Hotel Association of North Texas Karrie Keen Director, Destination and Trend Operations
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Agenda U.S. Overview U.S. Chain Scales Texas Region Overview Dallas and Fort Worth-Arlington Overview Development Pipeline & Performance Projections
U.S. Overview
The U.S. Continues on its Path of Improvement % Change Hotels 52.3 k Room Supply 1.0 bn 0.4% Room Demand 638.7 mn 3.2% Occupancy 62.3% 2.9% ADR $105.53 4.3% RevPAR $65.77 7.3% Room Revenue $67.4 bn 7.7% Total US - Key Statistics YTD July 2012
Demand Growing at a Slower Pace 10 8 6 June 89 5.2% Supply % Change Demand % Change Feb 11 7.7% 4 2 0-2 -4-6 Jan 89 4.5% Oct 91-0.9% Mar 02-4.6% -8 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Room Supply/Demand Percent Change Twelve Month Moving Average 1989 to July 2012 Aug 06-0.2% Aug 09-7.0% 3.7% 0.4%
ADR Growth Outpacing Occupancy Growth 10 8 6 4 2 0-2 -4-6 -8-10 -12 Jan 92 0.1 June 91-3.4 Occ % Chg ADR % Chg Mar 02-6.7 Aug 02-4.5 Oct 06 7.5 Sept 09-9.6 Jan 10-8.9 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Occupancy/ADR Percent Change Twelve Month Moving Average 1989 to July 2012 Apr 11 6.2 4.1% 3.4%
Slowly Creeping Up to Peak Levels 120 110 100 Occ (%) ADR ($) Peak $107.71 Sept 2008 90 80 70 60 50 Peak 64.5% Feb 1997 $104.31 July 2012 61.0% July 2012 Occupancy and ADR Twelve Month Moving Average July 2012
Millions Transient Demand Continues to Outpace Prior Year Demand 25 2007 2008 2009 2010 2011 2012 20 15 10 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels). Monthly Transient Demand 2007 Through July 2012
Transient ADR Still Lagging Behind Peak $200 $190 2007 2008 2009 2010 2011 2012 $180 $170 $160 $150 $140 $130 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels). Monthly Transient ADR 2007 Through July 2012
Millions Group Demand Higher in June than Previous Years 12 11 2007 2008 2009 2010 2011 2012 10 9 8 7 6 5 4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels). Monthly Group Demand 2007 Through July 2012
Group ADR Still Seeing Effects of ADR Declines $180 2007 2008 2009 2010 2011 2012 $170 $160 $150 $140 $130 $120 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels). Monthly Group ADR 2007 Through July 2012
Transient ADR Pushes Premium to Group ADR $200 $180 Transient Group $160 $140 $120 2007 2008 2009 2010 2011 2012 NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels). Transient vs. Group Monthly ADR ($) January 2007 July 2012
Rate Disparity Starting to Normalize $180 $170 $160 $150 $140 $176.18 $173.73 $148.93 $156.25 2007 2008 2009 2010 2011 2012 $164.13 $171.69 2007 - $33.61 2008 - $32.46 2009 - $12.14 2010 - $20.31 2011 - $25.49 2012 - $30.08 $143.72 $141.61 $140.12 $138.64 $136.79 $135.94 $130 Transient Actual ADR ($) by Customer Segment Year to Date 2007- July 2012 Group NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels).
