Research & Forecast Report LAS VEGAS HOTEL Q1 2016 Hospitality Stays Strong > > Visitor volume hit a new record in 2015, and is off to a good start in 2016 > > Gaming revenue continued to lag, but is becoming less important to the diversified resorts > > Room inventory may expand by the end of 2016, and will probably expand further in 2017 Economic Indicators AIR Passengers +7.6% CONVENTION Attendance +12.5 RevPAR +10.4% Q1 2016 2016 has only just begun, but so far Southern Nevada s hospitality market appears to have extended its winning streak. Visitor volume numbers were strong in January (the most recent month of data), and on pace to match the record visitor volume of 42.3 million people in 2015. Room occupancy, average daily room rate (ADR) and revenue per available room (RevPAR) all showed improvement in January 2016 compared to January 2015. Gaming revenue was once again the only bad mark on an otherwise stellar Hospitality industry performance, showing year-over-year growth of negative 3.3 percent for Clark County as a whole, and negative 7.7 percent growth on the Las Vegas Strip. Downtown gaming revenue increased by 8.8 percent year-over-year, however, and the Boulder Strip posted 16.1 percent gaming revenue growth. Southern Nevada s resort and hospitality operators started diversifying their entertainment venues during the Great Recession, and those moves have paid off. Millennials in particular appear less likely to partake in gaming than Baby Boomers, but they are still coming to Las Vegas to enjoy other attractions. Revenue Per Available Room (RevPar) RevPAR $120.00 Market Trends Relative to prior period Market Q3 2015 Market Q4 2015* Room Inventory Room Occupancy Average Daily Rate Revenue Per Available Room *Projected Summary Statistics Q1 2016 Las Vegas Market Q1-2016 Q4-2015 Q1-2015 Room Inventory 146,340 146,340 149,738 Room Occupancy 84.7% 85.9% 85.0% Average Daily Rate $144.88 $121.51 $124.46 Revenue Per Available Room $122.71 $105.06 $105.79 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 4 Q 2013 1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015 3 Q 2015 4 Q 2015
Room inventory remained static in the first quarter of 2016, and no new closures are planned for 2016. The 201 room Lucky Dragon, under construction in the Resort Corridor, may be completed before the end of 2016, or by early 2017. The 124 room Residence Inn under construction in South Las Vegas will almost certainly be completed by the end of 2016. These two properties would represent very mild inventory growth for Southern Nevada. The much larger Resorts World Las Vegas property is currently under construction, with completion of the first phase planned for 2017. Sales Volume $2,000,000,000 $1,800,000,000 $1,600,000,000 $1,400,000,000 $1,200,000,000 $1,000,000,000 Sales Volume As alluded to above, Southern Nevada s hospitality industry is currently involved in a different kind of construction boom than we are used to, building new entertainment venues instead of new hotels. Recent non-hospitality introductions to Las Vegas include the LINQ retail district and High Roller attraction, two new zip-line attractions on the Strip and in Downtown, new retail fronting the Treasure Island and the Rock N Rio festival. 