It’s About (High) Tide for the Group Market

Steve Prats

Friday, 8:45 AM

INDUSTRY ANALYSIS

•  $802 Million Rooms Revenue Booked •  $1.5 Billion Total Meetings Spend •  4.5 Million Room Nights Booked •  651 Cities Outside of North America

Booked •  35,000 Programs Booked •  Over 100 Countries Booked

2012 PRODUCTION

•  Q1/Q2 2013 vs. Q1/Q2 2012

•  Revenue +13%

•  Room Nights +10%

•  Average Daily Rate +3%

2012 & 2013 Q1-Q2 PRODUCTION

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

2009 2010 2011 2012

REVENUE ($M)

$350

$360

$370

$380

$390

$400

$410

$420

$430

2012 2013

Annual Trends Quarter 1 & 2 Trends

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2009 2010 2011 2012

ROOM NIGHTS (000)

1,900

1,950

2,000

2,050

2,100

2,150

2,200

2,250

2012 2013

Annual Trends Quarter 1 & 2 Trends

AVERAGE ROOM RATE ($)

0 20 40 60 80

100 120 140 160 180 200

3%

AVERAGE DAILY RATE BY CHAIN SCALE

$67

$106 $106

$129

$167

$281

$76

$105 $108 $133

$167

$299

$77

$100 $112

$130

$174

$313

$-

$50

$100

$150

$200

$250

$300

$350

Economy Midscale Upper Midscale

Upscale Upper Upscale

Luxury

2011

2012

2013 YTD

188 209 211 204 198

170 154

0

50

100

150

200

250

2007 2008 2009 2010 2011 2012 2013YTD

AVERAGE LEAD TIME

225 225 216 217 205 179 186

0

50

100

150

200

250

2007 2008 2009 2010 2011 2012 2013YTD

AVERAGE PROGRAM SIZE

MEETING AND TRAVEL BUDGET CHANGES 2012 COMPARED TO 2011

Increase 27%

Decrease 13%

No Change

60%

Source: 2013 HB Associate Survey*

MEETING AND TRAVEL BUDGET CHANGES 2013 COMPARED TO 2012

Increase 37%

Decrease 12%

No Change 51%

Source: 2013 HB Associate Survey*

RFP STATISTICS

•  Sample Search: Client needs 50 rooms for 3 nights in Chicago with a room rate between $150 and $200. HB books 65 different venues that would all meet this Client’s needs

•  HB receives proposals in Cvent from 91% of the hotels that we send the RFP to

•  62 % of HB RFPs were sent to 15 properties or less

INDUSTRY TRENDS Budget

•  5-10 years ago a meeting planner’s job was to find a hotel that fit for a specific budget

•  Now, their job is to find the “best value”

Food & Beverage •  In the past, meeting planners felt obligated to provide nearly all

meals for conference attendees •  Today attendees expect to pay for some of their own meals

Time

•  Meeting length is decreasing – covering three days rather than a week - Due to “time poverty” and busy schedules

INDUSTRY TRENDS •  Industry RevPar is expected to continue to increase

an estimated 4-6.5% compounded

•  Demand for rooms continues to outpace new supply

•  Hotel companies report 90+% of group goals are on the books for 2013. Less reliance on short term groups should allow hotels to better manage yield

•  Rates are increasing but remain below the historic highs of 2007 and 2008 in many markets

USTA – EFFECT ON THE HOSPITALITY INDUSTRY

•  “Keep America Meeting” – National agenda aimed to increase the meeting industry’s relevancy, accessibility, and competitiveness

•  Visa Waiver Program

•  Generated the travel of 18 Million people into the U.S. •  2/3 of all overseas visitors traveled this way •  Annual spend of these travelers - $69 Billion

•  Visa processing capacity grew by 140%in Brazil and $120% in China

- US Travel Association – “Travel Makes History”