Oklahoma Hotel & Lodging Association 2019 Forecasting Luncheon · Upper Upscale thru Upper Midscale are In Construction projects Phase Hotels Rooms In Construction 10 1,041 Final

©2018STR,Inc.AllRightsReserved.Anyreprint,useorrepublicationofallorapartofthispresentationwithoutthepriorwrittenapprovalofSTR,Inc.orSTRGlobal,Ltd.tradingasSTR(collectively“STR”)isstrictlyprohibited.AnysuchreproductionshallspecificallycreditSTRasthesource.ThispresentationisbasedondatacollectedbySTR.Nostrategicadviceormarketingrecommendationisintendedorimplied.

OklahomaHotel&LodgingAssociation2019ForecastingLuncheon

VailRossSeniorVicePresident,GlobalBusinessDevelopment&Marketing

[email protected]@vail_str

©2018STR.AllRightsReserved. 2

Agenda– August28th

TotalU.S.Review

StateofOklahoma

OklahomaMarkets&Submarkets

Pipeline&Outlook

©2018STR.AllRightsReserved.

TotalU.S.Review


YTDJuly2018:AnotherStrongYearInTheMaking

TotalUSResults,July2018YTD

HighestEver? %Change

RoomSupply þ 2.0%RoomDemand þ 2.9%Occupancy þ 67.1% 0.8%

ADR þ $130 2.6%RevPAR þ $87 3.5%

RoomRevenue þ 5.6%


DemandGrowthContinues.SupplyGrowthSlowandSteady.

-0.8

-4.7

-7.1

7.8

-8

-4

0

4

8

1990 2000 2010

Supply % Change

Demand % Change

TotalU.S.,Supply&Demand%Change,12MMA1/1990– 07/2018


OccupancyGrowthLeadsToNewOCCRecords.ADRGrowthSteady.

-3.4

-6.7

-9.7

1.1

6.8 7.5

2.4

-10

-5

0

5

1990 2000 2010

Occ % ChangeADR % Change

TotalU.S.,ADR&OCC%Change,12MMA1/1990– 07/2018


RealADRGrowth(ADR%minusCPI%)NowHoversAround0%

-10

-5

0

5

1990 2000 2010TotalU.S.,RealADR%Change(ADRminusCPI),byquarter,Q1/1990– Q2/2018


101ConsecutiveMonthsofRevPARGrowth!!!

-25

-15

-5

5

15

1990 2000 2010

TotalU.S.,RevPAR%Change,1/1990– 07/2018

56Months 101Months111Months


YTDMarketPerformance:LeisureDemandSeemsToAllowForPricingPower

Market OCC% ADR%Change Influenced ByMiami/Hialeah,FL 80.5 9.3 LeisureandGroupDemand

Minneapolis/StPaul,MN-WI 67.9 8.3 Super BowlLII

Orlando,FL 81.6 5.8 LeisureDemand

SanFrancisco/SanMateo,CA 82.6 5.6 GroupDemand&EasyComp

Atlanta,GA 71.8 4.2

Denver,CO 74.2 0.9Houston,TX 66.5 0.5

StLouis,MO-IL 65.7 0.1Boston,MA 73.7 -0.6

Washington,DC-MD-VA 73.7 -2.5 Inauguration/ Women’sMarch

*ADR%ChangeandabsoluteOCCinTop25:5Best/5WorstPerformingADR%Markets,YTDJuly2018

©2018STR.AllRightsReserved. 10Source:2018HOSTAlmanac

2017LaborGrowth– Top25Markets


StateofOklahoma


DemandGrowthVeryStrong.SupplyGrowthSteady.

7.7%

-8

-4

0

4

8

12

1990 2000 2010

Supply%Change Demand%Change

StateofOklahoma,Supply&Demand%Change,12MMA1/1990– 07/2018

3.0%


Strongdemandleadstooccupancygrowth

4.5

0.6

-15

-10

-5

0

5

10

15

1990 2000 2010

Occ%Change ADR%Change

StateofOklahoma,ADR&OCC%Change,12MMA1/1990– 07/2018


July2018YTD:RevPARdrivenbyOCCgrowth

Actual %Change

Room Supply 2.9% p

RoomDemand 7.8% p

Occupancy 58% 4.7% p

ADR $80 0.8% p

RevPAR $46 5.6% p

RoomRevenue $709mm 8.6% p

StateofOklahoma,KeyPerformanceIndicators


GROUP TRANSIENT

5.6%3.5%StateofOklahoma– Demand%Change,bySegmentJulyYTD2018*Luxury&UpperUpscaleClassesOnly


