Hotel Industry Overview Deep Dive into Extended Stay Vail R. Brown SVP, Global Business Development & Marketing vbrown@str.com @vail_str 2016 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.
Agenda Hotel Overview Extended Stay Overview 2016 / 2017 Forecast Takeaways
Industry Review U.S. Hotels
2015 Was A Record Setting Year (Again) Most Rooms Sold EVER Most Rooms Revenue EVER Highest Occupancy EVER
February YTD 2016 RevPAR +2.6% Occupancy -0.6% Tough Comps Feb YTD 2015 RevPAR +8.2%
Total U.S. RevPAR: NYC & Houston Big Headwind... Total US : +2.6% NYC: -4.5% Houston: -8.8% Total U.S. excluding NYC & Houston: +3.1% RevPAR % Change February YTD 2016
February 2016: ADR Growth Rates continue % Change Room Supply 1.2% Room Demand 2.4% Occupancy 65.4% 1.1% A.D.R. $121 4.3% RevPAR $79 5.4% Room Revenue $143 Billion 6.7% Total U.S. Key Performance Indicators 12 month moving average, February 2016
Scales RevPAR Composition: ADR Driven ADR % Change Occupancy % Change 4.1 3.9 4.6 3.7 4.8 3.5 0.3 0.4 0.4 1.3 1.1 0.6 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Total U.S. RevPAR % Change by Contribution of OCC / ADR % Change By Scale, 12 MMA February 2016
Scales: Upper End Hotels Are Very Busy 75.2 74.1 74.2 67.5 59.3 58.1 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Total U.S. OCC % by Scale, 12 Month Moving Average February 2016
Industry Review U.S. Extended Stay
Top U.S. Extended Stay Brands RESIDENCE INN 81.5 ESA 68.9 HOMEWOOD SUITES 41.7 CANDLEWOOD TOWNEPLACE 26.8 32.3 Total Extended Stay Supply 390k Rooms 8% Total U.S. Supply 0 25 50 75 100 By Room Count, February 2016
U.S. Extended Stay Hotels: Decelerating Occ / ADR Growth Rates % Change Occupancy 68.8% -2.1% A.D.R. $95.09 4.8% RevPAR $65.42 2.6% Room Revenue $1.5 Billion 8.4% U.S. Extended Stay hotels, Key Performance Indicators YTD February 2016
Demand Growth Slows. Supply Growth Increases. 18 Supply % Change Demand % Change 14 10 6 5.0% 2 3.9% -2 2002 2004 2006 2008 2010 2012 2014 2016 U.S. Extended Stay hotels, Supply & Demand % Change, 12 MMA 1/2002 02/2016
ADR Growth Steady. Occ Growth Decelerating Rapidly. 12 6 6.3% 0-1.1% -6 Occ % Change ADR % Change -12 2002 2004 2006 2008 2010 2012 2014 2016 U.S. Extended Stay hotels: ADR & OCC % Change, 12 MMA 1/2002 02/2016
2014 Peak OCC year for Extended Stay hotels in U.S. OCC 68.3 64.3 71.6 74.1 74.2 74.6 76.2 75.8 68.8 2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016 U.S. Extended Stay hotels: Actual Occupancy (OCC) 2008 2015 Annual and YTD February 2016
Room Premiums well above 2008 Levels 86.33 77.23 73.69 76.87 ADR 81.33 85.44 90.79 96.74 95.09 2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016 U.S. Extended Stay hotels: Average Daily Rate (ADR) 2008 2015 Annual and YTD February 2016
Development Pipeline
Extended Stay Share U/C Rooms: 33% Upscale and 22% Upper Midscale 50.1 50.8 67% 20.8 7.9 12.8 5.9 2.1 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated Total U.S. Pipeline, Rooms Under Construction, 000s Rooms, by Scale February 2016
Extended Stay - U/C Rooms 2015 27k 2016 30k +14% Extended Stay under construction rooms, February 2015, 2016
Construction In Top 26 Markets: 24 With 2%+ Of Supply Market Rooms U/C % Of Existing Norfolk/Virginia Beach, VA 300 1% St Louis, MO-IL 407 1% Atlanta, GA 1,457 2% Oahu Island, HI 482 2% Orlando, FL 2,134 2% San Francisco/San Mateo, CA 951 2% New Orleans, LA 756 2% Tampa/St Petersburg, FL 991 2% Phoenix, AZ 1,448 2% Las Vegas, NV 3,905 2% San Diego, CA 1,654 3% Detroit, MI 1,154 3% Chicago, IL 3,300 3% Washington, DC-MD-VA 3,342 3% Anaheim/Santa Ana, CA 1,753 3% Boston, MA 1,984 4% Los Angeles/Long Beach, CA 4,480 5% Dallas, TX 4,237 5% Philadelphia, PA-NJ 2,443 5% Nashville, TN 2,062 5% Minneapolis/St Paul, MN-WI 2,294 6% Seattle, WA 2,647 6% Denver, CO 2,836 7% Houston, TX 5,586 7% Miami/Hialeah, FL 3,874 7% New York, NY 15,783 14% U.S. Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, February 2016
Top 5 Markets 18% Extended Stay U/C Room HOUSTON 1,194 PHILADELPHIA 1,151 DALLAS 1,037 ANAHEIM 1,026 DC 957 500 600 700 800 900 1,000 1,100 1,200 1,300 Top U.S. Extended Stay Construction Markets By Room Count February 2016
Homewood & Home2 Suites 40% of Extended Stay U/C Rooms HOME2 SUITES 7.1 RESIDENCE INN 6.6 HOMEWOOD SUITES 5.0 TOWNEPLACE 4.1 STAYBRIDGE 2.2 0 5 10 Top U.S. Extended Stay Brands Room Construction - Thousands February 2016
2015 / 2016 Forecast
Total United States Key Performance Indicator Outlook (% Change vs. Prior Year) 2016-2017 Outlook 2016 Forecast 2017 Forecast Supply 1.7% 1.9% Demand 2.3% 2.1% Occupancy 0.6% 0.2% ADR 4.4% 4.3% RevPAR 5.0% 4.5%
U.S. Extended Stay Key Performance Indicator Outlook (% Change vs. Prior Year) 2016-2017 Outlook 2016 Forecast 2017 Forecast Occupancy -0.6% -0.8% ADR 4.9% 4.5% RevPAR 4.5% 4.1%
Total United States Chain Scale Key Performance Indicator Outlook 2016F by Chain Scale 2016 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (% chg) Luxury 0.4% 4.5% 4.9% Upper Upscale 0.5% 4.6% 5.2% Upscale -0.2% 4.5% 4.3% Upper Midscale 0.4% 4.1% 4.5% Midscale 0.5% 3.5% 4.0% Economy 0.9% 3.7% 4.6% Independent 0.6% 4.4% 5.1% Total United States 0.6% 4.4% 5.0%
Total United States Chain Scale Key Performance Indicator Outlook 2017F by Chain Scale 2017 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (% chg) Luxury 0.1% 4.7% 4.8% Upper Upscale 0.1% 4.6% 4.7% Upscale -0.6% 3.8% 3.2% Upper Midscale -0.1% 3.7% 3.6% Midscale 0.6% 4.1% 4.7% Economy 0.4% 3.4% 3.9% Independent 0.3% 4.4% 4.7% Total United States 0.2% 4.3% 4.5%
Takeaways U.S. Demand Growth Slowing Extended Stay: Demand Growth Solid Supply Growth Strong ADR Growth Consistent Non-Traditional Competitive Threats
Thank you! Email: vbrown@str.com