San Francisco Travel Association Citywide Customer Advisory Council Meeting August 21, 2014
Agenda Discussion Themes 1. Meetings Are Important 2. Market Meetings Pace 3. Occupancy & Rate 4. Economic Impact Calculator Update
Meetings Are Important
Annual San Francisco Expenditures Relates to Trade Shows and Conventions 2013 Convention Attendee Statistics Source: San Francisco Travel Association; 2013 San Francisco Visitor Impact Report $1,988,647,936 Total Convention Impact to the San Francisco Economy $723,237,927 Association/Exhibitor Spending 681,416 attendees in SF Hotels $323.52 Spending per day 903,864,291 SF Hotel Attendee Spending 1.4 Multiple occupancy factor 4.1 Length of stay 1,265,410,007 Total Direct Hotel Spend
2013 San Francisco Citywide Group Market Share In 2013: 2.7M Group RNs in San Francisco Citywide Group Contributions RNs generated by Moscone Center 852,602 23.63% Direct Spend Number Moscone RNs 2,755,230 76.37% Other Group RNs
Compression Study Bottom Line Impact on hotels regardless of whether or not they contracted a block. Conventions help ALL the hotels in the San Francisco Market Hotels in all zones feel compression when a group using Moscone has between 1,380 committed rooms and 2,350 committed rooms Groups using more than 6,000 rooms drive significantly large RevPAR gains for hotels in all regions of the city from 10% gains to nearly 150% gains over what would be expected for that day and month Groups which can be classified as Scientific, Engineering, Technical, Computer, or Trade Shows & Expositions / Show Producers generally show the most rapid increases in RevPAR as their size increases. On average, an additional 500 in these room blocks moves RevPAR 4.4% from median MDOW RevPAR for hotels in TID Zone 1 Source: STR & SFTA
North America Meetings Market
North America Meetings Market DMO Perspective Room Nights 2013 2014 2015 2016 2017 2018 Def. RNs 27.5 M 24.5 M 17.1 M 12.9 M 9.7 M 7.4 M Pace Target 26.7 M 23.6M 18.7 M 15.2 M 12.1 M 9.4 M Source: Trends, Analysis & Projections, June 2014 Pace % 104% 104% 92% 85% 80% 78% Benchmark 26.8 M 25.3 M 25.3 M 25.3 M 25.3 M 25.3 M Demand 101 M 91.3 M 76.1 M 57.1 M 38.9 M 31.9 M Lost 73.4 M 66.8 M 58.9 M 44.2 M 29.2 M 24.5 M Conversion 27% 27% 23% 23% 25% 23%
Current North American Meeting Market Trends Short-term group commitments very strong North American market pace is at 92% for 2015 and 85% for 2016 2017 and 2018 are now back over 80% after dipping below 80% for most of 2013 Expect most out years to be above 80% by YE 2014 Up cycle means DRMs, DOSMs and chains are aggressive on room allotments and pricing Cities that balance that aggression with the need for a strong group base for future years will ride out the next downturn with the most success. Mid-West is pacing ahead of East AND West Coast for some years During the downturn the West Coast was definitely the pace leader
San Francisco Room Night Pace
San Francisco Meetings Market DMO Perspective Source: Trends, Analysis & Projections, June 2014 Moscone RN s Room Nights 2013 2014 2015 2016 2017 2018 Def. RNs 934 K 1.01 M 867 K 910 K 773 K 795 K Pace Target 887 K 888 K 858 K 819 K 765 K 710 K Pace % 105% 115% 101% 111% 101% 112% Benchmark 887 K 891 K 891 K 891 K 891 K 891 K Demand 3.3 M 3.4 M 3.5 M 3.1 M 2.5 M 2.1 M Lost 2.4 M 2.4 M 2.6 M 2.2 M 1.7 M 1.3 M Conversion 28% 29% 25% 29% 31% 38%
