Industry. OH&LA Hospitality It s not all BLACK & WHITE. Duane Vinson Vice President

Transcription

1 State of the Industry OH&LA Hospitality 2010 It s not all BLACK & WHITE Duane Vinson Vice President

2 For a copy of this presentation go to Click on Industry Presentation

3 Supply Growth Stubborn Strong Demand Rebound U.S. Room Supply/Demand Percent Change Twelve Month Moving Average 1990 to October Supply % Change Demand % Change Supply Demand Oct 1.4% 8.4% YTD 21% 2.1% 76% 7.6% 12mo 2.2% 6.4%

4 ADR Growth Slow in Returning U.S. Occupancy/ADR Percent Change Twelve Month Moving Average 1990 to October Occ ADR Oct 6.9% 1.2% YTD 54% 5.4% -0.5% 05% Occ % Chg 12mo 4.1% -1.4% ADR % Chg

5 10.00 ADR Declines Accelerate In Each Downturn % 5.0 ADR % Change Demand % Change 4.7%% 8.9%

6 Overall improvement from last year! Key Performance Indicators Percent Change October YTD Supply Demand Occupancy ADR RevPAR

7 STR Chain Scales Selected chains from each segment Luxury Four Seasons, Ritz Carlton, Fairmont, Upper Upscale Embassy, Hilton, Marriott, Sheraton, Hyatt Upscale Hilton Garden Inn, Courtyard, Crowne Plaza Mid with F&B Holiday Inn, Ramada, Best Western Mid w/o F&B Hampton Inn, Holiday Inn Express, La Quinta Economy Red Roof, Days Inn, Super 8

8 Chain Scale Recovery Skewed Toward Higher End Supply / Demand Percent Change October 2010 YTD Supply Demand Luxury Upper Upscale Upscale Mid w/ F&B Mid w/o F&B Economy

9 Despite Stronger Occupancy, ADR Growth Lacking Occupancy / ADR Percent Change October 2010 YTD Occupancy ADR Luxury Upper Upscale -3.5 Upscale Mid w/ F&B Mid w/o F&B Economy

10 RevPAR up in the East and Mid West, Room rates a big issue in the South Atlantic and West October 2010 YTD Occupancy: 5.9% ADR: -0.7% RevPAR: 5.2% Occupancy: 4.2% ADR: -2.1% RevPAR: 2% Occupancy: 73% 7.3% ADR: -0.9% RevPAR: 6.3% Occupancy: 8.3% ADR: 0.9% Occupancy: 3.7% RevPAR: 9.2% ADR: 0.9% RevPAR: 4.7% Occupancy: 6.6% ADR: 2.7% RevPAR: 9.5% TOTAL US Occupancy: 5.4% ADR: -0.5% RevPAR: 4.9% Occupancy: 2.7% ADR: -1.5% RevPAR: 1.1% Occupancy: 5.4% ADR: -0.4% RevPAR: 4.9% Occupancy: 5.6% ADR: -1.6% RevPAR: 4%

11 Ohio Trends

12 Ohio - Key Statistics YTD Through October 2010 % Change Hotels 1,369 Room Supply 37.5 mil.6% Room Demand 20.3 mil 6.7% Occupancy 54.1% 6.1% A.D.R. $ % RevPAR $ % Room Revenue $1.6 bil 5.8%

13 Ohio Room Supply/Demand Percent Change Twelve Month Moving Average 1999 to Oct Aug % 53% 5.3% 0.6% Nov % Supply Demand Oct 0.5% 7.5% Supply % Change YTD 06% 0.6% 67% 6.7% Demand % Change 12mo 0.6% 5.3% -7.3%

14 Ohio Active Development Pipeline - Rooms Change From Last Year October October Phase Difference %Ch Change In Construction 1,606 1, % Final Planning 1,051 1, % Planning 5,351 3,733 1,618 43% Active Pipeline 8,008 6,617 1,391 21% Pre-Planning Planning 1,510 3,527-2,017-57% Total 9,518 10, % Source: STR / TWR / Dodge Construction Pipeline

15 15 Largest Projects in the Active Pipeline Hotel Name Address Rooms Anticipated Open Date Phase Hilton Columbus Downtown 401 N High St, Columbus, OH Sep-12 Under Construction Holiday Inn & Suites Cincinnati 8th & Sycamore St, Cincinnati, OH May-12 Planning Unnamed The Banks 100 Walnut St, Cincinnati, OH Planning Holiday Inn & Suites Cleveland 1118 Euclid Ave, Cleveland, OH Jul-12 Planning Crowne Plaza Columbus Airport Morrison Rd & Waterbury Ct, Gahanna, OH Jun-12 Planning Hampton Inn & Suites Columbus University Area 3160 Olentangy River Rd, Columbus, OH Feb-12 Planning Doubletree Hotel Cleveland Clinic University Circle Area Carnegie Ave, Cleveland, OH Feb-11 Under Construction Aloft Hotel Cleveland Downtown 1111 W 10th St, Cleveland, OH Jan-13 Planning Courtyard By Marriott University Circle Cornell Dr, Cleveland, OH Nov-12 Planning Unnamed Hotel Conference Westford Lifestyle Community Us Rt 224, Canfield Township, OH Planning Courtyard By Marriott Cincinnati Norwood I-71 & Smith Edwards, Cincinnati, OH Planning Hotel Indigo Cleveland Downtown 2017 E 9th St, Cleveland, OH Dec-11 Planning Holiday Inn & Suites Dayton Airport 3330 Terminal Rd, Vandalia, OH Nov-11 Planning Kimpton Schofield Hotel 2000 E 9th St, Cleveland, OH Planning Springhill Suites Columbus 1421 Olentangy River Rd, Columbus, OH Jul-11 Under Construction Source: STR / TWR / Dodge Construction Pipeline

