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© 2018 STR, Inc. All Rights Reserved.
Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR
(collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR.
No strategic advice or marketing recommendation is intended or implied.
Hotel Industry Overview
Chris Klauda
Senior Director, Market Insights
@STR_Data
2
Agenda – August 30, 2018
• Total U.S.
• Fort Lauderdale
• Fort Lauderdale SubmarketsRegions
• Recent Performance
• Chain Scales
• Group/Transient
• Pipeline
• Forecast
Topics
© 2018 STR. All Rights Reserved.
© 2018 STR. All Rights Reserved.
Total U.S. Review
© 2018 STR. All Rights Reserved. 5
STR Benchmark Building Blocks
Supply(rooms available)
Demand(rooms sold)
Revenue(rooms revenue)
Occupancy ADR
RevPAR
© 2018 STR. All Rights Reserved. 6
US Performance: Records Continue
+2.0%
+3.0%
+1.1%
+2.4%
+3.4%
+5.5%
1.89B
Supply
1.25B
Demand
66.2%
Occupancy
$129
ADR
$85
RevPAR
July, 2018 12MMA, Total US Results
$161B
Revenue
© 2018 STR. All Rights Reserved. 7
2.0
-0.8
-4.7
-7.1
7.8
3.0
-8
-4
0
4
8
1990 2000 2010
Supply % Change
Demand % Change
Demand Growth Continues. Supply Growth Slow and Steady.
Total U.S., Supply & Demand % Change, 12 MMA 1/1990 – 07/2018
Gulf
War
9/11
Housing /
Banking Crisis
© 2018 STR. All Rights Reserved. 8
Occupancy Growth Leads To New Records
-3.4
-6.7
-9.7
1.1
-10
-5
0
5
1990 2000 2010
Occ % Change
Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 07/2018
© 2018 STR. All Rights Reserved. 9
While ADR Growth Is Steady
-3.4
-6.7
-9.7
1.1
6.8 7.5
2.4
-10
-5
0
5
1990 2000 2010
Occ % ChangeADR % Change
Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 07/2018
© 2018 STR. All Rights Reserved. 10
Real ADR Growth (ADR% minus CPI%) Now Hovers Around 0%
-10
-5
0
5
1990 2000 2010
Total U.S., Real ADR % Change (ADR minus CPI), by quarter, Q1/1990 – Q2/2018
© 2018 STR. All Rights Reserved. 11
101 Consecutive Months of RevPAR Growth!!!
-25
-15
-5
5
15
1990 2000 2010
Total U.S., RevPAR % Change, 1/1990 – 07/2018
56 Months 101 Months111 Months
© 2018 STR. All Rights Reserved. 12
RevPAR Growth: Erratic Monthly Numbers, But Overall Trend Is Steady
0
2
4
6
2016 2017 2018
Monthly 12MMA
Dec
*Total U.S., RevPAR % Change by month and 12 MMA, 1/2016 – 07/2018
Dec
Oct
Oct
© 2018 STR. All Rights Reserved. 13
This Expansion Cycle Fueled by High Demand, Low Supply
Cycle Period:Dec. 1991 –
Mar. 2001
Mar. 2010 –
July 2018
Length (months): 111 101
Avg. Monthly Supply Growth: 2.4 1.0
Avg. Monthly Demand Growth: 2.6 3.4
Avg. Monthly ADR Growth: 4.2 3.4
Avg. Monthly RevPAR Growth: 4.4 5.9
© 2018 STR. All Rights Reserved.
Class Review YTD
© 2018 STR. All Rights Reserved. 15
GDP Growth Spurs Healthy Demand Growth Across All Classes
2.2 2.1
4.5
3.8
0.3
-0.3
3.1
2.4
5.45.1
1.6
0.6
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
Supply % Change
Demand % Change
*Supply / Demand % Change, by Class, July 2018 12MMA
© 2018 STR. All Rights Reserved. 16
Excellent Year For High and Low End Hotels
(… Good For All Others)
0.80.3
0.91.2 1.3
0.9
2.2
1.6
1.91.7
2.6 3.3
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
ADR % Change
Occ % Change
*RevPAR % Change by Contribution of OCC / ADR % Change, by Class, July 2018 12MMA
© 2018 STR. All Rights Reserved. 17
Strong Demand Drives Stellar Occupancy Results
71.472.8 72.6
68.1
60.958.8
70.872.6 72.0
67.3
60.258.3
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
2018 2017
*OCC %, by Class, July 2018 & 201712MMA
© 2018 STR. All Rights Reserved.