Dallas Reported Fourth Highest Room Supply Growth 5 4 3 2 1 0-1 -2 Room Supply Percent Change July 2012 YTD
Dallas in the Top 10 Among Demand Growth 12 10 8 6 4 2 0-2 Room Demand Percent Change July 2012 YTD
U.S. Chain Scales
Upper Midscale Reporting the Most Growth 10 8 6 4 2 0-2 -4-0.5 3.0 2.8 0.1 1.6 4.2 3.6 6.9 Supply -1.9 Demand 1.6-0.3-6 -8 Luxury Upper Upscale Upscale Upper Midscale -5.4 Midscale Economy Supply / Demand Percent Change July YTD 2011
Positive Results Across the Board 6 4 2 3.6 74.2% 4.8 $269.54 4.6 4.3 $116.34 $153.60 2.6 2.5 72.2% 72.1% 3.2 64.0% 3.8 $96.97 3.6 55.7% 2.6 $74.25 2.0 55.0% 4.1 $52.02 0 Occupancy ADR -2 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Occupancy / ADR Percent Change July 2012 YTD
Double Digit Room Revenue Growth for Upper Midscale 15 RevPAR 10.9 Room Revenue 10 8.5 7.9 9.0 7.1 7.2 7.2 7.0 6.3 6.1 5.7 5 0.6 0 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy RevPAR / Room Revenue Percent Change July 2012 YTD
Texas Region Overview
All Markets in Texas Report New Supply Texas West Texas North San Antonio Dallas Ft Worth-Arlington Houston Texas South Texas East Austin 0.3 0.7 0.7 0.8 1.2 1.7 2.0 2.1 2.9 Supply Percent Change July YTD 2011 0 1 2 3 4
Houston Leading the State in Demand Growth Houston Texas West Texas South San Antonio Texas North Dallas Texas East Austin Ft Worth-Arlington 2.4 2.3 4.1 4.0 8.3 7.9 7.4 7.2 10.7 Demand Percent Change July YTD 2011 0 2 4 6 8 10 12
All Markets Reporting Occupancy Growth Despite New Supply Houston Texas South San Antonio Texas West Texas North Texas East Dallas Austin Ft Worth-Arlington 1.0 2.2 2.7 3.2 4.9 5.3 5.2 7.2 9.8 0 2 4 6 8 10 12 Occupancy Percent Change July 2012 YTD
Texas West Pushing Rates the Hardest Texas West Texas South Texas North Austin Houston Texas East San Antonio Dallas Ft Worth-Arlington -1.3 0.2 1.4 2.1 3.5 5.4 6.6 7.9 21.0-5 0 5 10 15 20 25 ADR Percent Change July 2012 YTD
Texas West Wins Top Spot in RevPAR Growth Texas West Texas South Houston Austin Texas North San Antonio Texas East Dallas Ft Worth-Arlington -0.3 2.9 7.7 6.7 6.7 5.4 13.7 15.6 27.3-5 0 5 10 15 20 25 30 RevPAR Percent Change July 2012 YTD
Oil Boom Helping Grow Revenue in Texas West Texas West Texas South Houston Texas North San Antonio Austin Texas East Dallas Ft Worth-Arlington 0.9 4.6 6.2 8.0 8.9 14.6 14.2 16.4 31.0 0 5 10 15 20 25 30 35 Room Revenue Percent Change July 2012 YTD
Dallas Market/Sub-Market Overview
Upper Upscale Leading Growth Among the Chain Scale 10 8 Supply Demand 6 4 5.2 5.4 3.7 3.6 4.3 2 0-2 -4-6 -0.2 0.4 Luxury Upper Upscale -0.5 Upscale Upper Midscale 0.8 1.1-1.7-4.5 Midscale Economy Supply / Demand Percent Change July YTD 2011
Highest ADR Growth Among Economy Properties 6 5 4 3 2 Occupancy ADR 4.2 68.0% 5.5 52.8% 2.8 62.4% 3.8 $38.39 1 0-1 -2 0.6 65.5% -0.8 Luxury 0.3 0.0 $196.33 64.3% $127.05 Upper Upscale 0.6 $97.63 Upscale 0.7 59.1% $79.69-0.7 Upper Midscale 0.6 $62.67 Midscale Economy Occupancy / ADR Percent Change July 2012 YTD
