State of the Industry and Industry ForecastCWBTA
Mark WilliamsNovember 8, 2011
2Copyright Advito 2011
State-of-the-Industry Overview
Airline
Setting
Hotel
Ground Transportation
Meetings
3Copyright Advito 2011
Risk Factors
Economy
Oil price
Security/safety
4Copyright Advito 2011
Global Economic Outlook
The recovery is expected to slow down in 2012 in most regions, including China, and will decline in the eurozone
Source: IMF, World Economic Outlook, June 2011
2010: +5.1% ◄2011: +4.3% ◄2012: +4.5%
2010: +1.8%◄2011: +2.0%◄ 2012: +1.7%
Euro Area
2010: +2.9%◄2011: +2.5%◄2012: +2.7%
USA
World
2010: +10.3%◄2011: +9.6%2012: +9.5%
China
GDP◄ indicates revision to previous forecast
5Copyright Advito 2011
2012 Outlook
Global hotel rates increases are projected at 2-6%, based on higher demand and hotels’ push for higher rates
Demand is close to 2008 pre-recession levels and will continue to grow in 2012, barring negative economic developments
Overcapacity in some markets and a weakening in economic confidence will keep airfare increases to 3-5% increase globally
After two years of little change, rental car rates may rise 4-6%
Source: Advito 2012 Industry Forecast, Sept. 2011
Meeting rates will rise faster in 2012 and accelerate in 2013
6Copyright Advito 2011
Additional factors threatening to push up total ticket prices include consolidated airline entities, distribution/card payment fees and EU Emissions Trading System
Air Outlook 2012
Barring sharp economic decline or oil price surges, demand should continue to grow
Capacity cuts anticipated for Q4 2011 are likely to be sustained into 2012, but over-supply may remain in some regions
Fare increases of 3-5% will be less drastic than in 2011, when oil price prompted significant fuel surcharges
Source: Advito 2012 Industry Forecast, Sept. 2011
7Copyright Advito 2011
Airfare Predictions for 2012North America
Forecast of average development of air fares used by corporate clients 2012 against 2011 (in USD)
Business Economy
Intercontinental +5% +5%
Regional +3% +5%
Source: Advito 2012 Industry Forecast, Sept. 2011
Rising demand and supplier capacity discipline will result in YOY increases in airfares
8Copyright Advito 2011
Airfare Predictions for 2012Latin America
Forecast of average development of air fares used by corporate clients 2012 against 2011 (in $ USD)
Business Economy
Intercontinental +4% +4%
Regional +5% +5%
Source: Advito 2012 Industry Forecast, Sept. 2011
Following similar trends and capacity/demand balance, Latin American air costs will also increase
9Copyright Advito 2011
Airfare Predictions for 2012Europe
Forecast of average development of air fares used by corporate clients 2012 against 2011 (in € EUR)
Business Economy
Intercontinental +5% +5%
Regional +3% +5%
Source: Advito 2012 Industry Forecast, Sept. 2011
Sluggish home economies have led to softening regional demand but airfares are still expected to increase
10Copyright Advito 2011
Airfare Predictions for 2012Middle East
Forecast of average development of air fares used by corporate clients 2012 against 2011 (in € EUR)
Business Economy
Intercontinental +5% +4%
Regional +3% +5%
Source: Advito 2012 Industry Forecast, Sept. 2011
Large capacity increases by Middle East carriers will temper ability to raise fares even with higher demand
11Copyright Advito 2011
Airfare Predictions for 2012Asia-Pacific
Forecast of average development of air fares used by corporate clients 2012 against 2011 (in $ USD)
Business Economy
Intercontinental +4% +4%
Regional +4% +5%
Source: Advito 2012 Industry Forecast, Sept. 2011
Demand is increasing rapidly with the strength of the region’s economic rebound
12Copyright Advito 2011
0%
10%
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30%
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May
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Advance Booking Behavior
Same Day
> 0 and <=3 Days
> 3 and <= 7 Days
> 7 and <= 14 Days
> 14 and <=21 Days
> 21 Days
Advance Booking
Bookings made more than 14 days in advance remain at about 50% share of a fluctuating behavior pattern
Source: Advito 2012 Industry Forecast, August 2011
North America
13Copyright Advito 2011
Recommendations for Buyers – Air
Be wary of significant over-commitment to volume or market-share targets during negotiations
Negotiate hard on the pockets of over-capacity in the market
Joint ventures and other airline consolidations will pose an increasing challenge to managed air programs
A reliable way to reduce average ticket price is to find ways to avoid last-minute purchases
Source: Advito 2012 Industry Forecast, Sept. 2011
14Copyright Advito 2011
Spotlight: Oil Prices
Fears of economic slowdown have moderated skyrocketing oil pricesEvery US$10 rise in barrel price pushes up total ticket price by approximately 3% (higher fares and fuel surcharges)IMF forecasts US$105/barrel in 2012With a sharp rise in oil, Substantial increase in total ticket prices may prompt fall in corporate demand