16 Ohio Occupancy/ADR Percent Change Twelve Month Moving Average 1999 to Oct Occ % Chg ADR % Chg Feb % Apr 07 6% Occ ADR Oct 7.0% 1.1% YTD 6.1% -0.7% 12mo 4.7% -1.2% Mar % Oct 09-8% 47% 4.7% -1.2%

17 Ohio Occupancy and ADR Twelve Month Moving Average Oct Occupancy (%) ADR ($) Peak $80.46 Oct Dec 08 $ %

18 Ohio Classes Supply / Demand Percent Change October 2010 YTD Supply Demand Luxury Upper Upscale Upscale Mid w/ F&B Mid w/o F&B Economy

19 Same general pattern as US.high end leads recovery Ohio Classes Occupancy / ADR Percent Change October 2010 YTD Occupancy ADR Luxury Upper Upscale Upscale Mid w/ F&B Mid w/o F&B Economy

20 RevPAR is all Occ driven on high end, Rm Rev could be even better Ohio Classes RevPAR / Room Revenue Percent Change October 2010 YTD RevPAR Room Revenue Luxury Upper Upscale Upscale Mid w/ F&B Mid w/o F&B Economy

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22 Most OH cities have seen 5%+ Demand Growth YTD October 2010, Supply & Demand & Change 12 9 Supply Chg Demand Chg

23 Rate growth still a challenge in most areas YTD October 2010, Occ & ADR % Change Occ Chg ADR Chg

24 Very little rate differential in larger vs. smaller markets YTD October 2010, Absolute Occ & ADR Occ % ADR $

25 Columbus Room Supply/Demand Percent Change Monthly Year-Over-Year 2004 October Supply % Change Demand % Change Supply Demand Oct YTD mo

26 Columbus Occupancy / ADR Percent Change Monthly Year-Over-Year 2004 October Occ ADR 15 Oct YTD mo Occupancy % Chg ADR % Chg

27 Cleveland Room Supply/Demand Percent Change Monthly Year-Over-Year 2004 October Supply % Change Demand % Change Supply Demand Oct YTD mo

28 Cleveland Occupancy / ADR Percent Change Monthly Year-Over-Year 2004 October Occupancy % Chg ADR % Chg Occ ADR Oct YTD mo

29 Cincinnati Room Supply/Demand Percent Change Monthly Year-Over-Year 2004 October Supply % Change Demand % Change Supply Demand Oct YTD mo

30 Cincinnati Occupancy / ADR Percent Change Monthly Year-Over-Year 2004 October Occupancy % Chg 15 ADR % Chg Occ ADR Oct YTD mo

31 Group & Transient Occupancy showing fast recovery Ohio Group vs. Transient Occupancy , April 2009 YTD vs. April 2010 YTD 10 5 Group Transient YTD Oct 2009 YTD Oct 2010

32 Group vs. Transient Occupancy Ohio , July 2009 YTD vs. July 2010 YTD Oct YTD 2009 Oct YTD Group Transient

33 In spite of steep transient ADR drop, group stayed high in 09 and 10 Ohio Group and Transient ADR 90 Transient runs avg. $5.39 premium Group runs avg. $1.23 premium Group ADR Trans ADR

34 Group vs. Transient ADR Ohio , April 2009 YTD vs. April 2010 YTD Oct YTD 2009 Oct YTD Group Transient

35 Pipeline & Projections

36 In Construction down sharply, Rooms in Planning steady U.S. Development Pipeline - Rooms Change From Last Year Phase October 2010 October 2009 Difference %Ch Change In Construction 56, ,927-55, % Final Planning 56,621 70,318-13, % Planning 228, ,020-24, % Active Pipeline 341, ,265-94, % Pre-Planning 102, ,115-16, % Total 443, , , % Source: STR/McGraw-Hill Construction Dodge Pipeline

37 Many brands in the Upscale and Mid w/f&b segments continue to build aggressively In Thousands - October 2010 Planning Final Planning In Construction Luxury Upper Upscale Upscale Mid w F&B Mid w/o F&B Economy Unaffiliated Source: STR/McGraw-Hill Construction Dodge Pipeline

38 Midscale & Upscale brands lead development Top 15 Brands All Active Phases October 2010 Holiday Inn Express Hampton Inn Suites Holiday Inn Hilton Garden Inn La Quinta Inn & Suites Courtyard Candlewood Suites Fairfield Inn Staybridge Suites Residence Inn Springhill Suites Hampton Inn Home2 Suites Homewood Suites Embassy Suites 15,544 12,799 11,861 11,683 10,484 10,182 9,491 9,487 8,584 7,614 6,124 5,898 5,157 20,412 25, ,000 10,000 15,000 20,000 25,000 30,000 Source: STR/McGraw-Hill Construction Dodge Pipeline Rooms

39 Total United States Closed Hotels Annual 2002 through ,946 rooms in 2005 to 12,746 rooms in Number of Hotels Number of Rooms (in thousands) JQH: Not over developed, just under demolished.

