Master Slides 2021

Source: 2021 STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Realty Information, Inc. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. The information in the presentation should not be construed as investment, tax, accounting or legal advice.

Hotel performanceWhere are we now and what next

Robin Rossmann – Managing Director, STR

Source: STR. 2021 © CoStar Realty Information, Inc.

AgendaKey questions for today

Supply… returns to normal

• How many hotels will never re-open?

• Will we still build new hotels?

Demand delay or replay?

• Leisure: pent-up or post-travel?

• Business: zoom or resume?

Forecasts

• Party, panic or keep calm and carry on?

• Will hotels still make money?


SupplyReturns to

normal


0%

20%

40%

60%

80%

100%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

United States Europe Middle East

97% of Middle East hotels have re-openedSTR Sample Rooms Open by Geography – January 2020 through August 2021

5

2020 2021

WHO Declares COVID-19 Global Pandemic


Will new hotels continue to open in the Middle East? … YesMiddle East, New Openings & Pipeline (Completion & Delay Rates Applied), 2011-23

6

0

5,000

10,000

15,000

20,000

25,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

New Openings Pipeline

Forecast


… and Dubai? Yes, but a bit more slowly that 2018-19Dubai, New Openings & Pipeline (Completion & Delay Rates Applied), 2011-23

7

0

2,000

4,000

6,000

8,000

10,000

12,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

New Openings Pipeline

Forecast


Demand delay or replay


0

20

40

60

80

100

120

140

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21

Africa United States Europe Mainland China Middle East

Most regions trending in the right direction Rolling 7 days occupancy (full inventory) indexed to 2019, January 2020 – September 2021

9


40

60

80

100

120

140

160

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21

Africa United States Europe Mainland China Middle East

… and ADR has shown how quickly it can bounce backRolling 7 days ADR, Local Currency, indexed to 2019, January 2020 – September 2021

10

© 2018 STR. All Rights Reserved.

Middle East


0

20

40

60

80

100

120

Full Occupancy recovery in 2021 a possibility for someME cities, Occupancy (standard) August YTD 2021 indexed to 2019

12

LEISURE QUARANTINE / DOMESTIC RESTRICTIONS


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100% Occupancy 2019 Occupancy 2021

Abu Dhabi occupancy eclipses 2019 from summer onwardsRolling 7 days occupancy (standard),– 2021 vs 2019


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

January February March April May June July August September October November December

Occupancy 2019 Occupancy 2021

Dubai occupancy gap closes considerably in H2Rolling 7 days occupancy (standard),– 2021 vs 2019


0

50

100

150

200

250

300

January February March April May June July August September

Al Khobar Dammam Jeddah Makkah Medina Riyadh

Riyadh, Damman & Al Khobar up! Jeddah, Makkah & Medina trailingSaudi Arabia, Rolling 7 days occupancy (standard) indexed to 2019, Jan – Sep 2021


$-

$50

$100

$150

$200

$250

$300

YTD 2021 YTD 2019

Big variance in ADR change by market, from 10% growth to 50% downME cities, ADR, USD, August YTD 2019, 2021

16

Greater than 20% decrease 2021 vs 2019RevPAR 2021 higher than 2019


0%

20%

40%

60%

80%

100%

120%

140%RevPAR Index

As a result some already at 2019 levels whilst others some way offRevPAR indexed to August YTD 2019, USD, August YTD 2021

“Strugglers”>50% away from

2019 levels


However, the range of performance of hotels in a market is hugeWeekly occupancy distribution of all hotels in the market indexed to 2019

18

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dubai

under 75 75-100 over 100

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Abu Dhabi

under 75 75-100 over 100


… with half of Dubai hotels already exceeding 2019 ADRsWeekly ADR of all hotels in the market indexed to 2019

19

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dubai

under 75 75-100 over 100

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Abu Dhabi

under 75 75-100 over 100


Leisure demand – pent-up or post travel?Will people stop travelling abroad to go on holiday?

