Hotel Industry Performance Overview

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1 Hotel Industry Performance Overview GWTTRA Conference Valerie Woods Associate Director of Business Development, Hotels Valerie_STR 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.

2 Data Dashboard>View All Data Presentations

3 Agenda Total U.S. Review Markets Greater Western States Food & Beverage? Looking Forward: Pipeline & Forecast

4 About STR The Data 75 >56,

5 STR Coverage Our Census Database Branded vs. Unbranded Rooms % Share, February % 33% 39% 61% 40% 60% 38% 62% 54% 46% 52% 48% Branded Unbranded

6 Just Three Numbers Percent Change By Geography and Comp Set

7 Total U.S. Review

8 12MMA February 2017: ADR Growth Continues % Change Room Supply 1.6% Room Demand 1.8% Occupancy 65.4% 0.2% A.D.R. $ % RevPAR $81 3.2% Room Revenue 4.8% February MMA, Total US Results

9 Demand Growth Slows. Supply Growth Increases To 1.6% Supply % Change Demand % Change Total U.S., Supply & Demand % Change, 12 MMA Jan 1990 Feb 2017

10 Occupancy Growth Rapidly Approaching 0% Occ % Change ADR % Change Total U.S., ADR & OCC % Change, 12 MMA Jan 1990 Feb 2017

11 US Market Cycle & Forecast $140 Average Rate $130 $120 $110 $100 Feb % Dec 2018 Dec 2017 Dec 2016 $ Occupancy

12 RevPAR Growth: Slowing Down After 6 Yrs. Of Growth Months 31 Mo 56 Months 84 Months Total U.S., RevPAR % Change, Jan 1990 Feb 2017

13 Real Rate and RevPAR at All-Time High $125 Real ADR Real RevPAR $115 $105 $95 $85 $75 $65 $120 $75 $123 $81 $ Source: STR, BLS; Inflation-adjusted ADR and RevPAR, ending Dec 2016; Inflation rate (All Urban Consumers (CPI-U), U.S. City Average, All Items)

14 US 12 MMA February RevPAR: 3 Markets Dragged US Results Total US YTD: +3.2% NYC: - 1.5% Miami: - 6.7% Houston: -10.1% Total US excluding NYC, Miami & Houston: +3.7% RevPAR % Change 12 MMA February 2016 YTD

Quarterly RevPAR % Change: Slow is the New Normal 2013 2014 2015 2016 7.8 8.0 9.1 8.8 6.0 6.7 4.7 6.

15 Quarterly RevPAR % Change: Slow is the New Normal Q1 Q2 Q3 Q4 Total US, RevPAR % Change, by Quarter, Q Q4 2016

16 RevPAR Growth: Erratic Monthly Numbers, But Trend Is Slowing 10 8 Monthly 12MMA Total U.S., RevPAR % Change by month and 12 MMA, Jan 2015 Feb 2017

17 Chain Scale Review Luxury Waldorf Astoria, Loews, Four Seasons & Ritz Carlton Upper Upscale Hilton, Hyatt, Marriott, Westin & Sheraton Upscale HGI, Homewood Suites, Springhill & Courtyard Upper Midscale Hampton Inn, Holiday Inn Express & Fairfield Inn Midscale La Quinta Inns & Suites, Quality Inn & Wingate Economy Days Inn, Super 8, Econolodge & Red Roof

Scales: Supply Growth Outpaces Demand Growth For Most Scales Supply % Change Demand % Change 5.7 5.0 3.1 2.8 1.8 1.7 2.4 2.2 1.1 1.4 1.0 0.

18 Scales: Supply Growth Outpaces Demand Growth For Most Scales Supply % Change Demand % Change (0.0) Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Independents Supply / Demand % Change, by Scale, February MMA

High End Hotels Still Very Busy (But A Little Less So) 73.7 74.0 74.1 74.2 73.7 74.1 2016 2015 67.4 67.5 59.3 59.2 57.7 57.

19 High End Hotels Still Very Busy (But A Little Less So) Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Independents OCC %, by Scale, February 2017 & MMA

(Only) In This Part Of The Cycle: Independents Outperform Brands ADR % Change Occupancy % Change 4.6 RevPAR % Change 1.6 1.9 1.9 2.1 1.8 2.1 2.5 2.2 2.7 2.5 2.9 3.3 3.7 0.9 (0.

