Hotel InduSTRy Overvie...Hotel InduSTRy Overview Ohio Hotel & Lodging Association Annual Conference Valerie Woods Director of Business Development, Hotels vwoods@str.comThings to think
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Hotel InduSTRy Overview Ohio Hotel & Lodging Association Annual Conference
Valerie Woods
Director of Business Development, Hotels
vwoods@str.com
1. Visit www.HotelNewsNow.com 2. Create Free Login 3. Click on “Data Presentations””
STR provides monthly, weekly and daily reports to more than worldwide hotels, which represents
rooms.
52,000
7 million
Things to think about today
• Long term overview at industry performance
• Regional look: East North Central States
• Focus on Ohio
• Group versus Transient
• Pipeline: How will current projects affect supply?
• U.S. Forecast: 2015 & 2016
September 2015
RevPAR +8.0%
Occupancy +3.3%
All YTD KPIs Are Still At All-time Highs
YTD September 2015: Healthy Room Rate Growth % Change
• Room Supply 1.0%
• Room Demand 3.0%
• Occupancy 67.3% 2.0%
• A.D.R. $120 4.7%
• RevPAR $81 6.7%
• Room Revenue 7.8%
September 2015 YTD, Total US Results
12 Months Ending September 2015: Overall Still Good Data % Change
• Room Supply* 1.0%
• Room Demand* 3.4%
• Occupancy* 65.4% 2.5%
• A.D.R.* $119 4.6%
• RevPAR* $78 7.2%
• Room Revenue* 8.2%
September 2015 12 MMA, Total US Results, * Record Absolute Values
US Supply/Demand – Great Fundamentals
1.0
-0.8
-4.7
-7.1
7.7
3.4
-8
-4
0
4
8
1990 2000 2010
Supply % Change
Demand % Change
Total U.S., Supply & Demand % Change, 12 MMA Jan 1990 – Sep 2015
ADR Growth Healthy. OCC Growth Will Now Start To Slow
2.5
6.8 7.5
4.6
-10
-5
0
5
1990 2000 2010
OCC % Change
ADR % Change
Total U.S., ADR & OCC % Change, 12 MMA Jan 1990 – Sep 2015
50
60
70
80
90
100
110
120
130
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Occupancy (%)
ADR ($)Prior Peak: $107.77 Sept ’08
$119.12 Sep ’15
65.4% Sep ’15
Total U.S., Occupancy and ADR, 12 MMA Jan 1997 – Sep 2015
Occupancies Close to Peak
$30
$50
$70
$90
$110
$130
2007 2009 2011 2013 2015
Bill
ion
s
Total U.S.: Rooms Revenue, 12 MMA January 2005 – September 2015
Room Revenue > $140bn
RevPAR Growth: Smooth Sailing For The Next 2 Years
-25
-20
-15
-10
-5
0
5
10
15
1990 2000 2010
Sep +8.0%
Total U.S., RevPAR % Change, Jan 1990 – Sep 2015
56 Months 67Mo. 80 Months 31 Mo
Labor Day Hiccup
Aug+1.8%
• Luxury – Fairmont, Four Seasons, Ritz Carlton, JW Marriott
• Upper Upscale – Hilton, Hyatt, Marriott, Kimpton Hotels
• Upscale – Radisson, Hilton Garden Inn, Residence Inn, Springhill Suites, Homewood Suites, Courtyard, Best Western Premier
• Upper Midscale – Fairfield Inn/Suites, Holiday Inn, Clarion, Hampton Inn/Suites, Best Western PLUS
• Midscale – Best Western, Candlewood Suites, Quality Inn/Suites, Ramada
• Economy – Extended Stay America, Red Roof, Days Inn, Microtel
2015 STR Chain Scales *Full list available at www.str.com/resources/documents
Scales: Strong Demand Growth. Upscale Supply Increases
0.5
1.2
3.9
1.3
-0.1
0.1
1.1
2.0
4.8
3.4
2.4 2.0
Luxury Upper Upscale Upscale UpperMidscale
Midscale Economy
Supply % Change
Demand % Change
*Supply / Demand % Change, by Scale, Sep 2015 YTD
Scales: Absolute OCC Very Healthy On The Upper End
75.9 75.1 75.3
68.0
59.9 58.9
76.4 75.7 76.0
69.5
61.4 60.0
