kansas City, MO-KS Wichita Topeka/Lawrence I-70 Corridor Kansas Area % 25% 50% 75% September, MMA Occupancy%, Kansas City Market and Kansas Submarket Results 41

42 Kansas City Attracts Highest ADR; All Markets Increased ADR in 2017 Kansas City, MO-KS Topeka/Lawrence Wichita Kansas Area I-70 Corridor $0 $20 $40 $60 $80 $100 $120 September, MMA ADR, Kansas City Market and Kansas Submarket Results 42

43 Kansas City Earns Highest RevPAR Kansas City, MO-KS Topeka/Lawrence Wichita I-70 Corridor Kansas Area $0 $10 $20 $30 $40 $50 $60 $70 $80 September, MMA RevPAR, Kansas City Market and Kansas Submarket Results 43

44 Class: KC and Outside KC Occupancy Differences Greater in Mid and Lower Tiers Midscale & Economy KC Outside KC Upscale & Upper Mid Luxury & Upper Upscale 0% 25% 50% 75% September, MMA Occupancy%, Kansas City Market and Kansas Submarket Results 44

45 Chain Class Review Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Four Seasons & Ritz-Carlton Marriott & Hilton DoubleTree, Courtyard & Wyndham Hampton, Fairfield & Holiday Inn Express Best Western, Candlewood Suites & Ramada Days Inn, Red Roof Inn, Super 8, Econo Lodge Full Chain Class Listing: 45

Upper Upscale $0 $20 $40 $60 $80 $100 $120 $140 $160 September,

46 Class: KC and Outside KC ADR Differences Greater in Upper Tiers Midscale & Economy KC Outside KC Upscale & Upper Mid Luxury & Upper Upscale $0 $20 $40 $60 $80 $100 $120 $140 $160 September, MMA ADR, Kansas City Market and Kansas Submarket Results 46

47 Market Metrics Occupancy Outside KC Kansas City Luxury & Upper Upscale 65.6% 66.4% Upscale & Upper Mid 62.9% 68.9% Midscale & Economy 47.4% 62.2% ADR Outside KC Kansas City Luxury & Upper Upscale $118 $147 Upscale & Upper Mid $102 $115 Midscale & Economy $64 $62 47

48 Pipeline 48

49 US Pipeline: I/C Growth Still Strong (But Growth Rates Used to be 30%+) Phase % Change In Construction % Final Planning % Planning % Under Contract % *Total US Pipeline, by Phase, 000s Rooms, August 2017 and

50 Limited Service Construction Is The Name Of The Game % Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated *US Pipeline, Rooms In Construction, 000s Rooms, by Scale, August

51 Top 110 MSAs Pipeline Growth Southeast and West Dominate Market Rooms In Construction % Of Existing Nashville-Davidson--Murfreesboro--Franklin, TN (MSA ) 5, % Savannah, GA (MSA ) 1, % Denver-Aurora-Lakewood, CO (MSA ) 5, % Oklahoma City, OK (MSA ) 2, % North Port-Sarasota-Bradenton, FL (MSA ) % New York-Newark-Jersey City, NY-NJ-PA (MSA ) 18, % Seattle-Tacoma-Bellevue, WA (MSA ) 4, % Portland-Vancouver-Hillsboro, OR-WA (MSA ) 2, % Dallas-Fort Worth-Arlington, TX (MSA ) 9, % Greenville-Anderson-Mauldin, SC (MSA ) % *US Pipeline, Rooms I/C and as % of Existing Supply, Largest % In Top 110 MSAs, August

52 Upper Midscale Is The Name Of The Game in Kansas (22 Props) Kansas US 70% 32% 33% 5% 0% 0% 14% 21% 9% 5% 0% 1% 0% 10% Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated *Kansas and US Pipeline, % of Rooms In Construction, by Scale, August

53 Pipeline 22 in Kansas; 8+1 in Missouri Hays 3 in Topeka 2 in KCK 5 in Overland Park 8+1 in MO Salinas 2 in McPherson Emporia Liberal 4 in Wichita Chanute Pittsburg 53

54 Current Events Industry Consolidation Oil Markets AirBNB President Trump 54

55 President Trump Hotel Guy Sentiment Toward US Turning Negative Tax Cuts Travel Bans Deregulation Immigration Policies 55

56 56

57 2017 / 2018 Forecast 57

58 Total United States Key Performance Indicator Outlook (% Change vs. Prior Year) 2017F 2018F Outlook 2016 Actual 2017 Forecast 2018 Forecast Supply 1.8B 2.0% 2.1% Demand 1.2B 2.0% 1.9% Occupancy 65.4% 0.0% -0.2% ADR $ % 2.5% RevPAR $81 2.3% 2.3% 58

59 Forecast Summary (STR as of August 2017, CBRE and PWC as of May 2017) 2017 as Supply 2.0% 2.0% 2.0% Demand 2.0% 2.1% 2.1% Occupancy 0.0% 0.1% 0.1% ADR 2.3% 2.9% 2.3% RevPAR 2.3% 3.0% 2.3% 2018 Supply 2.1% 2.1% 1.8% Demand 1.9% 1.8% 1.6% Occupancy -0.2% -0.3% -0.2% ADR 2.5% 2.9% 2.2% RevPAR 2.3% 2.6% 2.0% 59

60 Once Upon A Time Continued positive performance 91 months and counting! In Kansas - a tale of two cities areas, Limited service supply rules; especially in Kansas; except for, Current events yield positive and negative momentum for travel; Kansas less impacted (?) Future is optimistic; ADR is the name of the game 60

Questions? Presentation is available for download. To view this presentation, click STR Data Presentations from the drop-down menu on www.

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.

61 Questions? Presentation is available for download. To view this presentation, click STR Data Presentations from the drop-down menu on 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. 61