Source: Advito 2012 Industry Forecast, Sept. 2011
15Copyright Advito 2011
Spotlight: Ancillary FeesThe Issues
Total price
VisibilityLeverage
16Copyright Advito 2011
Spotlight: Ancillary FeesThe Trends
Airlines collected $21.46bn in ancillary fee revenue in 2010 – an increase of 59% YOY and 775% over 2007
Expect airlines to continue experimenting with different forms of unbundling and merchandising
Our recommendations to clients Continue to create policy on unbundled services, including specifying which can be reimbursed and which cannot
Press suppliers to provide adequate reporting
Try to negotiate on rebundled packages as part of corporate agreements
Source: Advito 2012 Industry Forecast, Sept. 2011
17Copyright Advito 2011
Spotlight – Europe Card Payment Fees
Source: Advito 2012 Industry Forecast, Sept. 2011
In 2011, BA and Lufthansa Group announced fees for credit card paymentsWhat should clients be doing?– Prepare for other airlines to
follow suit/expand similar fee systems
– Make the fees a topic for negotiation in upcoming deals
– Evaluate payment options
18Copyright Advito 2011
Spotlight – EU Emissions Trading System
EU will include all airlines in ETS as of Jan. 1, 2012
ETS sets a cap on permissible emissions; beyond that cap, companies must buy permits
Non-European airlines are fighting hard against being included in the ETS
Source: Advito 2012 Industry Forecast, Sept. 2011
How much the ETS will cost airlines?How much of that cost they will pass on to passengers?How they will pass it on?
19Copyright Advito 2011
Demand will continue to rise, though at a lower rate than 2011
Rates will rise 2- 6% percent in general, but with another double-digit jump in markets like New York
New capacity will be limited in N. America and Europe but significant in Asia-Pacific
More chains will demand heavy rate increases in opening 2012 negotiations
Hotel Outlook 2012
Source: Advito 2012 Industry Forecast, Sept. 2011
20Copyright Advito 2011
Hotel ADR: 2012 Forecast by Region
Forecast of average development of hotel rates used by corporate clients in 2012 against 2011 (local currency)
North America +5-6%
Europe+2-3%
Asia-Pacific+6-7%
Middle East +6-7%
Africa+3-4%
Steadily increasing demand will usher in moderate ADR increases
Latin America +5-6%
Source: Advito 2012 Industry Forecast, Sept. 2011
21Copyright Advito 2011
Hotel ADR: 2012 Forecast by Market
Forecast of average development of hotel rates used by corporate clients in 2012 against 2011 (local currency)
US +5-6%
RU +3-5%
CN +4-6% KO +3-5%
SG +2-4%
AE +2-4%IN +4-6%MX +1-3%
BR +4-6%
CH-PT-SE +0-2%ES-IE-IT +1-3% NL-TR-UK +1-3% AT-BE-CZ +2-4%FR-DE +2-4%
Source: Advito 2012 Industry Forecast, Sept. 2011
AR +5-7%AU +2-4%
CA +4-6%
JP +0-2%
DK-FI-NO +2-4%
ZA +2-4%
SA +2-4%
Moderate increases are expected due to continuing though moderated economic growth tempered by new supply
22Copyright Advito 2011
Spotlight – London Olympics (July 27- Aug.12, 2012)
Take action nowBlock space in advanceLook at extended-stay properties as an alternativeConsider locations outside London, up to an hour away by train, such as Reading, Oxford or CambridgeBe aware of the impact that the Olympics will also have on air supply to and from LondonReview the situation at the start of 2012
Hotels may ask 5-10x their normal rate
Demand will skyrocket
23Copyright Advito 2011
Recommendations for Buyers – Hotel
Insist on negotiated rate being an LRA rate
Source: Advito 2012 ndustry Forecast, Sept. 2011
Expand number of hotels in RFP process but concentrate on fewer properties in final decision, except in large, high demand markets
Be wary of dynamic pricing, and be sure to negotiate more than 10 percent off the BAR with dynamic pricing
Consider imposing city caps based on total cost of stay
Negotiate hotel contracts for transient travelers to cover small meetings (up to 50 room nights)
24Copyright Advito 2011
2012 Outlook – Meetings
Demand will continue to grow worldwide, approaching peak 2008 levels by year-end 2012
Rates are expected to return to 2008 levels in 2013/2014
Rates for meetings will rise faster in 2012 than in 2011 and accelerate even more sharply in 2013
Lead-times may start to lengthen as supply at preferred hotels dwindles
Source: Advito 2012 Industry Forecast, Sept. 2011
25Copyright Advito 2011
Recommendations for Buyers – Meetings
Watch out for suppliers being less flexible in negotiating terms and conditions
With the negotiating environment likely to be even tougher in 12 months’ time, consider the option of multi-year deals with suppliers
Book ahead, especially in high-demand cities
Do not expect to find upscale hotel bargains any more
Source: Advito 2012 Industry Forecast, Sept. 2011
Be more prepared to consider second- and third-tier cities.
