Hotel Industry Overview · 2018-01-15 · Occ Growth Will Be Hard To Come By For Most Classes 0.3 0.1 0.1 0.0 0.8 0.8 1.8 1.8 1.5 1.6 2.2 2.9 Luxury Upper Upscale Upscale Upper Midscale

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Hotel Industry Overview

Long Island CVB

Ali HoytSenior Director, Consulting and Analytics

[email protected]

Total U.S. Review

NY Markets

Long Island Market

Forecasts

Agenda – September 13

© 2017 STR. All Rights Reserved.

www.hotelnewsnow.com


Total U.S. Review


U.S. Market Cycle

Jan 2007

Jul 2017

$90

$95

$100

$105

$110

$115

$120

$125

$130

54 59 64 69


Demand Growth Continues To Hold

Jul YTD 2017, Total US Results

Actual % Change

Room Supply 1.8% p

Room Demand 2.3% p

Occupancy 66.6% 0.5% p

ADR $127 2.2% p

RevPAR $84 2.7% p


Quarterly RevPAR Growth: Still Growth (But Much Slower)

0

2

4

6

8

10

Q1 '14 Q1 '15 Q1 '16 Q1 '17

Total U.S., Quarterly RevPAR % Change, 2014 – Q2 2017


Demand Growth Steady, Supply Growth Increases To 1.7%

-8

-4

0

4

8

1990 2000 2010

Supply % Change Demand % Change

Total U.S., Supply & Demand % Change, 12 MMA 1/1990 – 7/2017


Occupancy Growth Rapidly Approaching 0%

-10

-5

0

5

1990 2000 2010

Occ % Change ADR % Change

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 7/2017


Declining Occupancies and Rising ADRs Are Not Unprecedented

-4

-2

0

2

4

6

8

1990 1992 1994 1996 1998

OCC % Change ADR % Change

24 Months42 Months

Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 12/1999


RevPAR Growth: 7 Years And Counting

-25

-20

-15

-10

-5

0

5

10

15

1990 2000 2010

Total U.S., RevPAR % Change, 1/1990 – 7/2017

56 Months 89 Months111 Months


Demand and Supply Growth in Equilibrium For Middle Classes

2.6

1.7

4.1 4.0

0.3

-0.4

2.9

1.8

4.1 4.1

1.1

0.4

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

Supply % Change Demand % Change

Supply / Demand % Change, by Class, July 2017 YTD


Occ Growth Will Be Hard To Come By For Most Classes

0.30.1 0.1 0.0

0.8 0.8

1.8 1.81.5 1.6

2.2

2.9


Occupancy ADR

Classes, Occ and ADR % Change, Jul YTD 2017


Upper End Hotels Are Still Very Busy

72.073.8 73.2

68.1

61.059.5


Classes, Occ, Jun YTD 2017


Transient Segment – Rooms reserved at rack rate, corporate negotiated, package, government rate or rooms booked via third party websites.

Group Segment – Rooms sold simultaneously in blocks of 10 or more.


Limited Group Demand Growth

-2%

-1%

1%

2%

3%

4%

5%

6%

7%

2012 2013 2014 2015 2016 2017

Transient Group

Group & Transient Demand % Change, 12 MMA, 1/2012 – 7/2017


Transient ADR Growth Slowing Despite High Occupancy

-20%

-15%

-10%

-5%

0%

5%

10%

15%

2004 2006 2008 2010 2012 2014 2016

Transient Group

Transient & Group ADR % Change, 12 MMA, 1/2004 – 7/2017


July YTD 2017: New Supply Hits NYC, Miami

July 2017 YTD ADR % Change in Top 25: 5 Best / 5 Worst Performing ADR % Markets

Market OCC % ADR % Change Influenced By

Washington, DC-MD-VA 74.1 6.2 Inauguration / Women’s March

Seattle, WA 78.1 5.0

Anaheim/Santa Ana, CA 79.0 4.8

Phoenix, AZ 70.7 4.8

Nashville, TN 74.5 4.5

New Orleans, LA 71.4 -0.8

New York, NY 84.7 -1.9 New Supply

San Francisco/San Mateo, CA 83.2 -2.4 Superbowl L 2016 / Moscone Center Closed

Philadelphia, PA-NJ 68.3 -2.8 DNC 2016

Miami/Hialeah, FL 79.2 -4.1 New Supply


In Construction Growth Still Strong (But Slowing)