20 (Only) In This Part Of The Cycle: Independents Outperform Brands ADR % Change Occupancy % Change 4.6 RevPAR % Change (0.3) (0.2) (0.6) (0.1) 0.2 (0.3) Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Independents *RevPAR % Change by Contribution of OCC / ADR % Change, by Scale, MMA

21 Markets

22 February YTD 2016 : New Supply Hits NYC, Houston, Miami Market OCC % ADR % Change Los Angeles/Long Beach, CA Nashville, TN Tampa/St Petersburg, FL Atlanta, GA Minneapolis/St Paul, MN-WI Chicago, IL New Orleans, LA Houston, TX New York, NY Miami/Hialeah, FL February MMA ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets

23 Demand Change by Submarket 2016

24 Supply Growth Amplifies RevPAR Declines Houston, TX Pittsburgh, PA NYC Supply% Change Austin, TX Cleveland Texas West 5 4 Melbourne/Titusville, FL West Virginia North Dakota West Virginia Knoxville, TN RevPAR % Change -1-2 CO Springs Daytona Beach -3 February MMA Supply & RevPAR % Change, All Markets

25 Majority Of Markets With Positive ADR % Change 10 ADR % Change Melbourne, FL 30% Occ % Change Wyoming Houston 5 NYC CO Springs 61% New Jersey Shore West Virginia -5 North Dakota Texas West -10 8% -15 1% February MMA ADR & Occupancy % Change, All Markets. % are respective share of all 164 markets

26 Greater Western Region

27 North American TTRA Chapters: Occupancy Growth Slowing Hawaii +0.6% 79.2% Greater Western Southeastern States Canada Texas Censtates +0.8% +0.9% +0.6% -2.7% -0.7% 69.7% 65.3% 64.5% 63.0% 60.0% NA TTRA Chapters, Occ & Occ % Change, YTD Dec 2016

TTRA Chapters: ADR Still Growing, but Not as Fast Hawaii +4.1% $254.76 Greater Western +5.0% $134.

28 TTRA Chapters: ADR Still Growing, but Not as Fast Hawaii +4.1% $ Greater Western +5.0% $ Canada Southeastern States Censtates +2.0% +2.7% +2.7% $ $ $ Texas -0.1% $ NA TTRA Chapters, ADR ($) & ADR % Change, YTD Dec 2016

TTRA Chapters: RevPAR Growth From Rate $202 $193 2015 2016 $60 $61 $65 $63 $71 $73 $70 $73 $89 $94 +1.9% -2.8% +2.6% +3.7% +5.9% +4.

29 TTRA Chapters: RevPAR Growth From Rate $202 $ $60 $61 $65 $63 $71 $73 $70 $73 $89 $ % -2.8% +2.6% +3.7% +5.9% +4.7% Censtates Texas Canada Southeastern States Greater Western Hawaii NA TTRA Chapters, RevPAR $ and RevPAR % Change YTD Dec 2015 & 2016

30 Occupancies Varying Greatly by State Greater Western States, Occupancy % 2016

31 ADR Grew in All States Except Alaska & New Mexico 3.2% 0% 2.7% 4.6% 4.0% 2.9% 5.4% 8.0% 4.1% 4.9% 3.2% -.5% Greater Western States, ADR % Change 2016

32 ADR Growth Drives RevPAR Growth 2.8% -1.1% 2.1% 7.1% 7.8% -9.1% 6.6% 9.6% 5.4% 5.2% 5.7% -.6% Greater Western States, RevPAR % Change 2016

33 Greater Western Markets: >20,000 Rooms Occupancy % Change -4% -2% 0% 2% 4% 6% Los Angeles/ Long Beach Riverside/ San Bernardino 8% Denver Anaheim/ Santa Ana San Jose/ Santa Cruz Portland Seattle Salt Lake City San Diego Phoenix Sacramento 6% 4% 2% ADR % Change San Francisco/ San Mateo 0% Select Markets, Occupancy & ADR % Change 12MMA, Feb 2017

34 Greater Western Markets: 10,000-20,000 Rooms Oakland Occupancy % Change -4% -2% 0% 2% 4% 6% 8% Colorado Springs 8% Bakersfield Albuquerque Tucson Fresno Monterey/ Salinas Reno 6% 4% 2% ADR % Change 0% Select Markets, Occupancy & ADR % Change 12MMA, Feb 2017

