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COVID-19PRELIMINARY ASSESSMENT OF THE IMPACTS ON THE CANADIAN ACCOMMODATION SECTORMay 2020
2 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
DISCLAIMER
All information contained in this document as well as in CBRE Limited (“CBRE”) publications, or otherwise provided by CBRE isdesigned as a reference and a management tool for the internal use of companies and agencies involved in the travel and tourism industry. Reproduction and quotation in documents and matters relating to provision of third party consulting advice,business planning, solicitation of public funds, debt and equity financing, litigation, property tax or other legal and financial matters is NOT PERMITTED without the written permission of CBRE. Quotation and reproduction of this material is permitted otherwise ONLY if credited to CBRE and referencing our disclaimer as follows: Source: CBRE Limited with reproduction and use of information subject to CBRE Limited Disclaimer / Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
Users of this information are advised that CBRE Limited does not represent the information contained herein to be definitive or all-inclusive. CBRE Limited believes the information to be reliable, but is not responsible for errors or omissions.
3 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
PRESENTERS
DAVID LARONE, ISHCSENIOR MANAGING DIRECTOR, CBRE HOTELS
NICOLE NGUYEN, CANDIDATE MEMBER AICDIRECTOR, CBRE HOTELS
BRIAN STANFORD, CMC, ISHC, FRICSSENIOR MANAGING DIRECTOR, CBRE HOTELS
T + 1 647 943 3742EMAIL: [email protected]
T+ 1 647 943 3745EMAIL: [email protected]
T + 1 647 943 3741EMAIL: [email protected]
4 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
CBRE HOTELS – CANADA
CURRENT COVID-19 SITUATION
6 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
GLOBAL PERSPECTIVE
SEMI-EASING LOCKDOWN GRADUAL OPENING RECOVERYLOCKDOWN
China
France NetherlandsUSA
SpainAustralia
Austria DenmarkCzechNorway
Iran
Germany ItalyPortugalBelgiumSwitzerlandCanadaIndia
NO LOCKDOWN• South Korea• Taiwan• Japan
UKTurkey
Singapore
BrazilRussia
GDP-lead indicator and lockdown stage comparison (May 4)
Source: CBRE Hotels Research
7 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
CANADIAN PERSPECTIVE
OntarioQuebec
British ColumbiaNova Scotia
PEINew BrunswickSaskatchewanNewfoundlandManitoba
Alberta
No Plans in Place:• Nunavut• Northwest Territories• Yukon
SEMI-EASING LOCKDOWN GRADUAL OPENING RECOVERYLOCKDOWN
Canadian Provincial lockdown stage comparison (May 6)
ECONOMIC OUTLOOKS
9 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
THE CBRE ECONOMIC SITUATION
-4.9 -4.8 -4.7-5.4 -6.1
-8.1-6.8
6.1
3.95.2 5.0
6.2
4.4
9.5
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
USA Japan Germany UK France Italy Canada
Real
GD
P G
row
th (%
)
GDP Growth Forecasts G7 Economies 2020 2021
Source: CBRE House-View, April 2020.
10 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
THE CURRENT ECONOMIC SITUATION
-4.8
-4.9
-6.9
-7.5
-9.1
-6.0
-10.8
-6.2
4.0
3.9
6.8
7.3
6.5
6.0
9.3
4.2
National Bank of Canada
RBC
CIBC
TD
Scotiabank
BMO
Deloitte
IMF
GDP Forecast
2020 2021
8.3
10.0
10.3
9.4
9.3
8.5
7.4
7.5
7.4
7.6
8.4
6.0
8.8
7.0
6.7
7.2
National Bank of Canada
RBC
CIBC
TD
Scotiabank
BMO
Deloitte
IMF
Unemployment Forecast
2021 2020
Compiled by CBRE Hotels, 2020
11 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
THE CURRENT ECONOMIC SITUATION
$227 BStimulus (~10% of GDP)
$150 B Liquidity or Loan Measures
~2.5xLarger than 2009 Financial Crisis Response
$77 BDirect Stimulus
RECENT HISTORY
13 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
2015 TO 2019
$40
$50
$60
$70
$80
$90
$100
$110
$120
$130
35%
40%
45%
50%
55%
60%
65%
70%
2015 2016 2017 2018 2019
RevP
AR
Occ
upan
cy
National Accommodation Market Occupancy & RevPAR2015-2019
RevPAR Occupancy
14 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
