The European Hotel Market - PDF Free Download

The European Hotel Market Boutique and Lifestyle Hotel Summit 2017 Sophie Colvin Business Development scolvin@str.com 2016 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.

STR, collecting data since 1985 Performance Reports Occ, ADR, RevPAR Supply/Demand Revenue P&L Supply Reports Existing supply Future supply Pipeline Characteristics Forecast Reports Main KPIs Macro economic input Micro economic input 5 years/6 quarters/18 months STR Coverage Our Sample +56K Hotels +7.6M Hotel Rooms +182 Countries +2K Markets 2017 STR. All Rights Reserved.

Supply and demand equilibrium a mixed picture Global Supply & Demand % Change 2016 Supply Demand 4.4% 5.1% 1.6% 1.7% 0.4% 3.5% 3.2% 0.9% 1.4% 2.1% 1.0% 3.4% 1.6% 2.7% -2.3% -2.6% North America & Caribbean Central America South America Europe Middle East Africa Asia Australia & Oceania

2016 was a good year for most regions except the Middle East USD, Europe in EUR, Constant Currency, Full Year 2016 North America +3.5% Central America +2.2% Northern Africa +6.5% Europe +2.1% Middle East Asia -9.2% -0.3% South America +5.3% Southern Africa +6.8% Australia & Oceania +3.5%

Europe

A steady year Europe Euro, Constant Currency, 2016 70.4% Occupancy +0.6% 111.8 ADR +1.5% 78.7 RevPAR +2.1%

Mainly positive, but terror effect clearly visible Local Currency RevPAR % Change 2016 Helsinki 7 15 St. Petersburg 7 Edinburgh 16 Copenhagen 14 Moscow Dublin 16 Amsterdam 3 London -1-18 Brussels 3 Berlin 11 5 Prague Warsaw Paris -13-3 0 Vienna Zurich Budapest 9 12 Bucharest Barcelona 10 Lisbon 8 7 Madrid Rome 2 10 Belgrade -37 6 Athens Istanbul

Trading down across the continent? Europe Occupancy and ADR % Change, Constant Currency 2016 Occupancy ADR 3.2% 3.3% 2.5% 0.4% 1.0% 1.1% 1.1% 1.0% -0.3% -2.2% Luxury Upper Upscale Upscale Upper Midscale Midscale & Economy

A positive start to 2017 Europe Euro, Constant Currency, March 2017 YTD 63.5% 100.9 64.1 Occupancy ADR RevPAR +4.1% +2.3% +6.5%

Europe is mostly green Local Currency RevPAR % March 2017 YTD Helsinki 5 2 St. Petersburg 7 Edinburgh 18 Copenhagen 3 Moscow Dublin 6 Amsterdam 5 London 11 5 Brussels 6 Berlin 17 7 Prague Warsaw 16 Kiev Paris 16-6 3 Vienna Zurich Budapest 9 8 Bucharest Barcelona 14 Lisbon 20 10 Madrid Rome 3 13 Belgrade 12 Athens -8 Istanbul

Europe Branded vs. Unbranded by Class Euro, Constant Currency, RevPAR % Change, March 2017 YTD RevPAR %Chg Branded RevPAR %Chg Unbranded 10.1% 3.4% 5.8% 7.4% 4.2% 7.9% 8.1% 4.9% 6.4% 5.8% Luxury Upper Upscale Upscale Upper Midscale Midscale & Economy

Europe a positive long term picture EUR, CC, R12, December 2005 March 2017 10% Occupancy % change ADR % change RevPAR % change 5% 0% -5% 80 months of positive RevPAR Growth!!! -10% -15% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Focus on key European markets

2017 Forecast a good year expected!

Hot market Barcelona: Demand outpaces supply

Brussels - occupancy beginning to recover % change Previous Year Occupancy ADR 100% 80% 60% 40% 20% 0% -20% -40% 2016 Brussels bombing Nice attack -60% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb EUR

Paris occupancy and ADR starting to stabilize? % change Previous Year Occupancy ADR 100% 80% 60% 40% 20% 0% -20% -40% 2016 Brussels bombing Euro football Nice attack -60% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb EUR

London - High occupancy & yield nights declined significantly Compression analysis 2016 160 180 Day Count 140 120 100 80 60 40 33% -17% 160 140 120 100 80 60 40 ADR ( ) 20 20 0 0 <70 70>=80 80>=90 >=90 Occupancy (%) Day Count ADR ( )

Pipeline

Europe Pipeline, Top 10 March 2017 Report, Pipeline by Room Count Existing Pipeline Poland Switzerland Netherlands Russia Turkey France United Kingdom Spain Germany 0 100 200 300 400 500 600 700 Thousands

UK Pipeline What 478 projects and 47k new rooms looks like in London

The Airbnb effect on hotel performance

Markets included: Boston Los Angeles Miami New Orleans San Francisco Seattle Washington, D.C. Barcelona London Mexico City Paris Sydney Tokyo üclick HERE to download

Largest Lodging Companies by Rooms/Listings

Largest Lodging Companies by Rooms/Listings Less Unavailable, Shared Rooms, Private Rooms and Large Listings

Percent of Airbnb Demand for 7+ Days Airbnb travellers typically have longer length of stay than hotel guests

Hotel Supply and Demand Growth July 2016, 12-Month Moving Average

Hotel and Airbnb Occupancy July 2016, 12-Month Moving Average

US Hotel and Airbnb ADR July 2016, 12-Month Moving Average

Airbnb Analysis Conclusion Airbnb has more room to grow in most markets whereas hotels have already carved out an established presence Airbnb occupancy generally was the highest in markets where hotels had high occupancy. Hotel occupancy was significantly higher than Airbnb occupancy. While Airbnb s share of total accommodation supply (Airbnb units & hotel rooms) was growing its share of market demand and revenues still was generally below. Airbnb guests typically stayed longer than the average hotel guest, with roughly half of Airbnb room nights coming from trips of seven days or longer.

Thank You! sales@str.com @SColvin_STR www.strglobal.com 2016 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.