Interim Hotel Report. January June A Hogg Robinson Group Company

Interim Hotel Report January June 2016 A Hogg Robinson Group Company

HRG Interim Hotel Report January June 2016 2 Contents 3 Key Findings 4 Top 50 Cities 6 Top Five Increases In Local Currency 7 Top Five Decreases In Local Currency 8 Global Regions ARR GBP 9 North America Focus 10 Europe Focus 11 Asia Pacific Focus 12 MEWA Focus 13 UK Focus

HRG Interim Hotel Report January June 2016 3 Key Findings SAN FRANSISCO LONDON PARIS MOSCOW Moscow REMAINS THE WORLD S MOST EXPENSIVE CITY FOR THE 12 TH CONSECUTIVE YEAR The world s top 50 most expensive cities remain the same with small place changes in rankings $ $ $ AVERAGE ROOM RATES by region saw little change with the exception of Europe and MEWA, both regions show growth in ARR $ $ IN NORTH AMERICA, SAN FRANCISCO WAS THE REGION S MOST EXPENSIVE CITY (2015 s interim report saw New York ranked first) 1 PARIS M is the most expensive city in the Eurozone FOLLOWED CLOSELY BY FRANKFURT & BRUSSELS h LONDON IS THE UK S MOST EXPENSIVE CITY and has enjoyed a 1.77% INCREASE IN ARR

HRG Interim Hotel Report January June 2016 4 Top 50 Cities Moscow continues to dominate as the world s most expensive city for the 12 th consecutive year. A slight fall in average rate in GBP was effected massively by the large movement in the exchange rate, which saw a modest 3.14% fall in GBP translated into a large 10.64% rise in local currency. 21 of the top 50 cities have seen an average room rate increase (23 cities saw room rates increase in the 2015 report), showing uncertainty continuing to impact global markets. 23 cities saw a decrease in average room rates and six cities remained the same. Ranking 2016 Ranking 2015 City Currency 2016 Exchange Rate 2015 Exchange Rate Jan-Jun 2016 ARR GBP Jan-Jun 2015 ARR GBP GBP ARR % Var Jan-Jun 2016 ARR Local Jan-Jun 2015 ARR Local Local ARR % Var 1 1 MOSCOW RUR 100.329 87.8296 257.85 266.22-3.14% RUR 25,869.83 RUR 23,382.00 10.64% 14.23% 2 3 SAN FRANCISCO USD 1.4329 1.5233 247.41 222.09 11.40% USD 354.51 USD 338.31 4.79% -5.93% 3 11 WASHINGTON USD 1.4329 1.5233 232.90 206.93 12.55% USD 333.72 USD 315.22 5.87% -5.93% 4 2 NEW YORK CITY USD 1.4329 1.5233 229.19 222.79 2.87% USD 328.41 USD 339.38-3.23% -5.93% 5 12 TOKYO JPY 159.884 183.19 204.45 171.64 19.12% JPY 32,688.28 JPY 31,442.73 3.96% -12.72% 6 4 GENEVA CHF 1.4067 1.4423 203.12 197.65 2.77% CHF 285.73 CHF 285.07 0.23% -2.47% 7 7 LAGOS NGN 288.659 297.561 197.27 186.43 5.81% NGN 56,943.76 NGN 55,474.30 2.65% -2.99% 8 6 HONG KONG HKD 11.1296 11.8107 196.29 193.71 1.33% HKD 2,184.63 HKD 2,287.85-4.51% -5.77% 9 5 ZURICH CHF 1.4067 1.4423 189.80 196.86-3.59% CHF 266.99 CHF 283.93-5.97% -2.47% 10 10 RIO DE JANEIRO BRL 5.299 4.515 185.28 177.00 4.68% BRL 981.80 BRL 799.16 22.85% 17.36% 11 8 SYDNEY AUD 1.954 1.9466 184.15 179.57 2.55% AUD 359.83 AUD 349.55 2.94% 0.38% 12 19 STOCKHOLM SEK 11.9347 12.7436 181.99 155.60 16.96% SEK 2,172.00 SEK 1,982.90 9.54% -6.35% 13 9 PARIS EUR 1.2834 1.3643 175.90 177.31-0.80% EUR 225.75 EUR 241.90-6.68% -5.93% 14 13 MIAMI USD 1.4329 1.5233 175.33 170.35 2.92% USD 251.23 USD 259.49-3.18% -5.93% 15 18 SINGAPORE SGD 1.9774 2.0548 174.71 163.69 6.73% SGD 345.47 SGD 336.35 2.71% -3.77% 16 15 LONDON GBP 1 1 172.12 169.12 1.77% GBP 172.12 GBP 169.12 1.77% 0.00% 17 14 BASEL CHF 1.4067 1.4423 168.69 169.60-0.54% CHF 237.30 CHF 244.61-2.99% -2.47% 18 17 SEOUL KRW 1,688.06 1,672.61 166.32 163.73 1.58% KRW 280,758.14 KRW 273,856.44 2.52% 0.92% 19 16 DUBAI AED 5.26118 5.7717 163.84 165.04-0.73% AED 861.99 AED 952.56-9.51% -8.85% 20 22 FRANKFURT EUR 1.2834 1.3643 160.39 150.26 6.74% EUR 205.84 EUR 205.00 0.41% -5.93% 21 25 NAIROBI KES 143.004 140.476 158.71 145.33 9.21% KES 22,696.16 KES 20,415.38 11.17% 1.80% 22 20 COPENHAGEN DKK 9.5607 10.1697 158.46 151.57 4.55% DKK 1,514.99 DKK 1,541.42-1.71% -5.99% Exchange Rate % Var