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
2014 2015
*OCC %, by Scale, Sep YTD 2015 & 2014
Scales RevPAR Composition: ADR Driven
0.6 0.7 0.9 2.1 2.5
1.8
4.8 4.4 5.2
4.5 4.5
5.3
5.4 5.4
6.1 6.5
6.8 6.9
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
ADR % Change
Occupancy % Change
RevPAR % Change
*RevPAR % Change by Contribution of OCC / ADR % Change, by Scale, Sep 2015 YTD
Illinois Indiana Michigan Ohio Wisconsin
East North Central Region States, Occ & Occ % Change, YTD Sept 2015
Ohio 62.6% 1.4%
Wisconsin 59.7% 1.8%
Michigan 61.9% 2.0%
Indiana 62.0% 1.8%
Illinois 67.5% 1.8%
Occupancy YTD
East North Central Region States, ADR & ADR % Change, YTD Sept 2015
Ohio $94 3.9%
Wisconsin $100 5.5%
Michigan $98 5.8%
Indiana $91 5.6%
Illinois $126 6.2%
ADR YTD
East North Central Region States, RevPAR & RevPAR % Change, YTD Sept 2015
Ohio $59 5.4%
Wisconsin $60 7.4%
Michigan $61 7.9%
Indiana $57 7.5%
Illinois $85 8.1%
RevPAR YTD
1423 Properties
128,781 Rooms
Ohio State Key Statistics; Sep 2015
Ohio: At-A-Glance
State YTD Sept 2015: Demand grew more than Supply % Change
• Room Supply 2.3%
• Room Demand 3.7%
• Occupancy 62.6% 1.4%
• ADR $94 3.9%
• RevPAR $59 5.4%
• Room Revenue 7.7%
September 2015 YTD, Ohio State Results
12 Months Ending September 2015: Record Breaking KPIs % Change
• Room Supply* 2.2%
• Room Demand* 4.1%
• Occupancy* 60.6% 1.9%
• ADR* $93 3.8%
• RevPAR* $56 5.7%
• Room Revenue* 8.1%
September 2015 12 MMA, Ohio State Results, * Record Absolute Values
2.1%
3.9%
-11%
-7%
-3%
1%
5%
9%
2007 2008 2009 2010 2011 2012 2013 2014 2015
Supply % Change
Demand % Change
Ohio, Supply & Demand % Change, 12 MMA Jan 2007 – September 2015
Ohio: Positive Supply/Demand Relationship
1.8
3.9
-10
-6
-2
2
6
10
2007 2008 2009 2010 2011 2012 2013 2014 2015
Occ % Chg
ADR % Chg
-11.5%
Ohio, Occ & ADR % Change, 12 MMA Jan 2007 – Sep 2015
Ohio: ADR Currently Outpacing Occupancy
Ohio: Room Nights Sold January 2000 – September 2015
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2000 2002 2004 2006 2008 2010 2012 2014
July: 2,905,002 Most Room Sold Ever!
Ohio, Room nights sold by month, Jan 2000 – Sep 2015
Ohio: Room Counts by Class
Economy, 31%
Midscale, 13%
Upper Midscale, 27%
Upscale, 18%
Upper Upscale, 11%
Luxury, 1%
5.4%
6.7%
1.4%
-0.9%
1.0%
8.6% 8.4%
1.9%
-0.7%
2.3%
Upper Upscale Upscale Upper Midscale Midscale Economy
Supply
Demand
Ohio: Class Segments , Supply & Demand % Change, YTD Sep 2015
Ohio Class Segments: Demand Growth Greatest in Upper Upscale Class
3.0%
1.6%
0.5% 0.3%
1.3%
4.4% 4.1%
3.1% 2.9%
1.9%
Upper Upscale Upscale Upper Midscale Midscale Economy
Occupancy ADR
Ohio: Class Segments , Occ & ADR % Change, YTD Sep2015
Ohio Class Segments: ADR Growth > Occ Growth in All Except Luxury
Ohio Classes: Occupancies Near Peak in Upper Segments
65.5% 69.4%
66.2%
55.2% 54.9%
67.4% 70.5%
66.5%
55.3% 55.6%
Upper Upscale Upscale Upper Midscale Midscale Economy
2014 2015
Ohio OCC %, by Class, Sep YTD 2015 & 2014
RevPAR Growth Highest in Upper Upscale
$87 $78
$65
$42
$30
$94
$83
$68
$43
$30
Upper Upscale Upscale Upper Midscale Midscale Economy
2014
2015
+5.8% +3.1% +3.2%
Ohio: RevPAR $, by Class, Sep YTD 2014 & 2015
+7.5% +3.6%
Ohio Performance by Market
-0.7%
2.6%
0.9% 0.9%
4.3% 5.4%
6.3%
3.9% 5.0%
1.3%
Dayton/Springfield, OH
11,093 rms