OklahomaMarkets&Submarkets


Market:OklahomaArea

July2018YTD

Hotels: 474Rooms: 29,756Sample:56%

OCC:53.2%9.5%

ADR:$74.210.4%

RevPAR:$39.459.9%


Demandrecoveryinfullswing.SlowinSupplygrowth

-15

-10

-5

0

5

10

15

2002 2004 2006 2008 2010 2012 2014 2016 2018


9.7%

OklahomaArea,Supply&Demand%Change,12MMA1/2002– 07/2018

1.3%


ADRgrowthisrecoveredto(slight)positivegrowth

-20

-15

-10

-5

0

5

10

15

2002 2004 2006 2008 2010 2012 2014 2016 2018


8.2%

0.5%

OklahomaArea,ADR&OCC%Change,12MMA1/2002– 07/2018


34.4

46.450.3 52.2 50.2 52.1 50.0

38.2

50.654.7 55.7 54.0 56.2 53.7

0

20

40

60

Sun Mon Tue Wed Thu Fri Sat

2017 2018

OklahomaArea– Occupancy12MMAendingJuly2017vs.2018

Fridayslead…followedbyTuesday&Wednesday


$70 $73 $74 $74 $73 $76 $76$70 $74 $74 $75 $73 $76 $76


2017 2018

Fridays&Saturdaysleadrate

OklahomaArea– ADR12MMAendingJuly2017vs.2018


Occupancylevelsabove2017acrosstheclasses…

55.659.4

56.4

45.151.2

56.7 53.0

40.5

Luxury-Upscale UpperMidscale Midscale Economy

2018 2017

OklahomaAreaMarket– ActualOccupancy,byClass12MMAJuly2018vs.July2017


…same,allclassscalesADRhigherthan2017

$89 $92

$76

$57

$89 $91

$76

$57

0

20

40

60

80

100


2018 2017

OklahomaAreaMarket– ActualADR,byClass12MMAJuly2018vs.July2017


OCCgrowthcontributingtoprimarilytoRevPARgrowth

8.6

4.76.5

11.2

0.4

1.20.2

0.5



OklahomaAreaMarket– RevPARcontributionforOCCandADR%Change12MMAJuly2018vs.July2017


Verylittleinthepipeline…Upscale&UpperMidscaleareInConstructionprojects

Phase Hotels Rooms

InConstruction 3 256

FinalPlanning 4 347

Planning 11 749

UnderContract 18 1,352

*OklahomaAreaMarketPipeline,byPhase,‘000sRooms,July2018and2017


July2018YTD

Hotels:168Rooms:16,414Sample:82%

OCC:57.1%1.6%

ADR:$80.860.2%

RevPAR:$46.181.4%


SupplyslowinghowevergrowthstilloutpacingDemandgrowth

-15

-10

-5

0

5

10

15

2002 2004 2006 2008 2010 2012 2014 2016 2018


3.6%

TulsaMarket,Supply&Demand%Change,12MMA1/2002– 07/2018

2.9%


SupplyandDemandimbalanceimpactonOCCandADRgrowth

-20

-15

-10

-5

0

5

10

15

2002 2004 2006 2008 2010 2012 2014 2016 2018


0.6%

-0.7%

TulsaMarket,ADR&OCC%Change,12MMA1/2002– 07/2018


Midscale&EconomyonlyYOYgrowth

62.453.9 56.5 54.2 51.0

65.5

56.457.2

52.649.3

Luxury-UpperUp Upscale UpperMidscale Midscale Economy

2018 2017

TulsaMarket– ActualOccupancy,byClass12MMAJuly2018vs.July2017


Luxury-UpperUpscale&MidscaleYOYgrowth$112

$94$87

$71

$48

$109

$94$88

$70

$48


2018 2017

TulsaMarket– ActualADR,byClass12MMAJuly2018vs.July2017


MidscaleClasspositiveOCCandADRgrowthcontributingtoRevPARgrowth

(4.8) -4.5

(1.3)