35 Greater Western Markets: 5,000-10,000 Rooms Santa Barbara/ Santa Maria, CA Occupancy % Change -6% -4% -2% 0% 2% 4% 6% Oxnard/ Ventura, CA Tulare/ Visalia, CA Flagstaff, AZ Santa Rosa/ Sonoma, CA San Luis Obispo/ Grand Canyon/ Paso Robles, CA Williams, AZ Yakima/ Redding/ Chico, CA Kennewick, WA Tacoma/ Olympia, WA Spokane, WA Las Cruces/ Alamogordo, NM Billings, MT Prescott/ Sedona, AZ Stockton/ Boise, ID Modesto, CA Bozeman/ Yellowstone Area, Medford/ MT Grants Pass, OR Santa Fe, NM 10% 8% 6% 4% 2% 0% -2% ADR % Change Select Markets, Occupancy & ADR % Change 12MMA, Feb 2017

36 Greater Western Markets: <5,000 Rooms Vallejo/Fairfield/ Vacaville, CA Napa Valley, CA Boulder/ Longmont, CO Provo, UT Missoula, MT Occupancy % Change -2% 0% 2% 4% 6% 8% Helena/ Great Falls, MT Eureka/ Crescent City, CA Gallup/ Grants, NM Eugene, OR Bend/ Redmond, OR 8% 6% 4% 2% 0% ADR % Change Select Markets, Occupancy & ADR % Change 12MMA, Feb 2017

37 Food & Beverage Performance

Q4 Positively Impacts Full Year F&B RevPAR Results 2014 2015 2016 $88.60 $87.48 $85.48 $86.65 $81.93 $79.

38 Q4 Positively Impacts Full Year F&B RevPAR Results $88.60 $87.48 $85.48 $86.65 $81.93 $ th QTR Full Year Total U.S. F&B RevPAR 4 th QTR and Full Year *Luxury & Upper Upscale Classes Only

39 Holidays Impact Q4 Catering & Banquets Performance $0.75 $0.82 $0.81 $0.78 $0.80 $0.72 4th QTR Full Year Total U.S. Banquets & Catering RevPAS (Revenue Per Available Sq. Ft.) 4 th QTR and Full Year *Luxury & Upper Upscale Classes Only

40 Catering & Banquets Drives Hotel F&B Revenue Growth +2.3% +0.2% +1.4% +1.4% -2.7% Catering & Banquets RevPAS F&B Venues Rev/Avail Seat In-Room Dining Rev/Occ Room Total F&B RevPAR F&B Revenue U.S. F&B KPIs % Change Full Year 2016 Luxury & Upper Upscale Classes Only

41 Evidence of Direct Correlation Between C&B and F&B RevPAR 10.0% 8.0% 6.0% F&B RevPAR C&B RevPAS 8.8% 7.5% 4.0% 2.0% 0.0% % 1.4% Total U.S. F&B RevPAR/Catering & Banquets RevPAS (Revenue Per Available Sq. Ft.) % Change 12MMA February December 2016 *Luxury & Upper Upscale Classes Only

42 F&B RevPAR: A Consistent Mix of Food/Beverage/Other Revenue Food Beverage Other Revenue $15.23 $20.22 $14.12 $46.69 $15.35 $51.08 February 2014 December 2016 Total U.S. F&B RevPAR/Revenue Streams 12MMA February 2014 & December 2016 *Luxury & Upper Upscale Classes Only

43 Pipeline & Forecast

44 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, February 2017 and 2016

45 I/C Pipeline Is Growing But Still Below Prior Peak K Thousands High: Dec K Feb K 50 Low: May 11 50K Total US Pipeline; Rooms In Construction, in 000s; Jan 2006 Feb 2017

Limited Service Construction Is The Name Of The Game 62.1 63.3 27.5 64% 22.4 8.5 8.4 2.

46 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, February 2017

47 Construction In Top 26 Markets: 10 With 5%+ Of Supply Market Rooms I/C % Of Existing Oahu Island, HI 180 1% Norfolk/Virginia Beach, VA 456 1% Orlando, FL 1,899 2% Minneapolis/St Paul, MN-WI 1,043 3% Las Vegas, NV 4,116 3% St Louis, MO-IL 1,087 3% Phoenix, AZ 1,967 3% New Orleans, LA 1,391 4% Chicago, IL 4,000 4% San Diego, CA 2,157 4% Washington, DC-MD-VA 4,069 4% San Francisco/San Mateo, CA 1,935 4% Tampa/St Petersburg, FL 1,771 4% Detroit, MI 1,744 4% Anaheim/Santa Ana, CA 2,348 4% Atlanta, GA 3,946 4% Houston, TX 4,684 5% Philadelphia, PA-NJ 2,726 6% Boston, MA 3,287 6% Los Angeles/Long Beach, CA 6,060 6% Miami/Hialeah, FL 3,844 7% Dallas, TX 7,008 8% Denver, CO 4,663 10% Nashville, TN 4,844 12% Seattle, WA 5,416 13% New York, NY 15,434 13% US Pipeline, Top 26 Markets, I/C Rooms as % of Existing Supply, February 2017