2015 TO 2019
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
2015 2016 2017 2018 2019
National ANOI Per Room
15 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
OUR ORIGINAL 2020 OUTLOOK
NATIONAL 2020 Projections
Rooms 465,006
Occupancy 66%
ADR $171
RevPAR $113
% Change
Supply 1.9%
Demand 1.8%
ADR 3.0%
RevPAR 2.8%
HIGHLIGHTS:
• Supply was expected to grow at record levels
• With demand expected to be generally in balance with supply occupancy was expected to be relatively flat
• ADR growth was expected to be below the five year average
• With moderate ADR growth and occupancy holding flat RevPAR growth was expected to be less than 3%
16 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
TRAVEL DATA
12%
67%
14%7%
CANADIAN TRAVEL BREAKDOWN
Domestic (Business) Domestic (Pleasure) US OVERSEAS
Source: Conference Board of Canada
CURRENT MARKET PERFORMANCE
18 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
2020 YTD NATIONAL PERFORMANCE
Source: CBRE Hotels
2020 Jan Feb Mar YTD March
Occupancy 50% 59% 32% 47%
ADR $147 $150 $141 $147
RevPAR $74 $88 $45 $69
2019 Jan Feb Mar YTD March
Occupancy 51% 59% 60% 57%
ADR $148 $150 $148 $149
RevPAR $75 $88 $89 $84
19 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
2020 YTD NATIONAL PERFORMANCE
Source: STR
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
0%
10%
20%
30%
40%
50%
60%
70%
80%COVID-19 NATIONAL ACCOMODATION MARKET IMPACT
Occ 2020
Occ 2019
ADR 2020
ADR 2019
RevPAR 2020
RevPAR 2019
20 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
THE CANADIAN/US TREND LINES
0%
10%
20%
30%
40%
50%
60%
70%
80%
29-Feb 7-Mar 14-Mar 21-Mar 28-Mar 4-Apr 11-Apr 18-Apr 25-Apr 2-May
Canada/US Weekly Occupancy Performance2019/2020
Canada 2019
Canada 2020
US 2019
US 2020
Source: STR
21 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
0%
10%
20%
30%
40%
50%
60%
70%
80%
Atlantic Central Prairies Western National
Regional Occupancy Week Ending May 2nd
2019 2020
REGIONAL OCCUPANCY PERFORMANCE
Source: STR
22 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Edmonton Calgary Montreal Ottawa Toronto Vancouver National
Major Market Occupancy Week Ending May 2nd
2019 2020
MAJOR MARKET OCCUPANCY PERFORMANCE
Source: STR
23 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Urban Suburban Airport Interstate Resort SmallMetro/Town
National
Occupancy by Location Week of May 2nd
2019 2020
PROPERTY LOCATION OCCUPANCY PERFORMANCE
Source: STR
IMPACT OF HISTORIC EVENTS
25 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
100,000,000
110,000,000
120,000,000
45%
50%
55%
60%
65%
70%
National Accomodation Market Occupancy & Demand1998-2019
Occupied Room Nights Occupancy
SARS Epidemic
Great Financial
Crisis
9/11 Terrorist Attacks
IMPACT OF HISTORIC EVENTS
Source: CBRE Hotels
26 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
National Accomodation Market ADR & RevPAR Performance1998-2019
ADR RevPAR
9/11 Terrorist Attacks
SARS Epidemic
Great Financial
Crisis
IMPACT OF HISTORIC EVENTS
27 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
IMPACT OF HISTORIC EVENTS
Source: CBRE Hotels
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$13,000
$14,000
$15,000
$16,000
$17,000
National ANOI Per Room
SARS Epidemic
9/11 Terrorist Attacks
Great Financial
Crisis
COMING OUT OF COVID-19
29 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
RECOVERY INFLUENCES
Travel Restrictions
Industry Operational
Shifts
Economic Recovery
Longer Term Social
Distancing Requirements
Vaccine Timing &
Availability
30 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
THE CANADIAN RECOVERY OUTLOOK
Source: CBRE Hotels
CBRE Original Canadian Forecasts 1/1/2020
Occ ADR RevPAR Supply Demand Occ ADR RevPAR
2019 65.1% $163.52 $106.52 1.8% 0.2% -1.1% 0.8% -0.8%
2020 65.3% $167.44 $109.39 1.9% 2.5% 0.2% 2.4% 2.7%
Canadian Forecasts Based on CBRE US Forecasts 5/5/2020
Occ ADR RevPAR Supply Demand Occ ADR RevPAR
