Source: 2011 Smith Travel Research, Inc.
Hotel InduSTRy OverviewVail R. Brown
Vice President, Global Sales & Marketing
Source: 2011 Smith Travel Research, Inc.
Agenda: 18 May 2011
U.S. Hotel Performance
Indiana Hotel Performance
Indiana Markets & Beyond
Outlook
Source: 2011 Smith Travel Research, Inc.
U.S. Hotel Performance2011 – So far, so … blah
Source: 2011 Smith Travel Research, Inc.
Total U.S.: Key Statistics1st Quarter 2011
% Change• Hotels 52k • Room Supply 432 mm 1.0%• Room Demand 237 mm 6.7%• Occupancy 54.9% 5.7%• A.D.R. $99 3.1%• RevPAR $55 9.0%• Room Revenue $23.6 bn 10.0%
ADR Finally Contributing to RevPAR Growth
Source: 2011 Smith Travel Research, Inc.
1989199019911992199319941995199619971998199920002001200220032004200520062007200820092010 2011-10
-5
0
5
10
Demand ADR8.0%
Demand Leads ADR….Swings Get More Extreme
-6.9%
-4.7%
-0.9%
-4.6%
-0.2%
-8.7%
1.6%
Total U.S.: ADR & Demand % ChangeTwelve Month Moving Average : Jan. 1989 – March 2011
Source: 2011 Smith Travel Research, Inc.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$70
$80
$90
$100
$110
41 Months
30 Months
Total U.S.: Actual ADRTwelve Month Moving Average: Jan. 2000 – March 2011
Absolute ADR Will Not Recover for At Least 2 Years
-$3.70
-$10.60
Source: 2011 Smith Travel Research, Inc.
Hopeful ADR growth will continue to drive RevPAR growth
Total U.S.Low
Growth Forecast HighGrowth
Supply 1.0 0.7 0.4
Demand 2.1 2.5 3.0
Occupancy 1.1 1.8 2.6
ADR 3.7 4.2 4.8
RevPAR 4.8 6.1 7.4
2011 Total U.S. Outlook
Source: 2011 Smith Travel Research, Inc.
Indiana Overview
Source: 2011 Smith Travel Research, Inc.
Indiana: Key Statistics 1st Quarter 2011
%Change• Hotels 961• Rooms 85,285• STR Sample 76.2%• Occupancy 46.5% 4.6%• ADR $76.42 3.4%• RevPAR $35.54 8.2%• Room Revenue $271.4M 9.9%
State’s RevPAR driven by OCC & ADR…good thing.
Source: 2011 Smith Travel Research, Inc.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010-8
-4
0
4
8
Supply % Chg. Demand % Chg.
7.1%
1.2%
Indiana: Supply & Demand % ChangeTwelve Month Moving Average: Jan. 2001 – March 2011
Historically: Builds Into Downturns…
Source: 2011 Smith Travel Research, Inc.
Indiana: Active Development PipelineMarch 2011
Phase Properties Rooms
In Construction 10 895
Final Planning 12 1,196
Planning 31 2,936
Active Pipeline 53 5,027
Pre-Planning 15 1,389
Total 68 6,416
IF All Active Pipeline Opens…over 5.5% Room Supply Increase!
Source: 2011 Smith Travel Research, Inc.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010-10
-5
0
5
10
OCC% Chg. ADR % Chg.
Indiana: OCC & ADR % ChangeTwelve Month Moving Average: Jan. 2001 – March 2011
OCC Growth is Back…ADR Growth much Slower!?
Source: 2011 Smith Travel Research, Inc.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$30
$50
$70
$90
31 Months
Indiana: Actual ADR ($) Twelve Month Moving Average: Jan. 2001 – March 2011
ADR discounts not as extreme as U.S…BUT still takes time!
-$4.81
Source: 2011 Smith Travel Research, Inc.
Indiana Segments
Customer Segmentation:o Transient – Third party, rack rate, government rate, etc.o Group – Rooms booked in blocks of 10 or more.