26Copyright Advito 2011
2012 Outlook – Car Rental
Rate increases will be minor (4-6%) thanks to strong competition, but total cost of rental will continue to climb (ancillary charges, taxes, insurance, fuel)
Demand will continue to rise steadily, and providers will keep inventory tightly aligned
Source: Advito 2012 Industry Forecast, Sept. 2011
27Copyright Advito 2011
Spotlight – Car Sharing
Corporate interest is likely to grow in 2012Good for less-than-a-day rentalsAdministrative processing provides good management informationEnvironmentally friendly aspect–better vehicle utilization and introduction of electric cars
Source: Advito 20112 Industry Forecast, Sept. 2011
Companies which need car rentals in major cities should
evaluate the market
Analyze your existing rental program in more detail
28Copyright Advito 2011
Recommendations for Buyers – Car Rental
Negotiate harder on ancillaries and other charges, such as refueling premiums
Source: Advito 2012 Industry Forecast, Sept. 2011
Revisit car rental program before suppliers start to push up their rates
Book further in advance
Evaluate relative financial costs of private vehicle use vs. car rental
Set a policy on ancillary items (e.g., satellite navigation systems)
29Copyright Advito 2011
2012 Outlook – Rail
Source: Advito 2012 Industry Forecast, Sept. 2011
Expect price increases of 4-5%, on a par with 2011
Demand and price are provisionally forecast to be flat in 2012, although that could change with the introduction of several planned new domestic LCCs
Distribution of international rail will remain challenging
French national operator SNCF could lose market share as they begin major network renovations
Europe
Japan
30Copyright Advito 2011
Thank You!
31Copyright Advito 2011
Cost per Mile: Asia Pacific
Source: Advito 2012 Industry Forecast, August 2011
Asia Pacific - USD Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11Intercontinental Business CPM 35.4 39.0 40.1 39.9 38.2 42.5 40.1 41.2 39.5 40.3 38.3 44.5 43.3Intercontinental Economy CPM 13.8 13.6 14.6 13.0 13.2 13.5 16.4 14.9 15.2 14.2 15.2 15.4 17.4
Regional Business CPM 50.6 49.2 48.0 47.0 43.5 46.5 48.7 41.9 46.4 46.6 48.6 49.9 52.9Regional Economy CPM 23.2 25.3 25.6 26.6 27.5 29.7 30.1 28.0 29.1 30.8 35.8 32.2 32.9
-20%
-10%
0%
10%
20%
30%
40%
50%
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11
Cost per Mile (y-o-y)
Inter-continental Business Inter-continental Economy Regional Business Regional Economy
32Copyright Advito 2011
Cost per Mile: Europe
Source: Advito 2012 Industry Forecast, August 2011
EUROPE - EUR Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11Intercontinental Business CPM 36.1 35.7 37.3 34.5 34.1 33.9 33.6 31.4 33.0 34.7 34.3 33.3 35.5Intercontinental Economy CPM 14.9 14.8 11.6 11.8 12.5 11.5 11.9 11.2 11.4 10.9 13.4 11.8 15.0
Regional Business CPM 48.4 45.2 51.7 46.8 40.7 40.6 43.6 37.5 39.4 38.2 40.6 42.5 43.4Regional Economy CPM 29.2 26.8 26.7 27.9 29.4 29.2 27.5 26.3 25.9 27.5 28.3 26.7 29.1
-30%
-20%
-10%
0%
10%
20%
30%
40%
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11
Cost per Mile (y-o-y)
Inter-continental Business Inter-continental Economy Regional Business Regional Economy
33Copyright Advito 2011
Cost per Mile: Middle East
Source: Advito 2012 Industry Forecast, August 2011
Middle East - EUR Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11Intercontinental Business CPM 30.2 30.1 33.0 33.9 25.3 22.4 25.7 32.6 31.9 30.8 27.4 29.3 32.5Intercontinental Economy CPM 12.9 10.6 9.2 11.6 10.2 8.4 10.0 11.0 10.5 12.0 8.3 9.1 11.0
Regional Business CPM 37.0 37.7 42.2 44.8 38.1 37.7 40.2 44.8 48.5 48.0 52.9 47.0 48.6Regional Economy CPM 22.7 23.3 15.3 20.9 18.0 20.9 21.2 17.9 17.2 16.6 19.9 21.0 21.5
-100%
-50%
0%
50%
100%
150%
200%
250%
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11
Cost per Mile (y-o-y)
Inter-continental Business Inter-continental Economy Regional Business Regional Economy
34Copyright Advito 2011