Top 25 US Markets: Occupancy, ADR & RevPAR
2013 Performance in Top 10 Markets Market Occupancy % ADR $ RevPAR $ New York 84.6 259 219 U.S. Hotel Industry 62.3% Occupancy $110 ADR $69 RevPAR Oahu Island 83.7 209 175 San Francisco/San Mateo 83.0 188 156 Miami 78.0 177 138 Los Angeles 76.8 137 105 Anaheim 74.9 127 95 Boston 73.2 164 120 Source: STR Monthly Hotel Review; December 2013 Seattle 72.9 126 120 San Diego 71.6 136 97 Orlando 71.0 102 72
June 2014 YTD Performance in Top 10 Markets Market Occupancy % ADR $ RevPAR $ Oahu, HI 83.6 215 180 U.S. Hotel Industry 71.7% Occupancy $116.20 ADR $83.27 RevPAR New York 82.6 246 203 San Francisco 82.0 195 160 Miami 81.3 202 165 YOY Growth 3.3% Occupancy 4.1% ADR 7.5% RevPAR Los Angeles 79.1 144 114 Orlando 76.9 113 87 Anaheim 76.0 132 101 San Diego 74.4 138 102 Denver 74.0 109 80 Houston 74% 110 81 Source: STR Monthly Hotel Review; June 2014
San Francisco Market: Occupancy & ADR
Occupancy and Average Rate Smith Travel Research Forecast (Tourism Economics) Year Occ % Chg ADR % Chg RevPar % Chg 2011 79.0% +5.1% $154.89 +13.8% $122.37 +19.6% 2012 80.4% +1.7% $171.69 +10.8% $137.96 +12.7% 2013 83.00% +3.3% $187.78 +9.4% $155.83 +12.9% 2014 F 84.3% +1.8% $20\3.78 +8.5% $171.87 +10.5% 2015 F 86.4% +2.5% $217.44 +6.7% $187.92 +9.3% 2016 F 87.0% -0.6% $233.88 +7.6% $203.42 +8.2% 2017 F 88.4% -1.7% $243.04 +3.9% $214.91 +5.6% Source: STR/Tourism Economics, August 2014
New Supply San Francisco MSA
New Supply San Francisco MSA 3,622 rooms are in various planning stages for the San Francisco MSA (6% of current inventory) Projected opening dates between 2015-2017 2,369 room are in planning stages for the city and county of San Francisco (7% of current inventory) Projected opening dates between 2015-2017 312 rooms under construction (174 in San Francisco and 138 in Menlo Park) Upper Midscale Chains and Independents Planning stages include: Planning Permit Issued, Building Permit Issued, Pre-Planning, Planning, Final Planning, Construction ~ 5-7 Years
Project Name City Room Count Hampton Inn San Francisco 174 Unnamed Hotel San Francisco - SFO 400 SOMA Hotel San Francisco unknown location 250 Vantaggio Suites Cosmo San Francisco 21 Unnamed Hotel San Francisco Mission Bay 250 Hotel SOMA San Francisco East & West SOMA 75 + 300 Unnamed Hotel San Francisco Market Street 150 Unnamed Hotel San Francisco Yerba Island Road 50 Unnamed Hotel San Francisco Market Street 310 Unnamed Hotel San Francisco Fourth & Clementia St. 220 Unnamed Hotel San Francisco King Street 135 Unnamed Hotel San Francisco Market Street 198 Building 105 Hotel San Francisco Presidio 36
Downtown San Francisco Occupancy
SF Market Versus SF Downtown Occupancy Performance YTD June 2014 Source: STR & SFTA SF City & County % +2% Transient +0.6 % Group +5.4 % Airline Crew SOMA +9.1% Transient - 3.1 % Group -12% Airline Area Transient Group Total SF Only 56.2 23.0 82.8 Market Street 52.4 23.4 82.1 Convention Center 49.6 31.7 84.6 Union Square 54.7 24.2 82.1 SOMA 49.9 30.3 82.5 Financial District 57.8 22.4 84.4 Nob Hill 50.9 24.5 80.7 Fisherman s Wharf 72.1 12.3 85.5 Civic Center 59.2 11.2 82.7 San Mateo 50.4 19.7 80.0 SFO 55.8 15.3 83.2 Oakland/Hayward 56.1 15.5 75.7 Marin 56.9 18.5 75.5
