HOTEL INDUSTRY OVERVIEW Texas
DEMAND GROWTH STRONG BALANCED OCC & ADR GROWTH % Change Room Supply* 149M 1.3% Room Demand* 92M 5.6% Occupancy 61.6% 4.3% A.D.R. $90 4.4% RevPAR $55 8.9% Room Revenue* $8.3B 10.3% Full year 2012, Texas Results * All Time High
REVPAR GROWTH STRONG, BUT SLOWING 10.1 14.5 12.2 12.3 8.7 10.4 8.8 9.4 14.4 8.5 12.2 9.8 10.0 12.0 10.4 10.3 9.7 9.2 8.2 11.0 10.4 9.6 RevPAR 2011: 10.9% 1.2 RevPAR 2012: 8.9% 4.4 Jan-11 Jul-11 Jan-12 Jul-12 * Total TX, RevPAR % Change, by Month, 1/11 12/12
TEXAS MARKETS MIXED GROWTH PATTERNS 9.4 7.5 Occupancy ADR 3.5 4.0 4.1 1.0 2.5 1.6 1.2-0.2 Dallas Houston Austin Fort Worth San Antonio *OCC / ADR % Change, by Market, 2012
TEXAS MARKETS SUPPLY & DEMAND GROWTH 10.4 Supply Demand 5.0 5.8 3.3 2.8 1.4 0.9 0.7 1.2 1.6 Dallas Houston Austin Fort Worth San Antonio *Supply / Demand % Change, by Market, 2012
REVPAR STILL BELOW PEAK IN MOST TEXAS MARKETS $55 $53 $67 $62 $74 $77 $60 Peak 2012 $68 $62 $55 Dallas Houston Austin Fort Worth San Antonio *RevPAR $, by Scale, 2007 & 2012 **Upper Mid / Midscale: Same Store Basis to Account for Best Western Reclassification
UNDER CONSTRUCTION ROOMS MOSTLY IN MIDDLE SEGMENTS 1.9 1.0 1.2 0.6 0.4 0.4 0.0 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated *TX Pipeline, Rooms Under Construction, 000s Rooms, by Scale, YE 2012
TEXAS MARKETS UNDER CONSTRUCTION ROOMS 1,953 494 175 122 0 Dallas Houston Austin Fort Worth San Antonio *TX Pipeline, Rooms Under Construction, YE 2012
FAVORABLE SUPPLY / DEMAND FUNDAMENTALS FOR 2013 16 12 8 4 0 11.0% 10.1% -4-8 -3.4% Supply Demand -12-10.1% Total TX, Supply & Demand % Change, 12 MMA 1/2001 12/2012
ADR GROWTH ON THE RISE 10 9.2% 5 4.4% 0-5 -2.5% Demand ADR -7.1% -10-8.7%
MARKET SEGMENTS
Millions TEXAS: MONTHLY TRANSIENT DEMAND 2007 THROUGH DECEMBER 2012 10 2007 2008 2009 2010 2011 2012 5 0 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).
TEXAS: MONTHLY TRANSIENT ADR 2007 THROUGH DECEMBER 2012 $110 2007 2008 2009 2010 2011 2012 $100 $90 $80 $70 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).
Millions TEXAS: MONTHLY GROUP DEMAND 2007 THROUGH DECEMBER 2012 4.0 3.5 3.0 2.5 2.0 1.5 2007 2008 2009 2010 2011 2012 1.0 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).
TEXAS: MONTHLY GROUP ADR 2007 THROUGH DECEMBER 2012 $110 2007 2008 2009 2010 2011 2012 $100 $90 $80 $70 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).
WE EXPECT TRANSIENT ADR GROWTH TO CONTINUE 8.0 6.0 2012: 5.4% 4.0 2011: 3.4% 2.0 0.0 Jan-11 Jul-11 Jan-12 Jul-12 *Transient ADR % by Month, 1/11 12/12 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)
GROUP ADR EXPECTATION STARTING TO IMPROVE 15.0 10.0 5.0 0.0 2011: 3.0% 2012: 2.8% -5.0-10.0 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 *Group ADR % by Month, 1/11 12/12 Data is for upper tier hotels only (LUX & UU chains, & Upper Tier independents)
GROUP DEMAND NEVER RECOVERED AFTER THE DOWNTURN 28.9% -0.2% +12.9 mm rooms -0.7 mm rooms Transient Group *Segmentation Demand % Change, 2012 (vs. 2007)
MARKETS
REVPAR RECOVERY THROUGH DECEMBER 2012
REVPAR RECOVERY TRACTS FULLY RECOVERED
REVPAR RECOVERY TRACTS STILL RECOVERING
MAJOR MARKETS POSITIONING TTM Q2 2008
MAJOR MARKETS POSITIONING TTM Q1 2010
MAJOR MARKETS POSITIONING TTM Q4 2012
MAJOR MARKETS POSITIONING TTM Q4 2008
MAJOR MARKETS POSITIONING TTM Q1 2010
MAJOR MARKETS POSITIONING TTM Q4 2012
INVESTMENTS
Billions HOTEL TRANSACTION ALMANAC TEXAS TRANSACTION VOLUME 2000 2012 $3 $2 $2 $1 $1 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Thousands HOTEL TRANSACTION ALMANAC AVERAGE PRICE PER KEY 2000 2012 $160 $140 $120 $100 $80 $60 $40 $20 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
HOTEL TRANSACTION ALMANAC 2012 AVERAGE PRICE PER KEY $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0
Hotel Transaction Almanac Selected 2012 Texas Deals Property Name Rooms Price Price/Rm Renaissance Austin 492 $103,000,000 $209,350 Holiday Inn Express Fort Worth Downtown 132 20,000,000 151,515 Courtyard Arlington South 103 15,250,000 148,058 Sheraton Fort Worth Downtown 430 55,000,000 127,907 Hilton Harden Inn Fort Worth 98 7,200,000 73,469 AmericInn Pampa 52 3,350,000 64,423 Crowne Plaza Dallas Galleria 429 19,750,000 46,037
2012/2013 FORECAST
TEXAS HOTEL PIPELINE
UNDER CONSTRUCTION ROOMS MOSTLY IN MIDDLE SEGMENTS 1.9 1.0 1.2 0.6 0.4 0.4 0.0 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated *TX Pipeline, Rooms Under Construction, 000s Rooms, by Scale, YE 2012
TX PIPELINE: ACCELERATES INTO 2014 Market 2013 2014 Dallas 256 1,633 Houston 586 1,718 Austin 1,076 674 Fort Worth 422 511 San Antonio 0 692 Other Texas 2,210 3,721 Total 4,550 8,949 *Texas Pipeline, by Phase, Rooms, Est. Opening in 2013 and 2014
KEY PERFORMANCE INDICATOR OUTLOOK (% CHANGE VS. PRIOR YEAR) 2013 Outlook 2013 U.S. 2013 Dallas 2013 Houston Supply 1.0% 0.5% 1.3% Demand 1.8% 2.0% 3.0% Occupancy 0.8% 1.5% 1.6% ADR 4.9% 6.3% 6.5% RevPAR 5.7% 7.9% 8.2%
KEY PERFORMANCE INDICATOR OUTLOOK (% CHANGE VS. PRIOR YEAR) 2014 Outlook 2014 U.S. 2014 Dallas 2014 Houston Supply 1.5% 2.7% 3.7% Demand 2.8% 4.3% 2.3% Occupancy 1.3% 1.6% -1.4% ADR 4.6% 4.5% 3.8% RevPAR 6.0% 6.1% 2.3%