20


Currently travellers are still reluctant to fully resume leisure travelThinking about the current COVID-19 situation, are you likely to travel for leisure/holidays

more or less compared to before pandemic?

38% 42% 17%3%

63% 26% 7%4%

Less likely to travel As likely to travel More likely to travel Not sure

Domestic trip International trip

Base: Total (1750)

Domestic Net propensity

-21%

International Net propensity

-55%


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Other

Financial reasons due to COVID-19

Travel insurance concerns

Concerned about cleanliness of accommodation

Additional costs due to required testing

Lack of confidence in destination

Concerned about traveling (e.g. flying)

Experience will be negatively impacted

Last minute cancellations

Refund challenges due to cancellation

Concerned about my own health

Unvaccinated fellow travelers

Fellow travelers not following the rules

Potential hassle of quarantine

Government legislation / restrictions

Government

Comfort

Financial

Current reluctancy to travel is primarily due to travel restrictionsBased on our survey of 1,750 travel consumers

Jul 2021 Feb 2021

7% 60% 31%2%

16% 46% 34%4%

Less likely to travel As likely to travel More likely to travel Not sure

Domestic trip International trip

Once the pandemic is over people are expecting more leisure travel than before COVID

Base: Total (1750)

Domestic Net propensity

+24%

International Net propensity

+19%

Thinking further ahead to when pandemic is completely over, are you likely to travel for leisure/holidays more or less compared to before pandemic?

But be careful… red tape can be very sticky


The budget

Sample: 139 execs in charge of travel

Forecast 65%-80% recovery by Q4 2022

Who Surveys View

The business traveller

Sample: 3,850 business travellers in 25 global markets

96% willing to return to business travel and 65% “very willing”

Business travel – to zoom or resume, that is the questionThe people want to travel… but red-tape, budgets and sustainability likely to slow recovery

24

1 in 10 business travellers say their partners want them out of the house!


0%

10%

20%

30%

40%

50%

60%

Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22

Bookings remain very last minuteDubai, Occupancy on the books for the next 365 days as at September 6th 2021

25

EXPONew Year’s Eve


0%

5%

10%

15%

20%

25%

30%

35%

Rome Madrid Paris London Qatar Abu Dhabi Dubai

Luxury & Upper Upscale Classes Upscale & Upper Mid Classes Midscale & Economy Classes

… although the Middle East looking more solid than EuropeNext 90 day occupancy average, As of September 6th 2021

26


Forecasts

28Source: STR. 2021 © CoStar Realty Information, Inc.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2019 2022

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


2019 2021

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


2019 2020

UAE Cities: EXPO accelerates short-term recoveryUAE Cities*, OCC, Historical Jan 2019 – July 2021, Forecast Aug 2021 – Dec 2022

28

Q421: c.5pp lower than 2019


*Aggregated performance of Abu Dhabi and Dubai

2022


29Source: STR. 2021 © CoStar Realty Information, Inc.

0

100

200

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700


2019 2022

0

100

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700


2019 2021

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100

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300

400

500

600

700


2019 2020

UAE Cities: A rapid ADR returnUAE Cities*, ADR (AED), Historical Jan 2019 – July 2021, Forecast Aug 2021 – Dec 2022

29

Q421: c.1% lower than 2019


*Aggregated performance of Abu Dhabi and Dubai

2022



ME profitability has improved greatly since beginning of the yearContinents, 2021 GOPPAR indexed to 2019, USD CC

30


With Qatar, Dubai and Saudi at the top of the profit recovery boardTop international markets, 2021 TRevPAR and GOPPAR indexed to 2019 July YTD, USD CC

31


Conclusions

Source: 2020 STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Realty Information, Inc. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. The information in the presentation should not be construed as investment, tax, accounting or legal advice.

QuestionsRobin Rossmann

[email protected]

Master Slides 2021

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