HRG Interim Hotel Report January June 2016 5 Ranking 2016 Ranking 2015 City Currency 2016 Exchange Rate 2015 Exchange Rate Jan-Jun 2016 ARR GBP Jan-Jun 2015 ARR GBP GBP ARR % Var Jan-Jun 2016 ARR Local Jan-Jun 2015 ARR Local Local ARR % Var 23 33 PHILADELPHIA USD 1.4329 1.5233 151.32 130.07 16.34% USD 216.83 USD 198.14 9.43% -5.93% 24 29 AMSTERDAM EUR 1.2834 1.3643 149.48 135.03 10.70% EUR 191.84 EUR 184.22 4.14% -5.93% 25 26 MILAN EUR 1.2834 1.3643 147.77 144.93 1.96% EUR 189.65 EUR 197.73-4.09% -5.93% 26 21 OSLO NOK 12.0812 11.7929 147.44 150.51-2.04% NOK 1,781.25 NOK 1,774.95 0.36% 2.44% 27 27 SHANGHAI CNY 9.3647 9.3112 145.16 137.36 5.68% CNY 1,359.38 CNY 1,278.99 6.29% 0.57% 28 28 BEIJING CNY 9.3647 9.3112 143.56 137.18 4.65% CNY 1,344.40 CNY 1,277.31 5.25% 0.57% 29 23 SAO PAULO BRL 5.299 4.515 142.54 150.22-5.11% BRL 755.32 BRL 678.24 11.36% 17.36% 30 30 NEW DELHI INR 96.1601 95.5957 138.11 134.72 2.52% INR 13,280.67 INR 12,878.65 3.12% 0.59% 31 32 BRUSSELS EUR 1.2834 1.3643 138.08 131.11 5.32% EUR 177.21 EUR 178.87-0.93% -5.93% 32 24 HOUSTON USD 1.4329 1.5233 137.95 145.85-5.42% USD 197.67 USD 222.17-11.03% -5.93% 33 35 BARCELONA EUR 1.2834 1.3643 137.34 125.74 9.23% EUR 176.26 EUR 171.55 2.75% -5.93% 34 42 DUSSELDORF EUR 1.2834 1.3643 136.97 127.77 7.20% EUR 175.79 EUR 174.32 0.84% -5.93% 35 39 CAPE TOWN SAR 22.0655 18.1359 133.57 122.07 9.42% SAR 2,947.29 SAR 2,213.85 33.13% 21.67% 36 31 ATHENS EUR 1.2834 1.3643 132.58 131.33 0.95% EUR 170.15 EUR 179.17-5.03% -5.93% 37 44 PITTSBURGH USD 1.4329 1.5233 132.13 117.01 12.92% USD 189.33 USD 178.24 6.22% -5.93% 38 46 MUNICH EUR 1.2834 1.3643 125.36 114.05 9.92% EUR 160.89 EUR 155.60 3.40% -5.93% 39 47 BERLIN EUR 1.2834 1.3643 121.06 111.97 8.12% EUR 155.37 EUR 152.76 1.71% -5.93% 40 43 ABU DHABI AED 5.26118 5.7717 120.90 117.82 2.61% AED 636.08 AED 680.02-6.46% -8.85% 41 34 TORONTO CAD 1.9063 1.8794 119.39 129.60-7.88% CAD 227.59 CAD 243.57-6.56% 1.43% 42 45 HAMBURG EUR 1.2834 1.3643 118.80 114.67 3.60% EUR 152.47 EUR 156.44-2.54% -5.93% 43 38 MUMBAI INR 96.1601 95.5957 118.69 123.23-3.68% INR 11,413.24 INR 11,780.26-3.12% 0.59% 44 48 MADRID EUR 1.2834 1.3643 113.22 109.34 3.55% EUR 145.31 EUR 149.17-2.59% -5.93% 45 40 ROME EUR 1.2834 1.3643 111.87 120.88-7.45% EUR 143.57 EUR 164.92-12.94% -5.93% 46 36 ISTANBUL TRL 4.1834 3.9026 111.45 122.67-9.15% TRL 466.24 TRL 478.73-2.61% 7.20% 47 41 JOHANNESBURG SAR 22.0655 18.1359 110.25 120.71-8.67% SAR 2,432.72 SAR 2,189.18 11.12% 21.67% 48 50 BANGALORE INR 96.1601 95.5957 99.07 99.15-0.08% INR 9,526.58 INR 9,478.31 0.51% 0.59% 49 37 HEATHROW GBP 1 1 98.63 99.45-0.82% GBP 98.63 GBP 99.45-0.82% 0.00% 50 49 MANCHESTER GBP 1 1 98.27 99.00-0.74% GBP 98.27 GBP 99.00-0.74% 0.00% Exchange Rate % Var