Cleveland, OH21,886 rms
Columbus, OH26,597 rms
Cincinnati, OH-KY-IN
27,811 rms
Ohio Area49,707 rms
Supply
Demand
Ohio: Class Segments , Supply & Demand % Change, YTD Sep 2015
Ohio Markets: Demand Growth Outpacing Supply
Ohio markets, Occ & Occ % Change, YTD Sep 2015
58.5%
63.0%
65.3%
65.3%
66.7%
Ohio Area
Dayton/Springfield, OH
Cleveland, OH
Cincinnati, OH-KY-IN
Columbus, OH
-2.9%
+3.6%
+4.0%
+6.1%
Ohio Markets: Occupancies Vary by Market
+3.0%
Ohio markets, ADR ($) & ADR % Change, YTD Sep 2015
$78.02
$88.45
$97.33
$99.52
$102.80
Dayton/Springfield, OH
Ohio Area
Cincinnati, OH-KY-IN
Columbus, OH
Cleveland, OH
+3.9%
+4.2%
+1.6%
Ohio Markets: Columbus Leads in ADR Growth
+2.8%
+5.7%
$46 $52
$59 $61 $62
$49 $52
$64 $66 $67
Dayton/Springfield, OH
Ohio Area Cincinnati, OH-KY-IN
Columbus, OH Cleveland, OH
YTD 2014 YTD 2015
-0.2% +8.0% +8.9% +7.9%
Ohio Markets: Columbus with Greatest RevPAR Growth YTD
Ohio markets, RevPAR $ and RevPAR % Change YTD Sep 2014 & 2015
+7.9%
Segmentation Glance:
Group Transient Contract
Segmentation
Transient ADR Growth Follows The High Occupancies
2.8%
4.3%
0%
1%
2%
3%
4%
5%
6%
2012 2013 2014 2015
Demand % Change
ADR % Change
Total US Transient Demand and ADR % Change, 12 MMA, Jan 2012 – Sep 2015
Group Demand Growth Slows As Hotels Are Full
1.9%
3.8%
-2%
-1%
1%
2%
3%
4%
5%
6%
2012 2013 2014 2015
Demand % Change
ADR % Change
Group Demand and ADR % Change, 12 MMA, Jan 2012 – Sep 2015
Is this Mix a New Normal?
30%
40%
50%
60%
70%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Trans Mix Group Mix
Transient and Group Mix, 12MMA 2005 – May 2015 NOTE: Data is for upper tier hotels only (luxury & upper upscale classes)
16.7 28.4 29.8
Group Room Premiums at 2008 Levels
$195
$206
$173 $178
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Transient Group
Customer Segmentation ADR 2002 – 2014 Annual, Total US NOTE: Data is for upper tier hotels only (luxury & upper upscale classes)
Inflation Adjusted ADR Tells a Different Story
$214
$206
$191
$178
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Transient Group
Customer Segmentation ADR (Adjusted for Inflation) 2002 – 2014 Annual NOTE: Data is for upper tier hotels only (luxury & upper upscale classes); Source: U.S. Department of Labor, Bureau of Statistics
-15
-5
5
15
2007 2008 2009 2010 2011 2012 2013 2014 2015
Trans. Demand % Chg
Trans. ADR % Chg
Ohio, Transient Room Demand & ADR % Change, By Month Jan 2007 – Sep 2015
Ohio: Transient ADRs Growing Even as Demand Dips
Ohio: Group Demand Growing in 2015
-30
-20
-10
0
10
20
30
2007 2008 2009 2010 2011 2012 2013 2014 2015
Group Demand % Chg
Group ADR % Chg
Ohio, Group Room Demand & ADR % Change, By Month Jan 2007 – Sep 2015
Ohio: Transient ADR 4.6% Higher than Group ADR
$84
$80 $80
$82
$85
$89
$93
$98
$80 $79
$78 $79
$83
$86
$89
$93
2008 2009 2010 2011 2012 2013 2014 YTD 2015
Transient Group
Ohio, Transient & Group ADR, Full Year 2008 – 2014, YTD Sep 2015
Hotel Pipeline
In Construction – Vertical construction on the physical building has begun. (This does not include construction on any sub-grade structures.) Final Planning – construction will begin within the next 12 months. Planning – construction will begin in more than 13 months. Unconfirmed - Potential projects that remain unconfirmed at this time.