Downtown San Francisco ADR
SF Market Versus SF Downtown ADR Performance YTD June 2014 Source: STR & SFTA SF City & County % +12.6% Transient +7.8% Group +19.2 % Airline Crew SOMA +13.6% Transient +9.0 % Group +16.6% Airline Area Transient Group Total SF Only 218.99 221.71 216.67 Market Street 226.40 227.41 224.53 Convention Center 264.44 253.06 257.27 Union Square 210.57 222.89 212.85 SOMA 259.07 239.77 248.46 Financial District 279.50 243.55 264.15 Nob Hill 304.56 272.92 286.66 Fisherman s Wharf 203.54 195.38 201.98 Civic Center 155.05 137.11 146.96 San Mateo 184.97 149.57 162.29 SFO 151.11 139.76 142.47 Oakland/Hayward 120.18 111.95 115.38 Marin 153.63 193.84 163.44
Day of Week Occupancy
SF Market Versus SF Downtown Day-of-Week Perspective YTD June 2014 Source: STR & SFTA DOW Sun Mon Tue Wed Thu Fri Sat SF Only Market Street Convention Center Union Square SOMA Financial District Nob Hill Fisherman s Wharf Civic Center SFO Oakland/ Hayward Marin 73.4 82.0 88.6 88.3 83.6 80.1 83.8 81.7 85.6 93.5 93.8 92.0 78.9 82.6 73.5 85.5 91.9 91.3 86.0 80.8 83.4 72.6 81.9 88.4 87.8 82.9 79.0 82.6 71.8 82.6 90.1 89.6 83.6 78.4 81.9 73.4 84.7 90.9 90.2 86.8 81.3 83.7 69.9 79.2 86.8 86.8 82.0 78.3 82.2 77.5 83.8 89.7 90.2 85.4 83.8 88.2 75.5 79.7 85.5 86.1 82.9 82.5 86.6 67.1 84.0 91.9 89.8 82.7 72.2 73.0 71.4 84.4 91.6 90.7 87.2 79.3 78.3 62.0 74.5 83.3 82.0 76.3 75.1 77.2
Economic Impact Calculator (EIC) Update
Economic Impact What is it? DMOs often estimate the financial impact of conventions, meetings and events These estimates help quantify the impact of particular events and of the industry as a whole The Economic Impact Calculator measures the spending of participants, meeting planners and exhibitors The tool calculates total room nights sold based on the duration, number of attendees, occupants per room and average length of stay Visitor data is based on both overnight and day visitors generates by the event
Economic Impact Factors Total Economic Impact = Direct Spend + Indirect +Induced Spend Induced Impact: individuals employed thru direct spending and using that income locally in the grocery store, cleaner, gas station, etc. Indirect Impact: Spending on local suppliers who provide goods & services, such as restaurant suppliers Direct Spending
Direct Spend Meeting Organizer, Attendee and Exhibitor Spending Local spending by exhibitors on booth, entertainment, etc. Local spending on lodging, dining, entertainment, retail, local transit, etc. Local spending by meeting organizers
What does the EIC show? San Francisco s Travel Association provides full economic impact analysis including: Business sales by industry and source Impacts of sales on jobs, wages and taxes ROI of the event against hosting costs City specific data Let us know if you would like to have your event analyzed! Let s have a Look
Thank you Nicole Halmer Sr. Director Market Strategy & Research nhalmer@sanfrancisco.travel 415-227-2692