HRG Interim Hotel Report January June 2016 6 Top Five Increases In Local Currency SAO PAULO RIO DE JANEIRO CAPE TOWN NAIROBI JOHANNESBURG NAIROBI KES 22,696.16 KES 20,415.38 11.17% 1.80% All the big positive movers in average room rates in this period with the exception of one have seen large swings in the exchange rate influence what was a modest move in GBP to large increases in local currency. The exception is Nairobi, where continued reliance on upper scale hotels for added security means average room rates continue to rise despite only a modest move in exchange rate. CAPE TOWN RIO DE JANEIRO SAO PAULO JOHANNESBURG SAR 2,947.29 BRL 981.80 BRL 755.32 SAR 2,432.72 SAR 2,213.85 BRL 799.16 BRL 678.24 SAR 2,189.18 33.13% 22.85% 11.36% 11.12% 21.67% 17.36% 17.36% 21.67%

HRG Interim Hotel Report January June 2016 7 Top Five Decreases In Local Currency ABERDEEN HOUSTON HOUSTON ABERDEEN PARIS ROME DUBAI GBP 97.31 GBP 123.39-21.14% USD 197.67 USD 222.17-11.03% 0.00% -5.93% Aberdeen and Houston continue to see the effects of falling demand driven by the oil and gas sector, along with the impact of a few new openings. ROME DUBAI PARIS Regional Performance EUR 143.57 EUR 164.92-12.94% -5.93% Rome saw a modest fall in average room rate in GBP which was nearly doubled as a result of movement in the exchange rate; the city saw a larger average room rate fall in local currency. AED 861.99 AED 952.56-9.51% -8.85% Dubai saw a more or less flat average room rate movement in terms of GBP as more and more rooms are added to the city in preparation for Expo 2020. The movement in exchange rate saw this translate into a fall in average room rate in local currency. EUR 225.75 EUR 241.90-6.68% -5.93% Paris also saw a fairly flat movement in GBP in average room rate which was again turned negative in local currency by the exchange rate movement. 2016 so far has seen a slowdown in average room rate growth in general with only two global regions Europe and MEWA recording overall growth. Cities within each region continue to show a large disparity in terms of average room rate movement. Once again this supports the findings that regional performance is becoming less dominant when compared to mega city performance within regions.

HRG Interim Hotel Report January June 2016 8 Global Regions ARR GBP EUROPE average APR 2016 118.54 AMERICAS average APR 2016 136.94 APR 2015 140.50 AFRICA average APR 2016 123.04 APR 2015 138.30 APR 2015 115.25 MEWA average APR 2016 187.65 APR 2015 157.13 ASIA average APR 2016 129.88 APR 2015 132.52