Pipeline ( 000s rooms): Top 26 Markets Have 47% Of U/C Rooms In Construction Final Planning Planning 92.1 78.1 72.7 102.

48 Pipeline ( 000s rooms): Top 26 Markets Have 47% Of U/C Rooms In Construction Final Planning Planning Top 26 Markets Rest of the US *US Pipeline, Rooms ( 000s), Top 26 Markets vs. All Other Markets, February 2017

49 Northwestern Nevada Pipeline Planning Studio 6 Sparks 90 rooms late 2018 Final Planning Courtyard Sparks 125 rooms early 2019 Residence Inn Sparks 100 rooms mid 2018 Hampton Inn & Suites Sparks 102 rooms mid 2018 Springhill Suites Reno 100 rooms late 2018 Home2 Suites Reno 100 rooms mid 2019 Townplace Suites Carson City 91 rooms late 2018 In Construction The Edgewood Stateline 154 rooms June 2017

50 Notable Calendar Shifts Impacting Lodging Performance Data in 2017: Easter: Jewish Holidays: From M arch to April (affects Q1/Q2) From October to September (affects Q3/Q4) February back to 28 days (vs 2016): No impact. STR normalizes the data. Notable Market Level Events / Comps: Super Bowl: From San Francisco To Houston San Francisco: Super Bowl Shift and Moscone Center Renovation Los Angeles: Porter Ranch Gas Leak Washington, D.C.: Inauguration & Women s March (January) East Tennessee: Wild Fires (November) East Coast: Hurricane Matthew (October)

51 School Breaks Have Impact; Easter Shift in 2017 Creates More Fragmented Spring Break

52 Total United States Key Performance Indicator Outlook (% Change vs. Prior Year) 2017F 2018F Outlook 2017 Forecast 2018 Forecast Supply 2.0% 2.2% Demand 1.7% 2.0% Occupancy -0.3% -0.2% ADR 2.8% 2.8% RevPAR 2.5% 2.6%

Total United States Chain Scale Key Performance Indicator Outlook 2017F by Chain Scale 2017 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (% chg) Luxury -0.4% 2.5% 2.

53 Total United States Chain Scale Key Performance Indicator Outlook 2017F by Chain Scale 2017 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (% chg) Luxury -0.4% 2.5% 2.1% Upper Upscale -0.2% 2.5% 2.3% Upscale -1.1% 2.5% 1.3% Upper Midscale -0.7% 2.3% 1.6% Midscale 0.1% 2.4% 2.5% Economy 0.0% 2.7% 2.7% Independent -0.3% 3.0% 2.7% Total United States -0.3% 2.8% 2.5%

54 2017 Year End RevPAR Forecast Top 25 US Markets, Nov 2016 Forecast (Markets sorted alphabetically) -5% to 0% 0% to 5% 5% to 10% Houston, TX Miami-Hialeah, FL New York, NY Anaheim-Santa Ana, CA Atlanta, GA Boston, MA Chicago, IL Dallas, TX Denver, CO Detroit, MI Los Angeles-Long Beach, CA Minneapolis-St. Paul, MN-WI Nashville, TN New Orleans, LA Norfolk-Virginia Beach, VA Oahu Island, HI Orlando, FL Philadelphia, PA-NJ Phoenix, AZ San Diego, CA San Francisco/San Mateo, CA Seattle, WA St. Louis, MO-IL Tampa, FL Washington, D.C.

Questions? Presentation is available for download. To view this presentation, click STR Data Presentations from the drop-down menu on www.hotelnewsnow.com. 2017 STR, Inc. All Rights Reserved.

55 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.

Thank You! Valerie Woods Associate Director of Business Development, Hotels vwoods@str.com Valerie_STR Valerie Woods 2017 STR, Inc.

Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc.

56 Thank You! Valerie Woods Associate Director of Business Development, Hotels Valerie_STR Valerie Woods 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.