Luxury Segment Reporting a Slight Decline in Revenue 10 5 5.5 4.8 4.3 3.6 6.1 6.7 4.9 1.4 0-0.2-0.4 0.3-0.1 RevPAR Room Revenue -5 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy RevPAR / Room Revenue Percent Change July 2012 YTD
Highest Supply Growth in the Downtown Area (Omni) Dallas/Market Center Irving South/Grand Prairie East Plano/Richardson Dallas, TX Denton/Lewisville/McKinney Irving North Addison/LBJ Freeway West Plano/ Frisco Dallas South/East Farmers Branch/Stemmons Fwy N -0.1-0.1-0.5-1.2 0.0 0.4 1.9 1.7 2.4 7.1-2 0 2 4 6 8 Supply Percent Change July YTD 2011
More Rooms Available Downtown Allows for Higher Growth Dallas/Market Center Dallas South/East Irving South/Grand Prairie Addison/LBJ Freeway Dallas, TX Farmers Branch/Stemmons Fwy N Denton/Lewisville/McKinney East Plano/Richardson Irving North West Plano/ Frisco -4.6-0.9-0.4 0.1 2.6 4.7 4.4 7.3 8.0 8.8-6 -4-2 0 2 4 6 8 10 Demand Percent Change July YTD 2011
West Plano/Frisco 2 nd Highest Occupancy Despite Decline Dallas South/East 53.4% Irving South/Grand Prairie 63.6% 4.8 Addison/LBJ Freeway Denton/Lewisville/McKinney Farmers Branch/Stemmons Fwy N Dallas, TX Dallas/Market Center Irving North East Plano/Richardson West Plano/ Frisco -4.6-2.2 65.9% -0.9 58.5% 61.8% 67.4% 62.1% 57.9% 1.5 66.1% 64.8% 2.7 3.8 4.8 4.7 8.6-6 -4-2 0 2 4 6 8 10 Occupancy Percent Change July 2012 YTD
Downtown Area Remains Flat West Plano/ Frisco $101.06 Denton/Lewisville/McKinney Dallas South/East Irving North East Plano/Richardson Irving South/Grand Prairie Dallas, TX Dallas/Market Center Addison/LBJ Freeway Farmers Branch/Stemmons Fwy N -3.7-2.9 $66.76 $80.36 $94.10 $72.64 $76.55 $86.76-0.1 $61.14-5 -4-3 -2-1 0 1 2 3 4 0.4 0.3 0.2 $124.15 0.7 1.1 $63.87 3.2 3.6 ADR Percent Change July 2012 YTD
Occupancy Growth Pushing RevPAR Growth for Dallas South/East Dallas South/East Denton/Lewisville/McKinney Irving South/Grand Prairie Dallas, TX Addison/LBJ Freeway Dallas/Market Center Farmers Branch/Stemmons Fwy N Irving North West Plano/ Frisco East Plano/Richardson -1.9-1.1-0.2 0.0 1.7 1.4 2.9 5.1 8.1 9.8-5 0 5 10 15 RevPAR Percent Change July 2012 YTD
Over Half the Submarkets Report Revenue Growth Dallas South/East 9.2 Dallas/Market Center 8.6 Denton/Lewisville/McKinney 8.5 Irving South/Grand Prairie Dallas, TX Addison/LBJ Freeway 1.7 4.6 7.6 East Plano/Richardson 0.0 Irving North -0.2 Farmers Branch/Stemmons Fwy N -1.1 West Plano/ Frisco -1.2-5 0 5 10 Room Revenue Percent Change July 2012 YTD
Transient Occupancy Trending Higher Than Group 45 40 35 30 25 20 15 10 5 Transient 0 2007 2008 2009 2010 2011 2012 Transient vs. Group Monthly Occupancy (%) January 2007 July 2012 Group NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels).
Transient ADR Pushes Past Group ADR in 2012 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 $155.04 $154.82 $144.00 $146.71 $139.13 $133.90 $136.07 $139.02 $143.01 $136.73 $129.16 $130.11 Transient Actual ADR ($) by Customer Segment Year to Date 2007- July 2012 2007 2008 2009 2010 2011 2012 Group NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels).