Combine Chain Class: Aggregate of branded hotels & independents.o Luxury/Upper Upscale/Upscaleo UpperMidscale/Midscale/Economy
Source: 2011 Smith Travel Research, Inc.
Transient Demand back since 1Q 2010…ADR Growth?
2004 2005 2006 2007 2008 2009 2010 2011-20
-10
0
10
20
30
40Trans. Demand % Chg Trans. ADR % Chg
Indiana: Transient Room Demand & ADR % ChangeBy Month: Jan. 2004 – March 2011
Source: 2011 Smith Travel Research, Inc.
Group Demand & ADR Growth pretty in-sync…A good thing.
2004 2005 2006 2007 2008 2009 2010 2011-30
-20
-10
0
10
20
30Group Demand % Chg Group ADR % Chg
Indiana: Group Room Demand & ADR % ChangeBy Month: Jan. 2004 – March 2011
Source: 2011 Smith Travel Research, Inc.
2011 STR Chain SegmentsSelected Brands from each segment
• Luxury – Four Seasons, Ritz Carlton, Fairmont, InterContinental
• Upper Upscale – Hyatt, Embassy Suites, Hilton, Marriott
• Upscale – Hyatt Place, Hilton Garden Inn, Courtyard, Hotel Indigo
• Upper Midscale – Best Western PLUS/Premier, Hampton Inn, Fairfield Inn
• Midscale – Best Western, Country Inn & Suites, La Quinta Inn, Sleep Inn
• Economy – America’s Best Inn, Econolodge, Red Roof, Days Inn
Source: 2011 Smith Travel Research, Inc.
Jan 07
Feb 07
Mar 07
Apr 07
May 07
Jun 07
Jul 07
Aug 07
Sep 07
Oct 07
Nov 07
Dec 07
Jan 08
Feb 08
Mar 08
Apr 08
May 08
Jun 08
Jul 08
Aug 08
Sep 08
Oct 08
Nov 08
Dec 08
Jan 09
Feb 09
Mar 09
Apr 09
May 09
Jun 09
Jul 09
Aug 09
Sep 09
Oct 09
Nov 09
Dec 09
Jan 10
Feb 10
Mar 10
Apr 10
May 10
Jun 10
Jul 10
Aug 10
Sep 10
Oct 10
Nov 10
Dec 10
Jan 11
Feb 11
Mar 11
-20
-10
0
10
20
Lux/Upper Up/Upscale UpperMid/Midscale/Economy Total Indiana
Appears to be a Top Down Recovery…
Indiana: Combine Chain ClassDemand % Change by Month through March 2011
Source: 2011 Smith Travel Research, Inc.
Jan 07
Feb 07
Mar 07
Apr 07
May 07
Jun 07
Jul 07
Aug 07
Sep 07
Oct 07
Nov 07
Dec 07
Jan 08
Feb 08
Mar 08
Apr 08
May 08
Jun 08
Jul 08
Aug 08
Sep 08
Oct 08
Nov 08
Dec 08
Jan 09
Feb 09
Mar 09
Apr 09
May 09
Jun 09
Jul 09
Aug 09
Sep 09
Oct 09
Nov 09
Dec 09
Jan 10
Feb 10
Mar 10
Apr 10
May 10
Jun 10
Jul 10
Aug 10
Sep 10
Oct 10
Nov 10
Dec 10
Jan 11
Feb 11
Mar 11
-20
-10
0
10
20
Luxury/Upper Up/Upscale UpperMid/Midscale/Economy Total Indiana
ADR Data is “Less Bad”…need consistent growth.
Indiana: Combine Chain ClassADR % Change by Month through March 2011
Source: 2011 Smith Travel Research, Inc.
Indiana Markets & Beyond….
Source: 2011 Smith Travel Research, Inc.