3.0 3.42.20.1

-0.4

1.5 0.3



TulsaMarket– RevPARcontributionforOCCandADR%Change12MMAJuly2018vs.July2017


GROUP TRANSIENT

9.5%13.1%TulsaMarket– Demand%Change,bySegmentJulyYTD2018*Luxury&UpperUpscaleClassesOnly


GROUP TRANSIENT

3.3%7.0%TulsaMarket– ADR%Change,bySegmentJulyYTD2018*Luxury&UpperUpscaleClassesOnly


YTDGrouprateprettyinlinewithTransient

$100 $103 $107 $107$113$114 $118 $122 $119

$114

2014 2015 2016 2017 YTD2018

Group Transient

TulsaMarket– ADRbyCustomerSegmentation- 2014to2017*Luxury&UpperUpscaleClassesOnly


SegmentationADR%Change:GroupADRGrowthleadsTransient

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

Jan-15 Jan-16 Jan-17 Jan-18

TransientADR%Change GroupADR%Change

TulsaMarketSegmentationADR%Change,Transient&Group,1/2015– 7/2018

11.3%

0.2%


39.0

50.8

58.1 58.9 56.861.5 62.0

39.7

50.857.1 58.5 55.9

60.5 61.8


2017 2018

TulsaMarket– Occupancy12MMAendingJuly2017vs.2018

Saturdaysleadthedayofweek


$72$79 $82 $82 $80 $80 $80

$73$79 $82 $83 $80 $81 $81


2017 2018

Tuesday&WednesdayleadinADRfordayofweeks

TulsaMarket– ADR12MMAendingJuly2017vs.2018


UpperUpscalethruUpperMidscaleareInConstructionprojects

Phase Hotels Rooms

InConstruction 10 1,041

FinalPlanning 3 277

Planning 11 836


*TulsaMarketPipeline,byPhase,‘000sRooms,July2018and2017

>10%existingsupply


Market:OklahomaCity

July2018YTD

Hotels: 280Rooms:26,514Sample:81%

OCC:64%1.7%

ADR:$84.541.9%

RevPAR:$54.113.7%


BothDemandandSupplygrowingagoodpace

-15

-10

-5

0

5

10

15

2002 2004 2006 2008 2010 2012 2014 2016 2018


8.5%

OklahomaCityMarket,Supply&Demand%Change,12MMA1/2002– 07/2018

4.7%


ADRgrowthhascrossedthepositivegrowthpoint…notinflationadjusted

-20

-15

-10

-5

0

5

10

15

2002 2004 2006 2008 2010 2012 2014 2016 2018


3.7%

0.7%

OklahomaCityMarket,ADR&OCC%Change,12MMA1/2002– 07/2018


Upscaleonlysegmentwithout YOYgrowth

63.466.9 65.9

61.0 58.961.1

69.564.2

60.854.0


2018 2017

OklahomaCityMarket– ActualOccupancy,byClass12MMAJuly2018vs.July2017


Midscale&EconomyonlyYOYgrowth

$122

$105$91

$74

$49

$122

$106

$91

$71

$48


2018 2017

OklahomaCityMarket– ActualADR,byClass12MMAJuly2018vs.July2017


Midscale&EconomyClasspositiveOCCandADRgrowthcontributingtoRevPARgrowth

3.9

-3.7

2.5 0.4

8.1

-0.3

-1.3

0.24.6

1.9



OklahomaCityMarket– RevPARcontributionforOCCandADR%Change12MMAJuly2018vs.July2017


GROUP TRANSIENT

0.4%0.5%OklahomaCityMarket– Demand%Change,bySegmentJulyYTD2018*Luxury&UpperUpscaleClassesOnly


GROUP TRANSIENT

0.3%1.7%OklahomaCityMarket– ADR%Change,bySegmentJulyYTD2018*Luxury&UpperUpscaleClassesOnly


GrouprateclosertoTransientYTD

$114 $111 $116 $113$118 $116 $121 $119 $121$115 $116 $120 $125

$133 $133 $134 $134 $134

2010 2011 2012 2013 2014 2015 2016 2017 YTD2018

Group Transient

OklahomaCityMarket– ADRbyCustomerSegmentation- 2010to2017*Luxury&UpperUpscaleClassesOnly


