© 2017 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.
Hotel Industry Overview
Long Island CVB
Ali HoytSenior Director, Consulting and Analytics
Total U.S. Review
NY Markets
Long Island Market
Forecasts
Agenda – September 13
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www.hotelnewsnow.com
© 2017 STR. All Rights Reserved.
Total U.S. Review
© 2017 STR. All Rights Reserved.
U.S. Market Cycle
Jan 2007
Jul 2017
$90
$95
$100
$105
$110
$115
$120
$125
$130
54 59 64 69
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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
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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
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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
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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
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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
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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
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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
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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
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
Occupancy ADR
Classes, Occ and ADR % Change, Jul YTD 2017
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Upper End Hotels Are Still Very Busy
72.073.8 73.2
68.1
61.059.5
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
Classes, Occ, Jun YTD 2017
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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.
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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
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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
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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
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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
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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%
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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
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New York Markets
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Albany
NY State
SyracuseRochesterBuffalo
Lower Hudson Valley
NYC Long Island
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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
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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
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Long Island Market
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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
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Long Island Market Cycle
$110
$115
$120
$125
$130
$135
$140
$145
$150
$155
60 65 70 75 80
Jan 2007
Jul 2017
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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%
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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
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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
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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
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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%
Luxury & Upper Upscale Upscale & Upper Midscale Midscale & Economy
Occ ADR RevPAR
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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
Luxury & Upper Upscale Upscale & Upper Midscale Midscale & Economy
ADR RevPAR Occ
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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
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Q2 Drives Group Demand Growth
0
20,000
40,000
60,000
80,000
100,000
120,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2016 201713.2%Jul
YTD
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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
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2016 2017
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Nassau/Long Island79.9% Occ$140 ADR
Suffolk66.7% Occ$151 ADR
Long Island Submarkets
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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
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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
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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
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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
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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
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Forecasts
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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
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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%
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Hurricane Harvey
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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
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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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© 2017 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.
© 2017 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.
Thank You!
Ali Hoyt
Senior Director, Consulting & Analytics
@ahoyt_STR
www.linkedin.com/in/alisonhoyt