Cost per Mile: Latin America
Source: Advito 2012 Industry Forecast, August 2011
Latin America - USD Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11Intercontinental Business CPM 40.7 33.2 35.4 36.2 34.7 38.4 35.0 33.5 34.6 35.3 42.6 38.9 36.8Intercontinental Economy CPM 14.8 15.3 15.4 14.4 14.0 16.0 18.0 15.4 14.3 16.5 16.8 16.9 15.5
Regional Business CPM 31.1 31.8 32.9 32.8 32.6 31.9 33.8 34.6 33.7 36.4 39.4 41.9 34.6Regional Economy CPM 26.6 22.6 26.2 29.7 30.7 28.4 31.0 27.3 26.9 30.7 30.4 28.8 31.0
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11
Cost per Mile (y-o-y)
Inter-continental Business Inter-continental Economy Regional Business Regional Economy
35Copyright Advito 2011
Cost per Mile: North America
Source: Advito 2012 Industry Forecast, August 2011
North America - USD Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11Intercontinental Business CPM 53.9 52.3 56.6 56.6 55.9 56.7 53.6 55.2 55.9 56.8 57.9 57.9 56.2Intercontinental Economy CPM 21.0 19.8 20.1 18.5 16.7 17.1 18.3 18.1 17.4 18.4 18.8 20.1 21.2
Regional Business CPM 50.3 54.6 47.3 64.6 63.3 60.0 55.8 56.7 60.8 60.6 66.7 65.9 60.1Regional Economy CPM 34.2 32.1 33.1 32.9 33.5 32.9 32.0 32.6 35.5 35.7 36.4 37.2 36.5
-20%
-10%
0%
10%
20%
30%
40%
50%
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11
Cost per Mile (y-o-y)
Inter-continental Business Inter-continental Economy Regional Business Regional Economy
36Copyright Advito 2011
Economy Class Ratio
North America Europe
The use of economy class has increased on regional flights in North America and Europe
Source: Advito 2012 Industry Forecast, August 2011
48% 50% 54%
92% 93% 94%
0%10%20%30%40%50%60%70%80%90%
100%
2009 2010 2011YTD
Econ
omy
segm
ents
as
shar
e of
tota
l
Economy Class RatioInter-continental Regional
51% 54% 51%
87% 87% 89%
0%10%20%30%40%50%60%70%80%90%
100%
2009 2010 2011YTD
Econ
omy
segm
ents
as
shar
e of
tota
l
Economy Class RatioInter-continental Regional
37Copyright Advito 2011
Hotel Rate Developments: United Kingdom
Source: Advito 2012 Industry Forecast, August 2011
United Kingdom JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (GBP) £154 £154 £131 £153 £147 £146 £149 £140 £137 £141 £147 £152 £165
13%
10%11%
3%
8%
5%6% 6%
2%
-2%
0%
9%
3%
7%
0
20
40
60
80
100
120
140
160
180
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
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Cur
renc
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AD
R D
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opm
ent (
Y-o-
Y)Country ADR Last 12 Months
38Copyright Advito 2011
Hotel Rate Developments: United Arab Emirates
Source: Advito 2012 Industry Forecast, August 2011
UAE JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (AED) AED 666 AED 589 AED 603 AED 723 AED 914 AED 944 AED 927 AED 921 AED 977 AED 901 AED 809 AED 693 AED 593
-13%
-6%
-10%
-6%-7%
-15%
-18%
0%
-13%
-1% -1%
1%
-5%
-11%
0
200
400
600
800
1,000
1,200
-20%
-15%
-10%
-5%
0%
5%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
39Copyright Advito 2011
Hotel Rate Developments: Singapore
Source: Advito 2012 Industry Forecast, August 2011
Singapore JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (SGD) SGD 317 SGD 283 SGD 297 SGD 321 SGD 294 SGD 298 SGD 296 SGD 312 SGD 304 SGD 307 SGD 305 SGD 310 SGD 309
9%
15%
5%
12%13%
8% 8%
11%
8%
4%
8%
1%
5%
-2%0
50
100
150
200
250
300
350
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
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Cur
renc
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AD
R D
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opm
ent (
Y-o-
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40Copyright Advito 2011
Hotel Rate Developments: Russia
Source: Advito 2012 Industry Forecast, August 2011
Russia JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (RUR) 9,691р. 8,321р. 7,619р. 9,534р. 8,950р. 9,002р. 8,878р. 8,271р. 8,814р. 8,345р. 8,737р. 8,744р. 8,950р.