SegmentationADR%Change:GroupADRGrowthOutperformsTransient

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

Jan-15 Jan-16 Jan-17 Jan-18

TransientADR%Change GroupADR%Change

OklahomaCityMarketSegmentationADR%Change,Transient&Group,1/2015– 7/2018

1.5%

-5.0%


44.8

57.062.9 64.1

61.567.0 67.4

47.3

59.666.1 66.4 63.4

69.0 68.3


2017 2018

OklahomaCityMarket– Occupancy12MMAendingJuly2017vs.2018

Fridaysleadthedayofweek


$74$82 $86 $85 $82 $83 $84

$76$83 $86 $86 $82 $84 $84


2017 2018

Tuesday&WednesdayleadinADRfordayofweeks

OklahomaCityMarket– ADR12MMAendingJuly2017vs.2018


UpperUpscalethruUpperMidscaleareInConstructionprojects

Phase Hotels Rooms

InConstruction 14 1,368

FinalPlanning 13 1,511

Planning 24 2,507


*OklahomaCityMarketPipeline,byPhase,‘000sRooms,July2018and2017

>20%existingsupply


Submarkets


OKSubmarketsYTD:positivegrowthacrossallsubmarkets

Submarket Supply%Change Demand%Change

OklahomaEastArea 1.2 8.0

OklahomaWestArea 0.7 15.3

Norman/Moore 0.6 7.6

OklahomaCityAirport 6.2 5.1

OklahomaCityCBD 15.7 12.6

OklahomaCityNorth/West 4.7 8.7

OklahomaCitySoutheast 5.0 4.4

TulsaCBD/Airport 1.1 5.4

TulsaSouth/BrokenArrow 2.9 2.8

OklahomaSubmarkets,Supply&Demand%Change,July2018YTD


OKSubmarketsYTD:spotsofred…impactofnewsupply?

Submarket Occ %Change ADR%Change RevPAR% Change

OklahomaEastArea 6.6 0.6 7.3

OklahomaWestArea 14.5 -0.0 14.5

Norman/Moore 7.0 -0.6 6.3

OklahomaCityAirport -1.0 1.1 0.1

OklahomaCityCBD -2.7 -2.1 -4.7

OklahomaCityNorth/West 3.8 4.9 8.9

OklahomaCitySoutheast -0.6 1.4 0.8

TulsaCBD/Airport 4.2 0.5 4.8

TulsaSouth/BrokenArrow -0.1 -1.0 -1.1

OklahomaSubmarkets,Occ,ADR,RevPAR%Change,July2018YTD


TheCanaryInTheCoalmine


-30.0

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

RevPAR%Change

%OfSubmarketsw/negativeRevPAR%

When%ofTractswithNegativeRevPAR%is43.5%TheUSDataFlips

*SubmarketswithNegativeRevPAR%Changeoutofall639Submarkets,bymonthJan1989– Apr2017

TurningPoint:43.5%


WearemonitoringtheNumberofSubmarketswithNegativeRevPAR%

57%

32%

23%

14%15%

25%25%29%

33%

23%

70%

54%

47%

8% 8% 8%14%

63%

97%

18%

9% 11%16%

4%

12%

22%28%27%25%

1991 1996 2001 2006 2011 2016

*SubmarketswithNegativeRevPAR%Changeoutofall639Submarkets,byyear1990– 2017,andYTDJune2017/18

YTD2018

YTD2017


Outlook


USPipeline:LackofInConstructionRoomsGrowthAidsHealthyIndustryResults

Phase 2018 2017 %Change

InConstruction 190 188 0.8%

FinalPlanning 223 219 2.0%

Planning 195 183 5.8%

UnderContract 608 591 2.8%

*TotalUSPipeline,byPhase,‘000sRooms,July2018and2017


LargeMarketsGrowRapidly

Market RoomsInConstruction %OfExistingNashville, 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%

*USPipeline,RoomsI/Candas%ofExistingSupply,Largest%InTop26Markets,July2018


SomeSmallerMSAsReportRapidGrowth

MSA RoomsInConstruction %OfExistingGrand Rapids-Wyoming, MI (MSA - 24340) 1,451 14%

Nashville-Davidson--Murfreesboro--Franklin, TN (MSA - 34980) 5,290 12%

Denver-Aurora-Lakewood, CO (MSA - 19740) 5,016 10%Austin-Round Rock, TX (MSA - 12420) 3,957 10%