2020 38.2% $138.99 $53.15 1.9% -40.0% -27.1% -15.0% -50.1%
2021 57.0% $152.89 $87.09 0.7% 50.0% 18.7% 10.0% 63.8%
2022 63.5% $159.01 $100.94 0.5% 12.0% 6.5% 4.0% 15.9%
2023 65.1% $163.78 $106.55 0.5% 3.0% 1.6% 3.0% 5.6%
2024 65.1% $167.87 $109.22 1.5% 1.5% 0.0% 2.5% 2.5%
2025 65.1% $172.07 $111.95 1.5% 1.5% 0.0% 2.5% 2.5%
31 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
THE CANADIAN RECOVERY OUTLOOK
Source: CBRE Hotels
10%
20%
30%
40%
50%
60%
70%
80%
Canadian Occupancy Forecast Based on CBRE US Forecasts 5/5/2020
2019 Actual Occupancy CBRE Occupancy Forecast
32 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
THE CANADIAN RECOVERY OUTLOOK
Source: CBRE Hotels
95
105
115
125
135
145
155
165
175
185
Canadian ADR Forecast Based on CBRE US Forecasts 5/5/2020
"2019 Actual ADR" "CBRE ADR Forecast"
33 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
THE CANADIAN RECOVERY OUTLOOK
Source: CBRE Hotels
10
30
50
70
90
110
130
150
Canadian RevPAR Forecast Based on CBRE US Forecasts 5/5/2020
"2019 Actual RevPAR" "CBRE RevPAR Forecast"
34 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
THE RECOVERY: SEGMENTATION IMPLICATIONS
Local Leisure
Medium-LargeGroup
Crew
Local/Regional
Corporate
National/Global
CorporateSocial
Catering
Small Group
Tour Groups
Impact/Survival Recovery/New Normal
Government
Limited Service
Focused Service/Extended Stay
Full Service/ Resort
International Leisure
Third-Party/Discount
Special Purpose
35 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
THE RECOVERY: PHASING
Impact & Short Term Relief Survival Recovery The New
Normal
CBRE HOTELS VALUATION & ADVISORY SERVICES | www.cbre.ca/vas-hotels
TORONTO/NATIONALBrian StanfordSenior Managing Director647.943.3741 | [email protected]
VANCOUVERDavid FergusonDirector778.372.1941 | [email protected]
TOURISM & LEISURE GROUPFran HoholSeniorDirector647.943.3743 | [email protected]
David LaroneSenior Managing Director647.943.3742 | [email protected]
Kirstin HallettDirector778.372.1942 | [email protected]
Rebecca GodfreyDirector647.943.3744 | [email protected]
Nicole NguyenDirector647.943.3745 | [email protected]
Cailin Sully-DanielsAssociate Director778.372.4414 | [email protected]
CBRE HOTELS BROKERAGE | www.cbrehotels.com
TORONTOBill Stone*416.815.2371 | [email protected]
CALGARYGreg Kwong*403.750.0514 | [email protected]
Deborah Borotsik**416.815.2347 | [email protected]
Sylvia Occhiuzzi**416.874.7264 | [email protected]
* Broker** SalesRepresentative
37 CBRE HOTELS | MAY 2020Source: CBRE Hotels’ Trends in the Hotel Industry National Market with reproduction and use of information subject to CBRE Limited Disclaimer | Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
DISCLAIMER
All information contained in this document as well as in CBRE Limited (“CBRE”) publications, or otherwise provided by CBRE isdesigned as a reference and a management tool for the internal use of companies and agencies involved in the travel and tourism industry. Reproduction and quotation in documents and matters relating to provision of third party consulting advice,business planning, solicitation of public funds, debt and equity financing, litigation, property tax or other legal and financial matters is NOT PERMITTED without the written permission of CBRE. Quotation and reproduction of this material is permitted otherwise ONLY if credited to CBRE and referencing our disclaimer as follows: Source: CBRE Limited with reproduction and use of information subject to CBRE Limited Disclaimer / Terms of Use as detailed at https://www.cbre.ca/en/real-estate-services/business-lines/valuation-and-advisory-services/hotels-valuation-and-advisory-services/disclaimer
Users of this information are advised that CBRE Limited does not represent the information contained herein to be definitive or all-inclusive. CBRE Limited believes the information to be reliable, but is not responsible for errors or omissions.