Segmentation
© 2018 STR. All Rights Reserved. 19
Transient Performance: ADR Growth Seems To Accelerate
3.0%
1.9%
0%
1%
2%
3%
4%
Jan-17 Jan-18
Demand % Change
ADR % Change
*Transient Demand and ADR % Change, 12 MMA, 1/2017 – 07/2018
© 2018 STR. All Rights Reserved. 20
Group Performance: Group Demand Growth Is Finally Positive(-ish)
0.9%
1.9%
-2%
-1%
0%
1%
2%
3%
4%
Jan-17 Jan-18
Demand % Change
ADR % Change
*Group Demand and ADR % Change, 12 MMA, 1/2017 – 07/2018
Easter Shift
Jewish Holiday Shift Easter Shift
© 2018 STR. All Rights Reserved.
2.7 2.8
0.9
2.1
H1 2017 H1 2018
Transient
Group
First Half Segmentation Demand Growth: Groups Finally Return(?)
*Segmentation Demand % Change, H1 2017 vs 2018
© 2018 STR. All Rights Reserved. 22
First Half Segmentation ADR Growth: Transient Accelerates!
1.4
2.6
2.2 2.1
H1 2017 H1 2018
Transient Group
*Segmentation ADR % Change, H1 2017 vs 2018
© 2018 STR. All Rights Reserved.
Markets
© 2018 STR. All Rights Reserved. 24
YTD Market Performance: Leisure Demand Seems To Allow For Pricing Power
Market OCC % ADR % Change Influenced By
Miami/Hialeah, FL 77.4 7.9 Leisure and Group Demand
Nashville, TN 73.6 5.8 Bachelorette Parties (+4.7%)
Orlando, FL 79.6 5.7 Leisure Demand (+4.7%)
Atlanta, GA 70.3 4.3 Leisure and Group Demand
San Francisco/San Mateo, CA 82.4 4.0 Moscone Is Back
*ADR % Change and absolute OCC in Top 25: 5 Best / 5 Worst Performing ADR % Markets, 12MMA July 2018
Philadelphia, PA-NJ 70.5 1.2 Demand Shift (+4.8%)
Phoenix, AZ 68.9 1.2 Demand Shift (+5.3%)
Oahu Island, HI 84.2 1.2 International? ($236 ADR)
Boston, MA 74.5 -0.3 Supply + Group Shift ($195 ADR)
Washington, DC-MD-VA 71.8 -1.4Inauguration / Women’s March
Comp
© 2018 STR. All Rights Reserved.
In Construction:
Vertical construction on the physical building has begun.
Final Planning:
Construction will begin within the next 12 months.
Planning:
Construction will begin in more than 13 months.
Under Contract
Pipeline
© 2018 STR. All Rights Reserved. 26
US Pipeline: Lack of In Construction Rooms Growth Aids Healthy Industry Results
Phase 2018 2017 % Change
In Construction 190 188 0.8%
Final Planning 223 219 2.0%
Planning 195 183 5.8%
Under Contract 608 591 2.8%
*Total US Pipeline, by Phase, ‘000s Rooms, July 2018 and 2017
© 2018 STR. All Rights Reserved. 27
Declining Number of I/C Rooms Will Help Overall Performance
-10
-5
0
5
10
15
20
25
30
35
150
175
200
2017 2018
Rooms ('000s) (LHS)
% Change YoY (RHS)
*Total U.S Pipeline, Rooms In Construction and % Change from Same Month Prior Year, 1/2017 – 7/2018
Rooms (000s)% Change
© 2018 STR. All Rights Reserved. 28*Total US Pipeline; Rooms In Construction, in ‘000s; 01/2006 – 07/2018
0
50
100
150
200
250
2006 2008 2010 2012 2014 2016 2018
Low: May ‘11
50K
July ‘18
190K
High:
Dec ‘07
211K
21K
I/C Pipeline Is Leveling Off Below Prior Peak
Th
ou
san
ds
© 2018 STR. All Rights Reserved. 29
Limited Service Construction Is The Name Of The Game
7.7
23.4
59.7 60.3
14.8
2.2
22.1
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated
*US Pipeline, Rooms In Construction , ‘000s Rooms, by Scale, July 2018
72%
© 2018 STR. All Rights Reserved. 30
Large Markets Grow Rapidly
Market Rooms In Construction % Of Existing
Nashville, TN 5,210 12%
New York, NY 13,389 11%
Denver, CO 4,516 9%
Dallas, TX 6,337 7%
Seattle, WA 3,128 7%
*US Pipeline, Rooms I/C and as % of Existing Supply, Largest % In Top 26 Markets, July 2018
© 2018 STR. All Rights Reserved. 31
Some Smaller MSAs Report Rapid Growth
MSA Rooms I/C % Of Existing
Grand Rapids-Wyoming, MI 1,451 14%
Austin-Round Rock, TX 3,957 10%
Savannah, GA 1,531 10%
San Jose-Sunnyvale-Santa Clara, CA 2,636 10%
Fresno, CA 752 9%
Portland-Vancouver-Hillsboro, OR-WA 2,434 8%
Charleston-North Charleston, SC 1,717 8%
North Port-Sarasota-Bradenton, FL 793 8%
*US Pipeline, Rooms I/C and as % of Existing Supply, Largest % In Top 110 MSAs, July 2018
© 2018 STR. All Rights Reserved. 32
Pipeline (’000s rooms): Top 26 Markets Have 46% Of I/C Rooms
87.4
102.993.3
130.5
69.2
125.3
Top 26 Markets Rest of the US
In Construction
Final Planning
Planning
*US Pipeline, Rooms (‘000s), Top 26 Markets vs. All Other Markets, July 2018
© 2018 STR. All Rights Reserved.