Savannah, GA (MSA - 42340) 1,531 10%San Jose-Sunnyvale-Santa Clara, CA (MSA -

41940) 2,636 10%Fresno, CA (MSA - 23420) 752 9%

Portland-Vancouver-Hillsboro, OR-WA (MSA -38900) 2,434 8%

Charleston-North Charleston, SC (MSA - 16700) 1,717 8%

North Port-Sarasota-Bradenton, FL (MSA - 35840) 793 8%

*USPipeline,RoomsI/Candas%ofExistingSupply,Largest%InTop110MSAs,July2018


TotalUnitedStatesKeyPerformanceIndicatorOutlook(%Changevs.PriorYear)2018F– 2019F

Outlook

Metric2018

Forecast2019

Forecast

Supply 2.0% 1.9%

Demand 2.6% 2.1%

Occupancy 0.6% 0.2%

ADR 2.6% 2.4%

RevPAR 3.2% 2.6%

©2018STR.AllRightsReserved. 632018YearEndRevPARForecastTopNorthAmericanMarkets,Aug2018Forecast(Marketssortedalphabetically)

-5%to0% 0%to5% 5%to10%Houston,TX Anaheim-SantaAna,CA Miami-Hialeah,FLMontreal,QC Atlanta, GA Minneapolis-St.Paul,MN-WISt.Louis,MO-IL Boston,MA Toronto,ON

Washington,DC-MD-VA Chicago,IL Vancouver,BCDallas,TXDenver,CODetroit,MI

LosAngeles-LongBeach,CANashville,TN

NewOrleans,LANewYork,NY

Norfolk-VirginiaBeach,VAOahuIsland,HIOrlando,FL

Philadelphia,PA-NJPhoenix,AZSanDiego,CA

SanFrancisco-SanMateo,CASeattle,WA

Tampa-St.Petersburg,FL

Note:RevPARGrowthforecastestimatesareinlocalcurrency

©2018STR.AllRightsReserved. 642019YearEndRevPARForecastTopNorthAmericanMarkets,Aug2018Forecast(Marketssortedalphabetically)

-5%to0% 0%to5%Minneapolis-St.Paul,MN-WI Anaheim-SantaAna,CA

Atlanta,GABoston,MAChicago, ILDallas,TXDenver,CODetroit,MIHouston,TX

LosAngeles-LongBeach,CAMiami-Hialeah,FLMontreal, QCNashville, TN

New Orleans,LANewYork,NY

Norfolk-VirginiaBeach,VAOahu Island,HIOrlando, FL

Philadelphia,PA-NJPhoenix, AZSanDiego,CA

SanFrancisco-SanMateo,CASeattle, WA

St.Louis,MO-ILTampa-St. Petersburg,FL

Toronto,ONVancouver,BC

Washington,DC-MD-VA Note:RevPARGrowthforecastestimatesareinlocalcurrency


KeyPerformanceIndicatorOutlook(%Changevs.PriorYear)ForecastYE2018-2019

TulsaMarketOutlook

2018Actual

2019Forecast

Occupancy 54.70.7%

55.51.3%

ADR $80.390.1%

$81.211.0

RevPAR $44.000.7%

$45.032.3%


KeyPerformanceIndicatorOutlook(%Changevs.PriorYear)ForecastYE2018- 2019

Oklahoma CityMarketOutlook

2018Actual

2019Forecast

Occupancy 63.11.4%

63.71.4%

ADR $84.102.1%

$85.922.2%

RevPAR $53.063.6%

$54.763.2%


trendingup …demandisgrowingstrong

Demand strong …especiallyinOKCandOklahomaArea

Roomrates growing …currentlygroupcontributinginOKC

Newsupply aboveaverage …willfeelitforafewyears

Thingsaregood…

Travel

©2018STR,Inc.AllRightsReserved.Anyreprint,useorrepublicationofallorapartofthispresentationwithoutthepriorwrittenapprovalofSTR,Inc.orSTRGlobal,Ltd.tradingasSTR(collectively“STR”)isstrictlyprohibited.AnysuchreproductionshallspecificallycreditSTRasthesource.ThispresentationisbasedondatacollectedbySTR.Nostrategicadviceormarketingrecommendationisintendedorimplied.

Thank You!

[email protected]

vail_STR

www.linkedin.com/in/VailRoss

Don’tforget2019CHIATraining!!!

Documents

Oklahoma Hotel & Lodging Association 2019 Forecasting Luncheon · Upper Upscale thru Upper Midscale are In Construction projects Phase Hotels Rooms In Construction 10 1,041 Final