Rooms In Construction Down by Half Phase July 2012 July 2011 Difference % Change In Construction 755 1,550-795 -51.3% Planned Pipeline 3,942 4,627-685 -14.8% Active Pipeline 4,697 6,177-1,480-24.0% Planned Pipeline includes projects in Final Planning and Planning phases Active Development Pipeline Rooms Change From Last Year
Properties In Construction Property Name Rooms Tract Projected Open Date Unnamed Hotel @ McKinney Gateway 186 Denton/Lewisville/McKinney N/A Homewood Suites Dallas Downtown 130 Dallas/Market Center June 2013 Home2 Suites Dallas Frisco 122 West Plano/Frisco October 2012 Luxury Collection The Joule Hotel 121 Dallas/Market Center December 2012 Hampton Inn & Suites Trophy Club 93 Denton/Lewisville/McKinney May 2013 NYLO Dallas South Side 76 Dallas/Market Center August 2012 Spa Castle Hotel 27 Denton/Lewisville/McKinney September 2012
Fort Worth-Arlington Market/Sub-Market Overview
Midscale Properties Reporting Declines 10 8 6 4 2 0-2 -4-6 -8-10 Supply Demand 6.1 4.2 4.7 4.0 3.6 2.0 0.0-0.3-8.1-8.8 Upper Upscale Upscale Upper Midscale Midscale Economy Supply / Demand Percent Change July YTD 2011
ADR Growth Among the Economy Properties 5 4 3 2 1 0-1 -2-3 -2.0 4.1 Occupancy ADR 62.3% 72.4% 66.4% $109.14 52.1% -0.3-0.2-0.4 $71.04 $93.21 $150.96 Upper Upscale Upscale Upper Midscale Midscale Economy -1.4 0.7 0.0 1.1 58.5% 0.9 $41.43 Occupancy / ADR Percent Change July 2012 YTD
Midscale Segment Seeing Room Revenue Declines 10 RevPAR 5 0 3.6 2.7 4.7 0.7 Room Revenue 2.0 5.6-0.6-5 -2.3-2.3-10 Upper Upscale Upscale Upper Midscale Midscale Economy -8.1 RevPAR / Room Revenue Percent Change July 2012 YTD
Demand Growth Exceeding Supply Growth for Most 10 8 8.9 Supply Demand 6 4 2 1.2 2.3 1.2 3.0 3.2 3.6 2.5 2.4 0-2 -0.2 0.0-4 Fort Worth- Arlington, TX -3.0 Bedford/Grapevine Fort Worth South/West Arlington, TX Downtown/I-820 West Fort Worth North Supply / Demand Percent Change July YTD 2011
Fort Worth North Only Area Report ADR Improvement 10 8 6 7.6 49.6% Occupancy ADR 4 2 0-2 -4 1.0 61.5% $91.17-1.3 Fort Worth- Arlington, TX 66.4% -2.8 $116.63-0.7 Bedford/Grapevine Fort Worth South/West 3.0 60.1% $61.99 $77.31-1.7-1.6 Arlington, TX 0.3 64.2% $109.84-1.1 Downtown/I-820 West -0.1 2.5 $69.53 66.7% Fort Worth North Occupancy / ADR Percent Change July 2012 YTD
Fort Worth South/West Report Highest Gains 10 RevPAR 7.0 Room Revenue 5 5.7 4.9 0.9 1.4 1.4 2.5 2.3 0-0.3-0.7-5 -3.4-3.7 Fort Bedford/Grapevine Worth-Arlington, TX Fort Worth South/West Arlington, TX Downtown/I-820 West Fort Worth North RevPAR / Room Revenue Percent Change July 2012 YTD
Group Segment Stronger than Transient 60 50 40 30 20 10 Transient Group 0 2007 2008 2009 2010 2011 2012 NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels). Transient vs. Group Monthly Occupancy (%) January 2007 July 2012
Group Rates Exceed Transient Rates Since 2007 $160 $155 $150 $145 $140 $135 2007 2008 2009 2010 2011 2012 $156.96 $157.03 $157.13 $153.97 $153.37 $151.89 $148.76 $148.07 $147.60 $146.32 $140.11 $137.12 $130 $125 Transient Actual ADR ($) by Customer Segment Year to Date 2007- July 2012 Group NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels).