40 Total United States Opened Hotels Annual 2002 through ,600 1,400 1,200 1, Large number of abandonments in ,031 1,379 1, ,001 rooms in ,451 rooms in Number of Hotels Number of Rooms (in thousands)

41 U.S. Economic Outlook Blue Chip Economic Indicators November F 2011F Real GDP +2.6% +2.7% +2.5% CPI -0.4% +1.6% +1.5% Corporate Profits -3.8% +30.3% 3% +6.3% Disp. Personal Income +0.6% +1.2% +1.9% Unemployment Rate 9.3% 9.6% 9.4%

42 Total United States Supply/Demand Percent Change P Supply % Chg Demand % Chg P 2011P 20 Yr Average -6.1

43 Total United States Occupancy Percent Change P Year Average: -0.8% P 2011P -8.8

44 Total United States Occupancy Percent P P 2011P

45 Total United States ADR Percent Change P Year Average: 2.8% P 2011P 3.9

46 Total United States Average Daily Rate (In Dollars) P $125 $100 $86.25 $91.05 $97.96 $ $ $98.00 $97.92 $ $75 $ P 2011P

47 2% is the number to watch! Hotel Rooms Sold vs. ADR Change Quarterly Change 1988 to 2010 Q Demand % Chg ADR % CHG q1 1991q1 1994q1 1997q1 2000q1 2003q1 2006q1 2009q

48 Total United States RevPAR Percent Change P Year Average: 2.1% P 2011P

49 Total United States Key Performance Indicator Outlook Scenario (% change vs. Prior Year) 2010F Hotel Industry Performance Scenarios 2010 Low Growth Forecast High Growth Supply Demand Occupancy ADR RevPAR

50 Total United States Key Performance Indicator Outlook Scenario (% change vs. Prior Year) 2011F Hotel Industry Performance Scenarios 2011 Low Growth Forecast High Growth Supply Demand Occupancy ADR RevPAR

51 Total United States Chain Scale Key Performance Indicator Outlook 2010F by Chain Scale Chain Scale Occupancy (% chg) 2010 Year End Outlook ADR (% chg) RevPAR (%chg) Luxury Upper Upscale Upscale Midscale w/ F&B Midscale w/o F&B Economy Independent

52 Total United States Chain Scale Key Performance Indicator Outlook 2011F by Chain Scale Chain Scale Occupancy (% chg) 2011 Year End Outlook ADR (% chg) RevPAR (%chg) Luxury Upper Upscale Upscale Midscale w/ F&B Midscale w/o F&B Economy Independent

53 Total United States Supply & Demand Outlook Quarterly vs. Same Quarter Prior Year 10.0% 9.0% 8.0% 2010Q1 A 2010Q2 A 2010Q3 2010Q4 8.6% 8.5% 2011Q1 2011Q2 2011Q3 2011Q4 7.0% 60% 6.0% 5.0% 4.0% 5.0% 5.5% 4.1% 3.0% 2.0% 1.0% 0.0% 2.6% 2.3% 1.7% 1.7% A 1.5% 1.7% 1.3% 1.0% 0.8% A A A A A 2.6% 1.9% Supply % Chg Demand % Chg Note: Q1-Q data is actual

54 Total United States Occupancy & ADR Outlook Quarterly vs. Same Quarter Prior Year 9.0% 7.0% 5.0% 3.0% 2.3% 67% 6.2% 6.7% 3.8% 2.6% 2010Q1A 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 32% 3.2% 1.6% 1.7% 1.9% 1.1% 3.5% 4.1% 5.0% 1.0% 0.4% A A A A 0.0% 1.0% A A 3.0% 5.0% 4.3% Occupancy % Chg ADR % Chg Note: Q1-Q data is actual

55 Total United States RevPAR Outlook Quarterly vs. Same Quarter Prior Year 12.0% 2010Q1A 2010Q2 2010Q3 10.0% 0% 2010Q4 2011Q1 2011Q2 8.5% 2011Q3 2011Q4 8.0% 60% 6.0% 4.0% 6.2% 5.8% 5.8% 5.7% 3.9% 6.1% 20% 2.0% 0.0% 2.0%% 4.0% A 2.1% A A RevPAR % Chg

56 Takeaways The Good News: Full Recovery is Underway! New Supply Not Really An Issue yet. Demand Improving Across The Board Pricing Is Slowly Returning Unemployment will continue to impact travel Yield Management Discipline (???) Value proposition is critical New Frugality

57 Questions