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-6
-3
0
3
6
IndianaNorth Indianapolis IndianaSouth
Indy new room supply leader…
Indiana Markets: Room Supply % Change12 Month Moving Average Jan. 2002 – March 2011
Source: 2011 Smith Travel Research, Inc.
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-12
-8
-4
0
4
8
12
IndianaNorth Indianapolis IndianaSouth
Good News: Strong room demand across the board!
Indiana Markets: Room Demand % Change12 Month Moving Average Jan. 2002 – March 2011
Source: 2011 Smith Travel Research, Inc.
Indianapolis, IN Market
Evansville-Henderson MSA
Gary MSA
Indiana South Market
Fort Wayne MSA
Indiana North Market
51.1
51.0
49.7
46.9
44.1
41.3
7.0%
Indiana Markets & Sub-Markets: Occupancy & % Change1st Quarter 2011
0.9%
8.7%
2.3%
2.5%
3.3%
Indy highest OCC % but Gary MSA largest OCC Growth
Source: 2011 Smith Travel Research, Inc.
Indianapolis, IN Market
Gary MSA
Indiana South Market
Evansville-Henderson MSA
Indiana North Market
Fort Wayne MSA
$81.21
$74.30
$74.27
$73.10
$71.13
$69.20
Indiana Markets & Sub-Markets: Actual ADR & % Change1st Quarter 2011
3.6%
3.4%
4.2%
7.0%
2.1%
2.8%
Strong ADR Growth for Evansville-Henderson MSA
Source: 2011 Smith Travel Research, Inc.
2012 Outlook…What May Be
Source: 2011 Smith Travel Research, Inc.
2005 2006 2007 2008 2009 2010 2011P 2012P 20 Yr Average
-10
-5
0
5
10
-0.1
0.21.3
2.53.0
1.90.7 0.5
1.92.8
0.4 0.7
-2.4
-6.1
7.6
2.5 2.21.2
Supply % Chg Demand % Chg
Total U.S.: Supply/Demand % Change2005 – 2012P
Minimal Supply Growth in 2012
Source: 2011 Smith Travel Research, Inc.Total U.S. & Chain Scale: 2012 Outlook
Occupancy(% chg)
ADR (% chg) RevPAR (%chg)
Luxury -0.8 11.5 10.7
Upper Upscale 2.2 8.4 10.6
Upscale 1.9 7.3 9.2
Upper Midscale 2.5 6.9 9.4
Midscale 1.2 5.9 7.1
Economy 2.0 4.9 6.9
Independent 1.6 6.5 8.1
Total U.S. 1.7 6.8 8.5
2012: Hit RevPAR peaks of 2006 (hopefully!)
Source: 2011 Smith Travel Research, Inc.
Occupancy hitting 60%+ Remains Elusive
2005 2006 2007 2008 2009 2010 2011P 2012P
63.0 63.2 62.8
59.8
54.7
57.458.5
59.5
Total U.S.: Annual Occupancy % 2005 – 2012P
Source: 2011 Smith Travel Research, Inc.
20002001
20022003
20042005
20062007
20082009
20102011P
2012P
$85.10 $83.90 $82.68 $82.79 $86.25 $91.06 $97.98 $104.26 $107.30 $98.17 $98.08 $102.21 $109.16
$85.11 $87.52
$88.91 $90.92
$93.36
$96.53
$99.64
$102.48
$106.41 $106.04 $107.63 $109.46
$111.54
Nominal ADRYr 2000, Grown by CPI
What If since 2000 ADR had increased by CPI each year?
Note: 2011 & 2012 CPI forecast from Blue Chip Economic Indicators
Total U.S.: Annual ADR 2000 – 2012P
Source: 2011 Smith Travel Research, Inc.
Takeaways
New Hotel Supply Muted in ‘11 & ‘12
Demand Rebounds (Strongly)
ADR Growth Started Strong…Keep It Up!?
Indiana Transient Rate Growth Needed
Source: 2011 Smith Travel Research, Inc.
Thank [email protected]
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