Phase 2017 2016 % Change

In Construction 189 171 10%

Final Planning 219 197 12%

Planning 184 162 14%

Under Contract 592 530 12%

Total US Pipeline, by Phase, ‘000s Rooms, July 2016 and 2017


Limited Service Construction is the Name of the Game

9.1

26.3

60.3 61.5

9.32.3

29.1

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated

US Pipeline, Rooms Under Construction , ‘000s Rooms, by Scale, July 2017

62%


Construction in the Top 25 Markets

Market Rooms % of ExistingSupply

Market Rooms % of ExistingSupply

New York, NY 14,714 12.6 Philadelphia, PA-NJ 2,537 5.3

Dallas, TX 6,923 8.3 San Francisco/San Mateo, CA 2,201 4.3

Houston, TX 5,247 6.1 San Diego, CA 1,955 3.2

Nashville, TN 5,164 12.7 Minneapolis/St Paul, MN-WI 1,884 4.5

Los Angeles/Long Beach, CA 5,029 5.0 Phoenix, AZ 1,754 2.7

Denver, CO 4,951 10.8 Detroit, MI 1,686 3.9

Seattle, WA 4,462 9.9 Anaheim/Santa Ana, CA 1,645 2.9

Washington, DC-MD-VA 4,182 3.8 Tampa/St Petersburg, FL 1,506 3.3

Chicago, IL 4,070 3.5 St Louis, MO-IL 1,219 3.7

Atlanta, GA 3,716 3.8 New Orleans, LA 844 2.1

Boston, MA 3,660 6.6 Norfolk/Virginia Beach, VA 303 0.8

Miami/Hialeah, FL 3,270 5.9 Oahu Island, HI 180 0.6

Orlando, FL 2,647 2.1Top 25 Markets, Rooms Under Construction, July 2017


New York Markets


Albany

NY State

SyracuseRochesterBuffalo

Lower Hudson Valley

NYC Long Island


Syracuse Gains Most New Supply,Long Island Only Market with Demand Decline

New York Markets, Supply and Demand Percent Change, Jul YTD 2017

-2%

0%

2%

4%

6%

8%

10%

Albany/Schenectady

Buffalo Long Island LowerHudsonValley

New YorkState

NYC Rochester Syracuse

Supply Demand


Mixed Performance Across Markets

New York Markets, Occ/ADR/RevPAR Percent Change, Jul YTD 2017

-6%

-4%

-2%

0%

2%

4%

6%

Albany/Schenectady

Long Island New YorkState

Rochester

Occ ADR RevPAR


Long Island Market


Long Island Market

15,890 Hotel Rooms200 Hotels

66% STR Sample

13.6%

17.8%

22.3%15.9%

6.5%

23.9%

Luxury Class

Upper UpscaleClass

Upscale Class

UpperMidscale Class

Midscale Class44%

Independent Properties


Long Island Market Cycle

$110

$115

$120

$125

$130

$135

$140

$145

$150

$155

60 65 70 75 80

Jan 2007

Jul 2017


Demand Down YTD, Rate Growing at Slower Pace

Long Island, Jul 2017 YTD

Actual % Change

Room Supply 1.4%

Room Demand -0.5%

Occupancy 71.3% -1.9%

ADR $148 1.1%

RevPAR $106 -0.8%


Supply Outpacing Demand Growth

Long Island, Supply/Demand Percent Change, TTM Jan 2006 – Jul 2017

-10%

-5%

0%

5%

10%

15%

20%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Supply Demand


Rate Growth Slowing With Consistent Occ Declines

Phoenix Market: OCC & ADR % Change12 Month Moving Average 2003 to July 2014

Long Island, Occ/ADR Percent Change, TTM Jan 2006 – Jul 2017

-15%

-10%

-5%

0%

5%

10%

15%

20%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

ADR Occ


Supply and Demand Concentrated in Upscale/Upper Midscale

Long Island Collapsed Classes, Supply and Demand Percent Change, Jul YTD 2017

-8%

-6%

-4%

-2%

0%

2%

4%

6%

Luxury & Upper Upscale Upscale & Upper Midscale Midscale & Economy

Supply Demand


2.89% RevPAR Growth in Midscale/Economy