2016 will see the completion of the 20,000 seat MGM Resorts International Arena behind New York-New York and Monte Carlo, a $75 million renovation of Caesars Palace s original Roman Tower, a new 5,000-seat theatre at the Monte Carlo, a $47 million renovation of the Thomas & Mack Center, Topgolf International s four-story golf entertainment complex at the MGM Grand, a $23 million renovation and redevelopment of the Boulevard Mall. The LVCVA is currently undertaking a major expansion of the convention center to keep Southern Nevada at the forefront of convention destinations in the United States. In all, we expect that approximately $4.7 billion will be spent on Southern Nevada s hospitality market between 2014 and 2016, before another $4 billion is spent developing the first phase of Resorts World Las Vegas in 2017. $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 1 Q 2014 2 Q 20143 Q 20144 Q 20141 Q 2015 2 Q 20153 Q 20154 Q 20151 Q 2016 Sales vs. Price Per Unit 7,000 6,000 5,000 4,000 3,000 2,000 Sales vs. Price Per Unit $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 A total of 927 rooms sold in Southern Nevada in the first quarter of 2016, in two properties, the Westin-Las Vegas Casuarina and the Rodeway Inn-Convention Center. Both properties are located in the Resort Corridor. Sales volume in the first quarter of 2016 was $66 million and average sales price was $72,000 per room. Final sales volume in 2015 was $854 million in 14 sales totaling 7,558 units with an average sales price of $113,000 per room. 2015 saw as many rooms selling as 2014, but at a much lower sales volume. 1,000 0 1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015 3 Q 2015 4 Q 2015 1 Q 2016 Sales (Units) Average Price Per Unit $50,000 $0 Market Health Data Point 2016 YTD* 2015 2014 2013 2012 Visitor Volume (Millions) 3.5 42.3 41.6 39.9 39.7 Room Occupancy 84.7% 87.7% 86.8% 84.3% 84.4% ADR $144.88 $119.94 $116.48 $110.64 $108.02 RevPAR $122.71 $105.21 $101.05 $93.27 $91.17 Convention Attendance (Millions) 0.77 5.71 5.17 5.11 4.93 Passengers McCarran Int l (Millions) 3.6 45.3 42.9 41.8 41.7 Gaming Revenue (Clark County, Billions) $0.8 $9.6 $9.6 $10.0 $9.4 Gaming Revenue ( Strip, Billions) $0.5 $7.5 $6.4 $6.5 $6.2 Data from Las Vegas Convention & Visitors Authority * Data from January 2 Las Vegas Research & Forecast Report Q1 2016 Hospitality Colliers International
Southern Nevada s hospitality market, despite strong visitor volume, has actually seen inventory fall over the past year with the closure of the Riviera and Clarion. This has been good for existing operators, increasing their occupancy and profitability. 2016 will see some inventory growth, with more possibly on the way in 2017, but in the meantime expect the existing resorts to reap the benefits. Hospitality Sales* Year Volume Units Sold Price/Unit 2016 YTD $66 MM 927 $72,000 2015 $854 MM 7,558 $113,000 2014 $1,864 MM 7,749 $241,000 2013 $55 MM 1,129 $49,000 2012 $121 MM 2,613 $46,000 2011 $3,009 MM 7,369 $408,000 2010 $858 MM 8,883 $97,000 2009 $1,226 MM 4,913 $249,000 * Only includes properties with 100 or more units, arm s-length sales 2016 has only just begun, but so far Southern Nevada s hospitality market appeared to extend its winning streak - John Stater, Research & GIS Manager 3 Las Vegas Research & Forecast Report Q1 2016 Hospitality Colliers International
NORTHWEST 215 NORTH LAS VEGAS Significant Hotel Sale Activity Westin - Las Vegas Casuarina 95 Resort Corridor - $67,000,000 826 Units - $81,000/Unit January 2016 15 Riviera Hotel* Strip - $182,500,000 SUMMERLIN WEST CENTRAL DOWNTOWN RESORT CORRIDOR EAST LAS VEGAS 2,100 Units - $87,000/Unit February 2015 Renaissance Las Vegas Hotel THE STRIP 95 Resort Corridor - $111,000,000 548 Units - $203,000/Unit July 2015 Full Service AIRPORT 215 Hooters Resort Corridor - $54,000,000 SOUTHWEST HENDERSON 696 Units - $77,000/Unit May 2015 SOUTH LAS VEGAS Tropicana Las Vegas Strip - $360,000,000 1,497 Units - $240,000/Unit December 2015 Sale Activity