-7%
4%
-6%
-9%
1%
-6%
2%
-4%
-2%-2%
-3%
4%
-2%
-8%
0
2,000
4,000
6,000
8,000
10,000
12,000
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
41Copyright Advito 2011
Hotel Rate Developments: Mexico
Source: Advito 2012 Industry Forecast, August 2011
Mexico JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (MXN) $1,236 $1,245 $1,212 $1,253 $1,207 $1,223 $1,260 $1,204 $1,234 $1,182 $1,165 $1,150 $1,166
1%
-8%
-10%
-8%
-5%
-10%
-7%
-4%
-8%
-6%
-7%
-4%
-7%
-6%
0
200
400
600
800
1,000
1,200
1,400
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
42Copyright Advito 2011
Hotel Rate Developments: United States
Source: Advito 2012 Industry Forecast, August 2011
United States JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (USD) $134 $130 $128 $136 $136 $134 $132 $129 $131 $135 $134 $137 $139
-1%
0%
0%
1%
2%
1%
2%
1%
3%
3%
4%
3%
3%4%
0
20
40
60
80
100
120
140
160
-1%
0%
1%
2%
3%
4%
5%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
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AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
43Copyright Advito 2011
Hotel Rate Developments: Korea
Source: Advito 2012 Industry Forecast, August 2011
Republic of Korea JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (KRW) KRW 244,391 KRW 228,410 KRW 229,232 KRW 230,641 KRW 256,904 KRW 255,287 KRW 220,635 KRW 223,201 KRW 230,986 KRW 237,131 KRW 231,705 KRW 240,298 KRW 229,216
3%
15%
8%7% 6%
9%11%
4%3%
-1%
5% 5%
8%
-6%
0
50,000
100,000
150,000
200,000
250,000
300,000
-10%
-5%
0%
5%
10%
15%
20%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
44Copyright Advito 2011
Hotel Rate Developments: Japan
Source: Advito 2012 Industry Forecast, August 2011
Japan JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (JPY) JPY 20,329 JPY 19,454 JPY 18,289 JPY 19,529 JPY 19,209 JPY 19,371 JPY 19,354 JPY 18,608 JPY 20,025 JPY 17,070 JPY 20,461 JPY 19,620 JPY 19,016
-3%-3%
-9%-8%
-7%
-11%
-12%
-11%-10%
-6%
-17%
-3%-3%
-6%
0
5,000
10,000
15,000
20,000
25,000
-20%
-18%
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
45Copyright Advito 2011
Hotel Rate Developments: Italy
Source: Advito 2012 Industry Forecast, August 2011
Italy JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (EUR) € 167 € 156 € 142 € 178 € 166 € 135 € 132 € 144 € 141 € 143 € 156 € 157 € 163
46Copyright Advito 2011
Hotel Rate Developments: Ireland
Source: Advito 2012 Industry Forecast, August 2011
Ireland JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (EUR) EUR 122 EUR 119 EUR 116 EUR 113 EUR 111 EUR 106 EUR 105 EUR 105 EUR 110 EUR 110 EUR 109 EUR 113 EUR 117
2%
-2%
-3%
-1%-2%
-8%
-3%
-6%
-3%
-1%
1%
4%
-3%
-5%
0
20
40
60
80
100
120
140
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
47Copyright Advito 2011
Hotel Rate Developments: India