HRG Interim Hotel Report January June 2016 9 North America Focus Houston once again saw a modest fall in GBP driven by the downturn in the oil and energy sector and magnified by the exchange rate movement to a much larger -11.03% drop in average room rate locally. City ARR Local 16 ARR Local 15 Local Var Exc Rate Var SAN FRANCISCO USD 354.51 USD 338.31 4.79% -5.93% WASHINGTON DC USD 333.72 USD 315.22 5.87% -5.93% NEW YORK CITY USD 328.41 USD 339.38-3.23% -5.93% BOSTON USD 328.06 USD 319.01 2.84% -5.93% LOS ANGELES USD 280.78 USD 269.09 4.34% -5.93% CHICAGO USD 238.51 USD 263.55-9.50% -5.93% VANCOUVER CAD 234.95 CAD 212.73 10.45% 1.43% TORONTO CAD 227.59 CAD 243.57-6.56% 1.43% PHILADELPHIA USD 216.83 USD 198.14 9.43% -5.93% OTTAWA CAD 216.08 CAD 188.69 14.51% 1.43% HOUSTON USD 197.67 USD 222.17-11.03% -5.93% MONTREAL CAD 188.40 CAD 175.03 7.64% 1.43% Travel to New York City continues to increase, but with many more options now available including the sharing economy, a lower average room rate growth in GBP turned slightly negative due to the exchange rate movement. Occupancy in many areas is lower than projected. Washington DC is seeing an increase in demand as the presidential election year progresses. Even with the exchange rate pulling the average room rate backwards for international visitors the city delivered a 5.87% increase in average room rate locally. San Francisco and Boston are feeling the effects of strong corporate demand coupled with no new bed stock pushing up average room rates in both cities. Chicago has seen a softer convention season and as such average room rate has fallen modestly which was magnified by the movement in exchange rate. Vancouver has seen a very strong leisure base top up a buoyant corporate demand coupled with no significant new openings. Ottawa has seen very strong leisure demand coupled with corporate demand which has driven up the average room rates. Montreal saw a major hotel close down taking approximately 450 rooms out of the city, with strong corporate demand this resulted in an increase in average room rates along with an exchange rate movement that pushed rates even higher.

HRG Interim Hotel Report January June 2016 10 Europe Focus Moscow continues to dominate as the world s most expensive city for the 12 th consecutive year. A slight fall in average rate in GBP was effected massively by the large movement in the exchange rate, which saw a modest 3.14% fall in GBP translated into a large 10.64% rise in local currency. City ARR Local 16 ARR Local 15 Local Var Exc Rate Var MOSCOW RUR 25,869.83 RUR 23,382.00 10.64% 14.23% GENEVA CHF 285.73 CHF 285.07 0.23% -2.47% PARIS EUR 225.75 EUR 241.90-6.68% -5.93% FRANKFURT EUR 205.84 EUR 205.00 0.41% -5.93% BRUSSELS EUR 177.21 EUR 178.87-0.93% -5.93% BARCELONA EUR 176.26 EUR 171.55 2.75% -5.93% ATEHNS EUR 170.15 EUR 179.17-5.03% -5.93% VIENNA EUR 165.44 EUR 161.83 2.23% -5.93% BERLIN EUR 155.37 EUR 152.76 1.71% -5.93% HAMBURG EUR 152.47 EUR 156.44-2.54% -5.93% MADRID EUR 145.31 EUR 149.17-2.59% -5.93% DUBLIN EUR 144.25 EUR 132.83 8.60% -5.93% Paris was the most expensive city in the Eurozone despite showing a drop in average room rates in local currency. In GBP the average room rate remained almost flat year on year with the local drop reflecting the movement in exchange rate. Dublin saw rising corporate demand coupled with strong leisure demand and limited new openings. Together this drove a large 8.6% average room rate growth in local currency, even coupled with a backwards movement in exchange rate. Athens saw a flat performance in average room rate in GBP but the movement in exchange rate saw the modest backwards movement of -5.03% locally. Barcelona benefits from strong leisure business which tops up a growing corporate demand and saw a modest 2.75% increase in average room rate. Madrid saw a decline of 2.59% in average room rate. This was driven by the movement in exchange rate turning a 3.55% rise in GBP average room rate negative locally.

HRG Interim Hotel Report January June 2016 11 Asia Pacific Focus Hong Kong actually saw a small rise in average room rates in GBP. Movement in exchange rate saw that translated locally into a small fall in average room rate. City ARR Local 16 ARR Local 15 Local Var Exc Rate Var HONG KONG HKD 2,184.63 HKD 2,287.85-4.51% -5.77% SINGAPORE SGD 345.47 SGD 336.35 2.71% -3.77% TOKYO JPY 32,688.28 JPY 31,442.73 3.96% -12.72% NEW DELHI INR 13,280.67 INR 12,878.65 3.12% 0.59% MUMBAI INR 11,413.24 INR 11,780.26-3.12% 0.59% BANGALORE INR 9,526.58 INR 9,478.31 0.51% 0.59% HYDERABAD INR 8,479.40 INR 8,714.66-2.70% 0.59% BEIJING CNY 1,344.40 CNY 1,277.31 5.25% 0.57% SHANGHAI CNY 1,359.38 CNY 1,278.99 6.29% 0.57% SYDNEY AUD 359.83 AUD 349.55 2.94% 0.38% Tokyo saw a large increase in average room rate in GBP due to increased demand. However when coupled with a large negative movement in the exchange rate this saw only a modest 3.9% increase locally. An increase in demand in New Delhi has filled many of the new mid-market rooms that came on line over the last 12 months resulting in a modest average room rate growth for the city. Mumbai and Hyderabad saw a softening of demand from a group s perspective which meant there was more capacity. This drove a small negative average room rate movement in both cities. Even with the high supply of hotel rooms in both Beijing and Shanghai, domestic travel within China is driving the average room rates higher. Three months of positive and accelerating growth rates confirm a recovery in business activity for China s hoteliers. The increase in average room rate in Sydney was due to large conferences and special events for the first six months of the year. January to March is High Season and so a combination of summer holiday and also pre and post cruise accommodation influenced demand.