Un
de
r C
on
trac
t STR Pipeline Phases
Un
de
r C
on
trac
t
US Pipeline: Construction Today Will Impact 2016 / 2017
Phase 2015 2014 % Change
In Construction 132 110 20%
Final Planning 175 120 46%
Planning 134 164 -18%
Under Contract 441 395 12%
*Total US Pipeline, by Phase, ‘000s Rooms, September 2015 and 2014
Limited Service Construction Has Been Strong For 2 Years
5.9
11.9
46.2 42.9
5.0 1.8
18.6
Luxury UpperUpscale
Upscale UpperMidscale
Midscale Economy Unaffiliated
*US Pipeline, Rooms Under Construction , ‘000s Rooms, by Scale, September 2015
67%
Construction In Top 26 Markets: 20 With 2%+ Of Supply
*US Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, September 2015
Market Rooms U/C % Of Existing
Oahu Island, HI 0%
San Francisco/San Mateo, CA 430 1%
St Louis, MO-IL 332 1%
Norfolk/Virginia Beach, VA 394 1%
Orlando, FL 1,645 1%
Atlanta, GA 1,398 1%
New Orleans, LA 792 2%
Tampa/St Petersburg, FL 1,012 2%
Las Vegas, NV 3,905 2%
Chicago, IL 2,753 2%
Phoenix, AZ 1,577 3%
Detroit, MI 1,126 3%
San Diego, CA 1,785 3%
Seattle, WA 1,334 3%
Washington, DC-MD-VA 3,588 3%
Minneapolis/St Paul, MN-WI 1,548 4%
Philadelphia, PA-NJ 1,846 4%
Boston, MA 2,144 4%
Los Angeles/Long Beach, CA 4,052 4%
Anaheim/Santa Ana, CA 2,291 4%
Dallas, TX 3,427 4%
Nashville, TN 1,703 4%
Denver, CO 2,404 6%
Miami/Hialeah, FL 3,314 7%
Houston, TX 6,639 9%
New York, NY 13,107 11%
Ohio Room Supply: Upscale & Upper Midscale with 82 Total Projects
1609
2913
5596
331
117 986
Upper Upscale
Upscale
Upper Midscale
Midscale
Economy
Unaffiliated
Ohio: Rooms Under Contract Pipeline by Chain Scale, Under Contract: In Construction, Final Planning & Planning, September 2015
*Chain scales not shown do not have projects in the under contract pipeline at this time
Ohio Pipeline Details: 4% of Supply In Construction
232 588
1029
2155 1577
376
576
832
400 1300
888
523
278
1158
0
1000
2000
3000
4000
Dayton/Springfield, OH
Columbus, OH Cincinnati, OH-KY-IN
Cleveland, OH Ohio Area
Planning
Final Planning
In Construction
2384 2052
2833
4035
Ohio Markets: In Construction & Final Planning & Planning Sep 2015
608
Forecast: Where Are We Headed?
Total United States Key Performance Indicator Outlook (% Change vs. Prior Year) 2014
Outlook
2014 Forecast
(as of Aug 2014)
2014 Actual
Supply 1.0% 0.8%
Demand 3.6% 4.3%
Occupancy 2.6% 3.5%
ADR 4.2% 4.5%
RevPAR 6.9% 8.2%
2016 STR PKF PwC
Supply 1.4% 1.7% 1.9%
Demand 2.2% 1.9% 2.3%
Occupancy 0.8% 0.2% 0.0%
ADR 5.2% 6.3% 5.7%
RevPAR 6.0% 6.5% 5.7%
Forecast Summary 2015 STR (as of Aug) PKF (as of Apr) PwC (as of Nov)
Supply 1.2% 1.2% 1.1%
Demand 2.9% 3.1% 2.9%
Occupancy 1.7% 1.9% 1.8%
ADR 5.1% 5.3% 4.7%
RevPAR 6.8% 7.3% 6.5%
*As of August 2015
Valerie Woods
vwoods@str.com
615-824-8664 x3328
Valerie_STR
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