Forecasting in a Windstorm. The Forecasting in a Windstorm webinar will begin shortly.

Transcription

1 The Forecasting in a Windstorm webinar will begin shortly. If you need technical assistance with the webcast, contact us at hsmai@commpartners.com and we will assist you immediately. 1 hsmai.org Forecasting in a Windstorm Tuesday, February 3 rd, 29 2: 3: PM EST Hospitality Sales and Marketing Association International (HSMAI) 2 hsmai.org 1

2 Overview of Format and Topic Moderator Barb Taylor Carpender, CMM, CHSC Managing Director, HSMAI University 3 hsmai.org HSMAI University Alliance Partner 4 hsmai.org 2

3 HSMAI University Alliance Partner hsmai.org POLL QUESTION #1 How many people are participating in this webinar at your location today? or more 6 hsmai.org 3

4 Today s s Presenters Jan D. Freitag Vice President, Global Development SMITH TRAVEL RESEARCH jan@smithtravelresearch.com R. Mark Woodworth President PKF International mark.woodworth@pkfc.com 7 hsmai.org US LODGING INDUSTRY OVERVIEW Jan D. Freitag Vice President 8 hsmai.org 4

5 Thoughts about ALIS Fear and Loathing in San Diego transient demand, (is) a downward death spiral JP Morgan JP Morgan miserable 29 management guidance RevPAR still a falling knife Baird Deutsche Bank 9 16 Total United States Estimated Revenue and Profitability Years Revenue Income Continually Profitable 1

6 11 Total US Room Rates Actual vs Inflation Adjusted If year 2 ADR had increased by CPI each year Nominal ADR Yr 2, Grown by CPI It took 6 years to recover from Rate Reductions in Total US Overview 12 6

7 Total United States Room Supply/Demand Percent Change Twelve Month Moving Average 1989 to December Supply % Change Demand % Change Building Into The Downturn 13 Total United States Room Demand/Occ/ADR Percent Change Twelve Month Moving Average 1989 to December ADR % Chg Demand % Change Occ % Chg % -1.6% -4.2% Focus on Demand Not Occupancy 14 7

8 Total United States Hotel Rooms Sold vs. ADR Change Quarterly Change 1988 to Q Demand % Chg ADR % CHG q1 1991q1 1994q1 1997q1 2q1 23q1 26q Yield Management Amplifies The Pain 1 Total United States Key Performance Indicators Percent Change December YTD Supply Demand Occupancy ADR RevPAR -4.2 YE Results Mask The Deterioration of Fundamentals 16 8

9 Total United States Key Performance Indicators Percent Change 28 First 8 Months vs. Last 4 Months Jan-Aug Sept-Dec Supply Demand Occupancy ADR RevPAR A Tale of 2 Seasons 17 Total United States Demand Percent Change Day of Week 28 First 8 Months vs. Last 4 Months Jan-Aug Sept-Dec Sun Mon Tue Wed Thu Fri Sat Sunday / Thursday / Saturday Are Slowing

10 Total United States ADR Percent Change Day of Week 28 First 8 Months vs. Last 4 Months Jan-Aug Sept-Dec Sun Mon Tue Wed Thu Fri Sat Weekend Rates Are Deteriorating 19 Chain Scales 2 1

11 Total United States Demand Percent Change Chain Scale 28 First 8 Months vs. Last 4 Months Total US Luxury Upper Upscale Jan-Aug Sept-Dec Upscale Mid W Mid W/O Economy High End Demand is Falling 21 Total United States ADR Percent Change Chain Scale 28 First 8 Months vs. Last 4 Months Total US Luxury Upper Upscale Jan-Aug Sept-Dec Upscale Mid W Mid W/O Economy Midscale Hotels Maintain Rate 22 11

12 Increasing Occupancy and ADR Chain Scales Percent of Properties Year End 27 3 rd & 4 th Quarters YE Q3 28 Q Luxury Upper Upscale Upscale Mid With Mid W/O Economy 14 Only 7 Luxury Hotels Increased ADR & OCC 23 Declining Occupancy and ADR Chain Scales Percent of Properties Year End 27 3 rd & 4 th Quarters YE Q3 28 Q Luxury Upper Upscale Upscale Mid With Mid W/O Economy Most Properties See Falling ADR & OCC 24 12

13 Major Markets 2 Key 1 Global Markets ADR Percent Change (Local Currency) December 28 YTD Chicago, IL New York, NY Phoenix, AZ San Diego, CA San Francisco/San Mateo, CA Top 2 US Markets All Other US Markets Berlin Hong Kong SAR Dubai London Rio de Janeiro Sluggish Global Rate Growth 26 13

14 Key 1 Global Markets Occupancy Percent Change December 28 YTD Chicago, IL New York, NY Phoenix, AZ San Diego, CA -4.7 San Francisco/San Mateo, CA -.1 Top 2 US Markets -3.8 All Other US Markets -4.4 Berlin -2.1 Hong Kong SAR -3.7 Dubai -.2 London -1.6 Rio de Janeiro Global OCC Declines 27 Total US vs. Resort Locations Demand Percent Change Twelve Month Moving Average 2 to December Total US Demand Resort Demand Resort Demand Drops Faster / More Steeply 28 14

15 U.S. Lodging Industry Projections As of January Total US Industry Consecutive Quarterly Declines Key Indicators 199/ /22 Current Room Demand 3 4 Occupancy 7 6 Average Daily Rate 1 RevPAR 2 Room Revenue

16 Total United States Active Development Pipeline Thousand of Rooms Change From Last Year Phase December 28 December 27 % Change In Construction % Final Planning % Planning % Active Pipeline % Pre-Planning % Total % Source: STR / TWR / Dodge Construction Pipeline 31 Under Construction Pipeline Is Shrinking Total United States Abandoned Rooms Year-over-year percent change 9% 7% 7% 7% 6% % 3% 31% 34% 1% 16% 17% Jun-8 Jul-8 Aug-8 Sep-8 Oct-8 Nov-8 Dec-8 32 Rate of Abandonment is Increasing Source: STR / TWR / Dodge Construction Pipeline 16

17 Total United States Supply/Demand Percent Change 23 21P 4. 4 Supply % Chg Demand % Chg P 21P 2 Yr Average 33 Total United States Occupancy Percent Change 23 21P Year Average: -.4% P 21P 34 17

18 Total United States Occupancy Percent 23 21P P 21P 3 Total United States ADR Percent Change 23 21P Year Average: 3.% P 21P 36 18

19 Total United States RevPAR Percent Change 23 21P Year Average: 3.4% P 21P Total US Room Rates Actual vs Inflation Adjusted If year 2 ADR had increased by CPI each year Nominal ADR Yr 2, Grown by CPI It took 6 years to recover from Rate Reductions in