Forecast
© 2018 STR. All Rights Reserved. 34
Notable Calendar Shifts Impacting Lodging
Performance Data in 2018:
Easter: Shift from April to March (also affects Q1/Q2)
Election Day 11/6: Likely low room demand the night before
Halloween: Shift from TUE to WED, likely impacting full week
Notable Market Level Events / Comps:
Super Bowl: From Houston To Minneapolis
San Francisco: Moscone Center Reopened, easy comps Q2/Q3
Washington, D.C.: Inauguration & Women’s March (January 2017)
Houston: Hurricane Harvey – October and all of Q4 2017
Florida: Hurricane Irma – October and all of Q4 2017
California: Wildfires in Q4 2017
© 2018 STR. All Rights Reserved. 35
Total United StatesKey Performance Indicator Outlook (% Change vs. Prior Year)
2018F – 2019F
Outlook
Metric2017
Actual
2018
Forecast
2019
Forecast
Supply 2.0% 1.9%
Demand 2.6% 2.1%
Occupancy 65.9% 0.6% 0.2%
ADR $127 2.6% 2.4%
RevPAR $83 3.2% 2.6%
© 2018 STR. All Rights Reserved. 36
Total United StatesChain Scale Key Performance Indicator Outlook
2018F by Chain Scale
2018 Year End Outlook
Chain ScaleOccupancy
(% chg)
ADR
(% chg)
RevPAR
(% chg)
Luxury 0.9% 3.0% 3.9%
Upper Upscale 0.1% 2.2% 2.4%
Upscale -0.1% 2.1% 2.0%
Upper Midscale 0.2% 2.0% 2.2%
Midscale 0.7% 2.6% 3.3%
Economy 0.6% 2.7% 3.3%
Independent 0.8% 2.8% 3.6%
Total United States 0.6% 2.6% 3.2%
© 2018 STR. All Rights Reserved. 37
Total United StatesChain Scale Key Performance Indicator Outlook
2019F by Chain Scale
2019 Year End Outlook
Chain ScaleOccupancy
(% chg)
ADR
(% chg)
RevPAR
(% chg)
Luxury -0.1% 2.3% 2.3%
Upper Upscale 0.0% 2.4% 2.4%
Upscale -0.1% 2.2% 2.1%
Upper Midscale 0.0% 2.1% 2.1%
Midscale 0.1% 2.1% 2.1%
Economy 0.2% 2.1% 2.3%
Independent 0.2% 2.3% 2.5%
Total United States 0.2% 2.4% 2.6%
© 2018 STR. All Rights Reserved. 38
2018 Forecast Percent Change
Top 25 Markets vs Rest Of United States
-0.1
0.9
2.6 2.62.5
3.5
Top 25 Markets Rest of US
Occupancy ADR RevPAR
39
Forecast Summary (STR as of August 2018, PWC as of May 2018 and CBRE as of February 2018)
2018 as
Supply 2.0% 2.0% 2.0%
Demand 2.6% 2.1% 2.4%
Occupancy 0.6% 0.1% 0.4%
ADR 2.6% 2.7% 2.6%
RevPAR 3.2% 2.8% 3.0%
2019
Supply 1.9% 1.9% 1.9%
Demand 2.1% 1.9% 1.9%
Occupancy 0.2% 0.0% -0.1%
ADR 2.4% 2.0% 2.8%
RevPAR 2.6% 2.0% 2.8%
© 2018 STR. All Rights Reserved.
Fort Lauderdale
© 2018 STR. All Rights Reserved.