Continued Property Name Sale Date Units Price Price/Unit Submarket Property Type Las Vegas Club Casino Aug 2015 410 $40,000,000 $98,000 Downtown Westin-Lake Las Vegas Dec 2015 493 $25,000,000 $51,000 Henderson Full Service Townplace Suites Feb 2015 228 $20,000,000 $88,000 Henderson Limited Service Hyatt Place-Las Vegas Feb 2015 202 $19,000,000 $94,000 Resort Corridor Full Service Rodeway Inn Jan 2016 101 $6,100,000 $60,000 Resort Corridor Limited Service * Indicates a redevelopment site 4 Las Vegas Research & Forecast Report Q1 2016 Hospitality Colliers International
Market Comparisons - Las Vegas Hospitality Market TYPE TOTAL INVENTORY UNITS SOLD SALES VOLUME PRICE/UNIT COMPLETIONS THIS QUARTER COMPLETIONS YTD PLANNED DOWNTOWN CAS 7,589 - $0 n/a - - - LS 938 - $0 n/a - - - Total 8,527 - $0 n/a - - - LAS VEGAS STRIP CAS 79,309 - $0 n/a - - 4,600 FS 7,543 - $0 n/a - - - LS 581 - $0 n/a - - - Total 87,433 - $0 n/a - - 4,600 RESORT CORRIDOR CAS 11,273 826 $66,530,000 $80,545 - - 201 FS 5,091 - $0 n/a - - - LS 6,285 101 $60,396 $598 - - - Total 22,649 927 $66,590,396 $71,834 - - 201 AIRPORT CAS - - $0 n/a - - - LS 841 - $0 n/a - - - Total 841 - $0 n/a - - - EAST LAS VEGAS SUBMARKET CAS 1,913 - $0 n/a - - - LS 2,571 - $0 n/a - - - Total 4,484 - $0 n/a - - - HENDERSON SUBMARKET CAS 2,281 - $0 n/a - - - FS 868 - $0 n/a - - - LS 1,480 - $0 n/a - - - Total 4,629 - $0 n/a - - - NORTH LAS VEGAS SUBMARKET CAS 1,021 - $0 n/a - - - LS 1,611 - $0 n/a - - - Total 2,632 - $0 n/a - - - SOUTH LAS VEGAS SUBMARKET CAS 2,853 - $0 n/a - - - FS 2,704 - $0 n/a - - - LS 1,206 - $0 n/a - - 124 Total 6,763 - $0 n/a - - 124 SUMMERLIN SUBMARKET CAS 1,789 - $0 n/a - - - FS 123 - $0 n/a - - - LS 857 - $0 n/a - - - Total 2,769 - $0 n/a - - - WEST CENTRAL SUBMARKET CAS 3,425 - $0 n/a - - - LS 2,188 - $0 n/a - - - Total 5,613 - $0 n/a - - - MARKET TOTAL CAS 111,453 826 $66,530,000 $80,545 - - 4,801 FS 16,329 - $0 n/a - - - LS 18,558 101 $60,396 n/a - - 124 Total 146,340 927 $66,590,396 $71,834 - - 4,925 QUARTERLY COMPARISON AND TOTALS Q1-16 146,340 927 $66,590,396 $71,834 0 0 4,925 Q4-15 146,340 2,241 $392,913,841 $175,330 0-3,600 3,634 Q3-15 146,340 958 $151,000,000 $157,620-410 -3,600 3,634 Q2-15 146,750 2,499 $442,001,950 $176,872-2,988-3,190 4,169 Q1-15 149,738 2,888 $243,075,470 $84,167-202 -202 4,124 Q4-14 149,940 128 $5,375,000 $41,992 0 1,955 4,124 5 Las Vegas Research & Forecast Report Q1 2016 Hospitality Colliers International
554 offices in 66 countries on 6 continents United States: 153 Canada: 34 Latin America: 24 Asia Pacific: 231 EMEA: 112 $2.5 billion in annual revenue COLLIERS INTERNATIONAL LAS VEGAS 3960 Howard Hughes Parkway Suite 150 Las Vegas, Nevada 89169 USA +1 702 735 5700 www.colliers.com/lasvegas MARKET CONTACT: Mike Mixer Executive Managing Director Las Vegas +1 702 735 5700 mike.mixer@colliers.com John Stater Research & GIS Manager Las Vegas +1 702 836 3781 john.stater@colliers.com 2.0 billion square feet under management 16,000 professionals and staff About Colliers International Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is an industry leading global real estate services company with more than 16,000 skilled professionals operating in 66 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting. Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Colliers has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals Global Outsourcing for 11 consecutive years, more than any other real estate services firm. For the latest news from Colliers, visit Colliers.com or follow us on Twitter (@Colliers) and LinkedIn. Copyright 2016 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.