Source: Advito 2012 Industry Forecast, August 2011
India JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (INR) INR 7,854 INR 7,700 INR 7,648 INR 8,574 INR 8,617 INR 9,099 INR 9,479 INR 9,407 INR 9,607 INR 8,967 INR 8,308 INR 7,937 INR 7,772
-8%
-3%
-4%
-2%
6%
3%
2%
8%
2%
6%
3%5%
-1% -1%
0
2,000
4,000
6,000
8,000
10,000
12,000
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
48Copyright Advito 2011
Hotel Rate Developments: Germany
Source: Advito 2012 Industry Forecast, August 2011
Germany JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (EUR) € 116 € 110 € 104 € 135 € 125 € 116 € 112 € 119 € 118 € 119 € 116 € 123 € 116
-7%
1%
-1%
-4%
8%
3%
-1% -1%
3% 3%
6%
1%
11%
0%
0
20
40
60
80
100
120
140
160
-10%
-5%
0%
5%
10%
15%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
49Copyright Advito 2011
Hotel Rate Developments: France
Source: Advito 2012 Industry Forecast, August 2011
France JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (EUR) € 189 € 170 € 156 € 188 € 180 € 158 € 164 € 159 € 156 € 161 € 161 € 180 € 202
7%
2% 2%
8%
13%
11%
0%
7%
4%
2%1%
3%
5%
7%
0
50
100
150
200
250
-2%
0%
2%
4%
6%
8%
10%
12%
14%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
50Copyright Advito 2011
Hotel Rate Developments: China
Source: Advito 2012 Industry Forecast, August 2011
China JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (CNY) CNY 1,019 CNY 1,010 CNY 953 CNY 1,072 CNY 1,166 CNY 1,035 CNY 1,038 CNY 1,056 CNY 981 CNY 1,018 CNY 1,104 CNY 1,045 CNY 1,042
1%
4%
6%
-1%
6%
16%
5%
7%8%
3%2%
4%
1%2%
0
200
400
600
800
1,000
1,200
1,400
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
51Copyright Advito 2011
Hotel Rate Developments: Canada
Source: Advito 2012 Industry Forecast, August 2011
Canada JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (CAD) $165 $158 $157 $160 $157 $150 $146 $144 $146 $147 $146 $154 $159
9%
5%4%
3%4%
5%
4%
2%
-1% -1%
2%
-2% -2%
-4%
0
20
40
60
80
100
120
140
160
180
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
52Copyright Advito 2011
Hotel Rate Developments: Brazil
Source: Advito 2012 Industry Forecast, August 2011
Brazil JUN 10 JUL 10 AUG 10 SEP 10 OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11Local ADR (BRL) BRL 229 BRL 220 BRL 223 BRL 229 BRL 223 BRL 229 BRL 210 BRL 230 BRL 242 BRL 246 BRL 251 BRL 248 BRL 246
20%
6%
9%9%
16%
7%
11%
3% 3%
5%
8%
13%
5%
7%
0
50
100
150
200
250
300
0%
5%
10%
15%
20%
25%
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Mon
thly
AD
R (L
ocal
Cur
renc
y)
AD
R D
evel
opm
ent (
Y-o-
Y)Country ADR Last 12 Months
53Copyright Advito 2011
Hotel Rate Developments: Top U.S. Cities
Highest 2011 ADR increases seen in San Francisco and Dallas
Source: Advito 2012 Industry Forecast, August 2011