HRG Interim Hotel Report January June 2016 12 MEWA Focus Dubai continues to add new hotel stock in preparation for Expo 2020 and so any new demand is being swallowed up by these new rooms. This together with the exchange rate movement has resulted in a large decline of 9.51% locally in average room rate. City ARR Local 16 ARR Local 15 Local Var Exc Rate Var DUBAI AED 861.99 AED 952.56-9.51% -8.85% ABU DHABI AED 636.08 AED 680.02-6.46% -8.85% MANAMA BHD 88.49 BHD 96.27-8.09% -6.12% ISTANBUL TRL 466.24 TRL 478.73-2.61% 7.20% CAIRO EGP 1,528.09 EGP 1,442.62 5.92% 5.29% DOHA QAR 860.53 QAR 989.86-13.07% -6.04% Abu Dhabi saw a small increase in average room rates in GBP, however the exchange rate movement saw this turn negative in local currency. Istanbul has seen a decline in average room rates in GBP as demand continues to soften with political unrest in Turkey and the war in Syria. Even with the movement in exchange rate the average room rate movement has remained negative locally. Cairo has seen overall demand flat line in the first six months of 2016 with barely any movement in GBP average room rates. This was translated into a modest average room rate growth locally due to the movement in the exchange rate. Doha has seen the effect of the dip in oil prices driving down corporate demand. This coupled with a large movement in exchange rate means the city shows a large 13.07% fall in average room rates in local currency. Manama sees new supply constricting growth in average room rate with a small decline in GBP translated to a larger decline locally due to the movement in the exchange rate.

HRG Interim Hotel Report January June 2016 13 UK Focus London growth for the first six months is lower than the 3.09% seen during 2015. A weaker start to the year in corporate demand and uncertainty around the EU referendum has seen overall demand increase but not to the extent many hotel groups were predicting. Aberdeen continues to feel the effect of the downturn in the oil industry resulting in less demand. Together with several new openings in 2015 means hotels are fighting to retain a shrinking pool of business. As a result the average room rate saw an even sharper decline in the last six months than in 2015 as a whole. Belfast saw a modest decline in average room rate as new bed stock came in to play. The majority of the rest of the UK was quite flat in terms of average room rates with a few exceptions: Edinburgh Strong corporate demand and a buoyant leisure base combined to see a strong first six months for the city seeing a 5.02% rise in average room rate. Liverpool With six new hotels opening in 2015 alone, bed stock in the city has started to outpace demand, resulting in a small fall in average room rates in the first six months of -2.05%. City ARR GBP 15 ARR GBP 15 GBP Variance LONDON GBP 172.12 GBP 169.12 1.77% HEATHROW GBP 98.63 GBP 99.45-0.82% MANCHESTER GBP 98.27 GBP 99.00-0.74% ABERDEEN GBP 97.31 GBP 123.39-21.14% EDINBURGH GBP 94.53 GBP 90.01 5.02% BELFAST GBP 90.65 GBP 92.65-2.16% GLASGOW GBP 90.51 GBP 91.47-1.05% London by Region 2016 Jan-Jun Average Rates by Location Hammersmith & Kensington 167 +1.5% Docklands 178 +6.9% NEWCASTLE GBP 89.41 GBP 89.44-0.03% LIVERPOOL GBP 85.57 GBP 87.36-2.05% CARDIFF GBP 79.75 GBP 78.50 1.59% West End & Central 179-0.5% City 189 +3.5%

HRG Interim Hotel Survey June 2016 14 Now in its 23rd year, the HRG Interim Hotel Report looks at hotel room rates for key business destinations across the world. For more information please contact: Margaret Bowler E margaret.bowler@hrgworldwide.com T +44 (0) 1252 881 000 www.hrgworldwide.com