© 2018 STR. All Rights Reserved. 42
Fort Lauderdale Performance: Strong ADR Drives RevPAR
+2.1% +2.6%
+0.5%
+7.8% +8.3%
+10.5%
11.3M
Supply
8.8M
Demand
77.5%
Occupancy
$150
ADR
$116
RevPAR
July, 2018 12MMA, FLL Market
$1.3B
Revenue
© 2018 STR. All Rights Reserved. 43
Florida Market Overview
US
1.1%
2.4%
Florida
2.6%
5.0%
Fort Lauderdale
0.5%
7.8%
Occ
ADR
US, Florida, FLL Markets, July 2018 12MMA
© 2018 STR. All Rights Reserved. 44
Demand Is Now Outpacing Supply
2.1
2.6
-4
-3
-2
-1
0
1
2
3
4
2015 2016 2017 2018
Supply Demand
FLL Market, Supply/Demand Percent Change, TTM Jan 2005 – Jul 2018
© 2018 STR. All Rights Reserved. 45
Occupancy Steady; ADR Soaring
0.5
7.8
-4
-2
0
2
4
6
8
10
2015 2016 2017 2018
OCC ADR
FLL Market, Occupancy/ADR Percent Change, TTM Jan 2005 – Jul 2018
© 2018 STR. All Rights Reserved. 46
Big Supply Changes:
Demand Kept Up Except Midscale
-8
0
8
16
24
32
Luxury Upper Upscale Upscale Upper
Midscale
Midscale Economy
Supply Demand
FLL Market Classes, Supply / Demand % Change, MMA July 2018
© 2018 STR. All Rights Reserved. 47
Big Supply Changes:
Demand Kept Up Except Lower Midscale
-8
0
8
Luxury Upper Upscale Upscale Midscale Lower
Midscale
Economy
Supply Demand
FLL Market Classes, Supply / Demand % Change, MMA July 2018
© 2018 STR. All Rights Reserved. 48
Occupancy/ADR Impact on RevPAR Vary by Class
-10
-5
0
5
10
Luxury Upper Upscale Upscale Midscale Lower
Midscale
Economy
Occupancy ADR
FLL Market Classes, Occupancy / ADR % Change, MMA July 2018
© 2018 STR. All Rights Reserved. 49
Midscale and Economy Achieve Double Digit RevPAR Growth
3.1
5.96.9
13.1
2.3
10.5
Luxury Upper Upscale Upscale Midscale Lower Midscale Economy
FLL Market Classes, RevPAR % Change, MMA July 2018
© 2018 STR. All Rights Reserved.
Segmentation
© 2018 STR. All Rights Reserved. 51
2018 Transient Demand Just Barely Ahead of 2017
0
75,000
150,000
225,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Transient Demand 2018 Transient Demand 2017
Occ
up
ied
Ro
om
Nig
hts
*FLL Market Transient Luxury/Upper Upscale Rooms Sold, by month January 2017 - July 2018
0.6%
Jul YTD
© 2018 STR. All Rights Reserved. 52
2018 Transient Demand Just Barely Ahead of 2017
75,000
125,000
175,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Transient Demand 2018 Transient Demand 2017
Occ
up
ied
Ro
om
Nig
hts
*FLL Market Transient Luxury/Upper Upscale Rooms Sold, by month January 2017 - July 2018