Top 2010 2011 U.S. Cities 1Q 2Q 3Q 4Q 1Q 2QATL ADR 132 129 131 137 135 133
Y-o-Y -8.1% -5.8% -1.7% 4.9% 2.6% 3.0%BOS ADR 176 228 235 218 183 240
Y-o-Y -6.9% 1.0% 6.6% 2.2% 3.9% 5.3%CLT ADR 124 125 121 128 131 130
Y-o-Y -6.8% -5.7% -1.3% 1.9% 5.0% 3.8%CHI ADR 147 193 195 200 153 206
Y-o-Y -11.8% -0.1% 5.3% 5.5% 4.1% 6.9%DFW ADR 125 124 125 129 138 132
Y-o-Y -8.2% -4.2% -0.6% 3.8% 10.4% 6.5%DEN ADR 139 140 140 139 141 146
Y-o-Y -4.3% -0.7% -0.3% -0.6% 1.4% 3.9%HOU ADR 135 136 130 131 134 141
Y-o-Y -10.2% -7.5% -5.3% -3.9% -0.8% 3.9%IND ADR 109 113 110 107 109 112
Y-o-Y -6.2% -0.2% -3.2% -4.4% -0.3% -0.8%LAS ADR 134 128 120 129 141 133
Y-o-Y -3.6% 2.2% 6.2% 3.4% 5.0% 3.3%LAX ADR 155 162 162 161 168 169
Y-o-Y -5.2% 0.4% 2.5% 2.1% 8.5% 4.3%
Top 2010 2011 U.S. Cities 1Q 2Q 3Q 4Q 1Q 2QNYC ADR 245 303 304 350 260 329
Y-o-Y -5.3% 12.6% 7.2% 4.2% 6.0% 8.8%ORL ADR 121 119 104 116 130 123
Y-o-Y -8.1% -4.7% -1.2% -0.7% 6.9% 3.3%PHL ADR 157 164 160 163 164 177
Y-o-Y -7.7% -1.1% 2.9% -1.7% 4.6% 8.0%PHX ADR 159 122 104 130 153 120
Y-o-Y -10.3% -0.4% -0.6% -3.5% -3.7% -1.9%PDX ADR 118 121 127 123 117 134
Y-o-Y -12.0% -7.3% -4.0% -2.5% -0.4% 5.9%STL ADR 113 118 118 118 119 125
Y-o-Y -4.3% -0.6% 1.1% 4.0% 2.6% 3.9%SAN ADR 140 144 152 139 143 144
Y-o-Y -9.8% -4.6% 1.0% -1.2% 2.3% -0.1%SFO ADR 187 186 203 205 207 213
Y-o-Y -8.5% -1.7% 3.9% 2.9% 11.1% 14.8%SEA ADR 148 160 170 151 152 163
Y-o-Y -7.0% -4.9% 0.7% 0.7% 3.0% 2.2%WAS ADR 229 260 230 239 234 259
Y-o-Y -3.4% 5.0% 7.0% 0.6% 2.1% -0.4%
54Copyright Advito 2011
Hotel Rate Developments: Top European Cities
London continues to be the best performing market in Europe
Source: Advito 2012 Industry Forecast, August 2011
Top Euro Cities 2010 2011ADR Local Currency 1Q 2Q 3Q 4Q 1Q 2QAmsterdam ADR 141 160 158 150 146 159
Y-o-Y -4.7% 7.8% 8.1% 5.5% 3.4% -0.3%Barcelona ADR 116 130 129 120 121 147
Y-o-Y -8.4% 2.3% 1.1% 4.1% 4.7% 13.1%Berlin ADR 121 120 127 116 122 118
Y-o-Y -3.1% -0.8% 4.1% -1.9% 0.7% -1.8%Brussels ADR 141 155 139 157 156 163
Y-o-Y -8.0% 3.7% 4.4% 5.9% 10.6% 4.7%Copenhagen ADR 1031 1111 1184 1120 1132 1208
Y-o-Y -4.3% -1.9% 9.1% -10.8% 9.8% 8.8%Dublin ADR 114 119 116 109 111 117
Y-o-Y -13.8% -5.0% -6.2% -8.1% -3.1% -1.2%Duesseldorf ADR 114 116 116 129 122 137
Y-o-Y -4.8% -0.1% 0.1% 0.9% 7.1% 18.6%Frankfurt ADR 145 146 140 139 152 141
Y-o-Y -7.9% 2.2% 1.7% -1.2% 4.3% -3.4%London ADR 156 166 168 171 160 180
Y-o-Y 2.1% 11.3% 9.5% 8.2% 2.5% 8.6%Hamburg ADR 114 117 123 115 114 123
Y-o-Y -6.5% 0.0% 2.7% -3.8% -0.2% 5.0%
Top Euro Cities 2010 2011ADR Local Currency 1Q 2Q 3Q 4Q 1Q 2QMadrid ADR 117 130 115 120 118 130
Y-o-Y -11.0% 5.9% 4.1% -1.4% 0.4% 0.1%Milan ADR 170 171 170 162 171 176
Y-o-Y -6.5% 0.0% 12.2% 4.9% 0.5% 2.8%Moscow ADR 9180 9391 9275 9831 9548 9556
Y-o-Y -14.0% -3.6% 1.0% 1.3% 4.0% 1.8%Munich ADR 124 139 152 142 136 140