Long Island Collapsed Classes, Occ/ADR/RevPAR Percent Change, Jul YTD 2017

-8%

-6%

-4%

-2%

0%

2%

4%

6%


Occ ADR RevPAR


Lowest Occ in Upper Tier Hotels

Long Island Collapsed Classes, Occ/ADR/RevPAR, Jul YTD 2017

62%

64%

66%

68%

70%

72%

74%

76%

78%

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180


ADR RevPAR Occ


Transient Demand Growth 4.6% YTD

4.6%Jul

YTD

0

50,000

100,000

150,000

200,000

250,000

300,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2016 2017


Q2 Drives Group Demand Growth

0

20,000

40,000

60,000

80,000

100,000

120,000


2016 201713.2%Jul

YTD


Contract Demand -30% YTD

-30.5%Jul

YTD

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000


2016 2017


Nassau/Long Island79.9% Occ$140 ADR

Suffolk66.7% Occ$151 ADR

Long Island Submarkets


RevPAR Growth in Nassau, Decline in Suffolk

Long Island Submarkets, Occ/ADR/RevPAR Percent Change, Jul YTD 2017

-3%

-2%

-1%

0%

1%

2%

3%

Nassau/Long Island, NY Suffolk, NY

Occ ADR RevPAR


Cape Cod and Long Island Declining at Similar Levels

Long Island, Newport, Cape Cod, Occ/ADR/RevPAR Percent Change, Jul YTD 2017

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

Long Island Newport Cape Cod

Occ ADR RevPAR


Long Island Achieves Highest Occ Against Comps

Long Island, Newport, Cape Cod, Occ/ADR/RevPAR, Jul YTD 2017

71.358.2 54.4

$148.45

$208.91

$167.54

$105.78 $121.63

$91.18

Long Island Newport Cape Cod

Occ ADR RevPAR


7 Projects in the Active Pipeline

Phase Rooms Projects

In Construction 378 3

Final Planning 429 3

Planning 200 1

Under Contract 1,007 7

Long Island, Pipeline, July 2017


3 Hotels Currently In Construction

Project Rooms Projected Opening

Homewood Suites Ronkonhoma 122 Q3 2018

Residence Inn Long Island East End 131 Q4 2017

Courtyard Long Island Central Islip 125 Q4 2017

Long Island, Pipeline, July 2017


Forecasts


Total U.S. Forecast

Outlook

2017Forecast

2018Forecast

Supply 2.0% 2.1%

Demand 2.0% 1.9%

Occupancy 0.0% -0.2%

ADR 2.3% 2.5%

RevPAR 2.3% 2.3%Updated August 2017


Long Island Forecast

Outlook

2017Forecast

2018Forecast

NYC 2018 Forecast

Occupancy -1.5% -0.5% 0.6%

ADR 2.2% 2.8% 0.6%

RevPAR 0.6% 2.3% 1.2%


Hurricane Harvey


Things are still good, but…

Travel Trending up …but international visitation down

Demand Still growing …but group business stagnant

Room Rates Growing …but only at inflationary levels

New Supply Below average …but impacting some markets

Profits Near peak …but burdened by payroll & property tax increases


Summary

Industry still at record-setting levels, but growth is slowing

ADR will account for most of RevPAR growth

Limited new supply for Long Island

No crash in sight, but certain uncertainty is the new norm

Questions?

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Thank You!

Ali Hoyt

Senior Director, Consulting & Analytics

[email protected]

@ahoyt_STR

www.linkedin.com/in/alisonhoyt

Documents

Hotel Industry Overview · 2018-01-15 · Occ Growth Will Be Hard To Come By For Most Classes 0.3 0.1 0.1 0.0 0.8 0.8 1.8 1.8 1.5 1.6 2.2 2.9 Luxury Upper Upscale Upscale Upper Midscale