0.6%
Jul YTD
© 2018 STR. All Rights Reserved. 53
2018 Transient Demand For Aug – Dec More Positive(?)
75,000
125,000
175,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Transient Demand 2018 Transient Demand 2017 Transient Demand 2016
Occ
up
ied
Ro
om
Nig
hts
*FLL Market Transient Luxury/Upper Upscale Rooms Sold, by month January 2017 - July 2018
0.6%
Jul YTD
© 2018 STR. All Rights Reserved. 54
2018 Group Demand Strong: Spring Holiday Shift Impacts
0
20,000
40,000
60,000
80,000
100,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Group Demand 2018 Group Demand 2017
Occ
up
ied
Ro
om
Nig
hts
*Tucson Market Luxury/Upper Upscale Group Rooms Sold, by month January 2017 - July 2018
1.9%
Jul YTD
Easter Sunday: April 1, 2018 April 16, 2017
© 2018 STR. All Rights Reserved. 55
2018 Group Demand Strong: Spring Holiday Shift Impacts
40,000
60,000
80,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Group Demand 2018 Group Demand 2017
Occ
up
ied
Ro
om
Nig
hts
*Tucson Market Luxury/Upper Upscale Group Rooms Sold, by month January 2017 - July 2018
1.9%
Jul YTD
Easter Sunday: April 1, 2018 April 16, 2017
© 2018 STR. All Rights Reserved. 56
2018 Group Demand Strong: Spring Holiday Shift Impacts
40,000
60,000
80,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Group Demand 2018 Group Demand 2017 Group Demand 2016
Occ
up
ied
Ro
om
Nig
hts
*FLL Market Luxury/Upper Upscale Group Rooms Sold, by month January 2017 - July 2018
1.9%
Jul YTD
Easter Sunday: April 1, 2018 April 16, 2017 March 26, 2016
© 2018 STR. All Rights Reserved. 57
Fort Lauderdale Submarkets
Fort Lauderdale/
Beach
West Broward/Plantation
Hollywood/Airport
Coral Springs/
Pompano Beach
© 2018 STR. All Rights Reserved. 58
Supply/Demand Growth Across 3 of 4 Submarkets;
West Broward Supply/Demand Declines
-2
-1
0
1
2
3
4
5
6
FLL Market Coral
Springs/Pompano
Beach
Fort
Lauderdale/Beach
Hollywood/Airport West
Broward/Plantation
Supply Demand
FLL and Submarkets, Supply / Demand % Change, TTM July 2018
© 2018 STR. All Rights Reserved. 59
Submarkets Post Similar Occupancy and Different ADR
0
10
20
30
40
50
60
70
80
90
$0
$50
$100
$150
$200
$250
FLL Market Coral
Springs/Pompano
Beach
Fort
Lauderdale/Beach
Hollywood/Airport West
Broward/Plantation
ADR Occupancy
FLL and Submarkets, Actual ADR/Occupancy, TTM July 2018
© 2018 STR. All Rights Reserved. 60
Submarket Changes Similar to FLL Overall
(Except Hollywood/Airport)
-2
0
2
4
6
8
10
FLL Market Coral
Springs/Pompano
Beach
Fort
Lauderdale/Beach
Hollywood/Airport West
Broward/Plantation
Occ ADR RevPAR
FLL and Submarkets, % Change, MMA July 2018
© 2018 STR. All Rights Reserved.
In Construction:
Vertical construction on the physical building has begun.
Final Planning:
Construction will begin within the next 12 months.
Planning:
Construction will begin in more than 13 months.
Under Contract
Pipeline
© 2018 STR. All Rights Reserved. 62
Fort Lauderdale Market Room Supply and Pipeline
© 2018 STR. All Rights Reserved. 63
Fort Lauderdale Market Pipeline
© 2018 STR. All Rights Reserved. 64
Property Rooms Open
1. The Dalmar A Tribute Portfolio Hotel 209 Oct ’18
2. Element Downtown 114 Oct ’18
3. Courtyard Downtown 120 Apr ’19
4. Gale Boutique Hotel & Residences 96 Oct ’18
5. Four Seasons 148 Dec ‘19
6. Wyndham Garden Hotel Airport & Cruise Port 142 Sep ’19
7. Staybridge Suites Airport 104 Mar ’19
8. Costa Hollywood 304 Oct ’18
9. Fairfield Inn & Suites Northwest 110 Sep ’19
10. Springhill Suites SW Miramar 125 Nov ’18
11. Residence Inn Coconut Creek 113 Apr ‘19
11 Properties In Construction
© 2018 STR. All Rights Reserved. 65
Fort Lauderdale MarketKey Performance Indicator Outlook (% Change vs. Prior Year)
2018F – 2019F
Fort Lauderdale Outlook
July 2018 12MMA
(% change)
2018
Forecast
2019
Forecast
Supply 2.1% ↑↑↑↑ ↑↑↑↑
Demand 2.6% ↑↑↑↑ ↑↑↑↑
Occupancy 0.5% = ↓↓↓↓
ADR 7.8% ↑↑↑↑↑↑↑↑ ↑↑↑↑
RevPAR 8.3% ↑↑↑↑↑↑↑↑ ↑↑↑↑
© 2018 STR. All Rights Reserved.
What Do Meeting
Planners Think?
© 2018 STR. All Rights Reserved. 67
% of meeting
planners rating
item as “very
important”
Source: STR DestinationMAP 2017
© 2018 STR. All Rights Reserved. 68
Take Aways
US
• Industry continues to set records
• Most growth will come from ADR
• Transient continues to dominate
• Forecast is good
Fort Lauderdale
• New supply was easily absorbed by increased demand
• Luxury hotel class saw significant increases
• Group business booming in Fort Lauderdale (unlike the US overall)
• Pipeline continues to grow; Challenge to continue to increase demand
Questions?
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© 2018 STR, Inc. All Rights Reserved.
Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR
(collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR.
No strategic advice or marketing recommendation is intended or implied.