Minimal New Supply Phase July 2012 July 2011 Difference % Change In Construction 186 508-322 -63.4% Planned Pipeline 1,669 1,750-81 -4.6% Active Pipeline 1,855 2,258-403 -17.8% Planned Pipeline includes projects in Final Planning and Planning phases Active Development Pipeline Rooms Change From Last Year
New Supply Downtown Property Name Rooms Tract Projected Open Date Homewood Suites Fort Worth Medical Center 122 Downtown/I-820 West July 2013 Comfort Suites @ Lake Worth 64 Downtown/I-820 West August 2012 Properties In Construction
Development Pipeline & Performance Projections
Starting to See More Rooms In Construction Than Prior Years Phase July 2012 July 2011 Difference % Change In Construction 61,490 54,825 6,665 12.2% Planned Pipeline 239,464 268,245-28,781-10.7% Active Pipeline 300,954 323,070-22,116-6.8% Planned Pipeline includes projects in Final Planning and Planning phases Active Development Pipeline Rooms Change From Last Year
Upscale and Upper Midscale Remain a Popular Segment 100 90 80 70 60 50 40 30 20 10 0 2.4 5.3 4.0 4.7 8.2 0.9 Luxury Upper Upscale In Construction Final Planning Planning 19.2 37.0 19.6 18.8 Upscale Active Pipeline by Chain Scale In Thousands July 2012 26.9 42.9 Upper Midscale 60.9 5.3 14.9 1.1 13.2 1.6 2.4 1.3 10.3 Midscale Economy Unaffiliated
Unemployment Decreasing but Still Affects Travel 2011 2012F 2013F Real GDP +1.7% +2.3% +2.6% CPI +3.2% +2.4% +2.2% Corporate Profits +7.9% +5.0% +5.8% Disp. Personal Income +1.3% +1.4% +1.9% Unemployment Rate 8.5% 8.2% 7.7% U.S. Economic Outlook Blue Chip Economic Indicators April 2012
Supply Slowly on the Rise 10 8 6 4 2 0-2 -4-6 -8-0.1 2.8 0.2 Supply % Chg 0.4 1.2 0.7 Demand % Chg 2.4-2.5 2.9-6.2 1.7 7.2 4.9 0.5 0.5 2.0 1.8 1.7 1.1 1.5 2005 2006 2007 2008 2009 2010 2011 2012P 2013P 20 Yr Average Supply/Demand Percent Change 2005 2013P
Occupancy Growing at a Slower Pace 70 65 63.0 63.1 62.8 60 59.8 60.0 60.9 61.4 57.5 55 54.6 50 2005 2006 2007 2008 2009 2010 2011 2012P 2013P 2.8 0.2-0.5-4.8-8.8 5.4 4.3 1.5 0.7 Occupancy Percent 2005 2013P
More Growth for ADR $125 $100 $97.82 $104.32 $107.40 $98.07 $98.06 $101.70 $105.74 $110.63 $91.04 $75 $50 2005 2006 2007 2008 2009 2010 2011 2012P 2013P 5.6 7.4 6.6 3.0-8.7 0.0 3.7 4.0 4.6 Average Daily Rate (In Dollars) 2005 2013P
ADR Best Chance to Grow RevPAR Outlook 2012 Forecast 2013 Forecast Supply 0.5% 1.1% Demand 2.0% 1.8% Occupancy 1.5% 0.7% ADR 4.0% 4.6% RevPAR 5.5% 5.4% Total United States Key Performance Indicator Outlook (% change vs. Prior Year) 2012-2013
Highest RevPAR Growth Expected for the Luxury Scale 2012 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (%chg) Luxury 2.6% 5.1% 7.9% Upper Upscale 1.5% 4.2% 5.7% Upscale 2.3% 4.6% 7.1% Upper Midscale 1.4% 4.0% 5.5% Midscale 2.8% 1.4% 4.3% Economy 1.4% 3.1% 4.5% Independent 0.5% 3.5% 4.0% Total United States 1.5% 4.0% 5.5% Chain Scale Key Performance Indicator Outlook 2012F by Chain Scale
What if ADR Grew at the Rate of Inflation? $120 $110 $100 $90 $84.66 Nominal ADR $87.07 $88.45 $90.46 If year 2000 ADR had increased by CPI each year Yr 2000, Grown by CPI $92.87 $96.02 $99.12 $105.85 $107.21 $105.48 $101.94 $115.29 $112.91 $110.59 $80 $84.66 $83.62 $82.54 $82.67 $86.19 $91.04 $97.82 $104.32 $107.40 $98.07 $98.06 $101.70 $105.74 $110.63 Note: 2011 & 2012 CPI forecast from Blue Chip Economic Indicators Actual vs. Inflation Adjusted 2000 2013F
Karrie@str.com or 615.824.8664 x3331