Y-o-Y -10.0% 4.1% 7.3% 4.5% 9.9% 1.0%Paris ADR 180 198 199 196 184 215
Y-o-Y -4.8% 3.5% 9.8% 7.3% 2.4% 8.5%Prague ADR 2849 3130 3108 2958 2712 3172
Y-o-Y -11.1% -6.4% 0.8% 0.0% -4.8% 1.3%Rome ADR 147 191 184 167 157 190
Y-o-Y -9.9% 4.1% -1.0% 6.5% 6.3% -0.6%Stockholm ADR 1629 1740 1767 1695 1616 1723
Y-o-Y -3.2% 3.5% 8.0% 1.0% -0.8% -1.0%Vienna ADR 131 141 145 137 131 143
Y-o-Y 2.6% 7.6% 6.1% 2.3% -0.1% 1.0%Zurich ADR 279 288 280 259 260 277
Y-o-Y -7.9% 1.9% 5.6% -5.9% -7.0% -4.0%
55Copyright Advito 2011
Hotel Rate Developments: Top Cities in Asia-Pacific
Hotel rates in APAC are recovering faster than other regions with Hong Kong and Singapore leading the way
Source: Advito 2012 Industry Forecast, August 2011
Top APAC Cities 2010 2011ADR Local Currency 1Q 2Q 3Q 4Q 1Q 2Q
Bangkok ADR 4784 4604 4393 4585 4881 4900Y-o-Y -9.4% -0.1% -5.0% -6.8% 2.0% 6.4%
Beijing ADR 1004 1060 1012 1079 1074 1142Y-o-Y -9.4% -7.0% -2.3% 4.1% 7.0% 7.7%
Dubai ADR 961 702 614 874 915 709Y-o-Y -10.6% -10.4% -3.3% -9.7% -4.8% 0.9%
Hong Kong ADR 1911 1896 1911 2210 2350 2112Y-o-Y 0.4% 13.2% 13.4% 20.2% 23.0% 11.4%
Mumbai ADR 9582 9044 8921 10337 10252 9121Y-o-Y -17.7% -6.6% -1.7% 12.0% 7.0% 0.9%
Seoul ADR 230912 236423 240690 253612 242163 245719Y-o-Y -0.6% 9.4% 10.1% 9.9% 4.9% 3.9%
Shanghai ADR 1136 1281 1250 1289 1195 1228Y-o-Y -7.7% 7.6% 9.2% 13.3% 5.2% -4.2%
Singapore ADR 288 304 301 296 307 308Y-o-Y -1.5% 12.6% 9.8% 8.8% 6.6% 1.2%
Sydney ADR 259 242 237 260 249 238Y-o-Y 2.8% 7.6% 2.3% 3.8% -3.8% -1.6%
Tokyo ADR 22243 22100 20760 20958 21050 21643Y-o-Y -8.3% -3.0% -7.5% -9.3% -5.4% -2.1%
56Copyright Advito 2011
Hotel Rate Developments: Top cities in Canada & Latin America
Inflation is affecting Buenos Aires with the highest ADR increases. Brazil’s economic boom is also affecting their hotel rates
Canada & Lat.Am 2010 2011ADR Local Currency 1Q 2Q 3Q 4Q 1Q 2Q
Bs. Aires ADR 526 548 574 674 667 674Y-o-Y -14.8% -7.4% 4.4% 13.4% 26.8% 23.0%
Lima ADR 498 460 478 512 530 561Y-o-Y -19.7% -9.9% -2.9% -0.8% 6.5% 21.9%
Mexico City ADR 1805 1723 1706 1673 1709 1595Y-o-Y -17.4% -9.1% -12.3% -9.4% -5.3% -7.4%
Montreal ADR 143 164 167 153 148 163Y-o-Y -4.4% 11.0% 6.0% 1.6% 3.1% -0.6%
Rio ADR 328 324 314 330 355 360Y-o-Y -9.7% 8.8% 9.8% 12.0% 8.3% 11.3%
San Jose ADR 76435 72840 74371 73623 75448 77334Y-o-Y 0.6% -3.0% 7.7% 1.5% -1.3% 6.2%
Santiago ADR 100117 93344 81930 93463 84601 88655Y-o-Y -10.0% 0.6% -6.8% 14.5% -15.5% -5.0%
Sao Paulo ADR 283 276 265 264 302 325Y-o-Y 3.1% 7.1% 10.9% 6.9% 6.9% 17.7%
Toronto ADR 150 164 160 160 153 161Y-o-Y -8.0% 5.8% 3.0% 5.0% 2.0% -1.9%
Vancouver ADR 181 170 180 163 153 177Y-o-Y 15.9% 6.4% 2.6% 7.2% -15.2% 4.0%
Source: Advito 2012 Industry Forecast, August 2011
57Copyright Advito 2011
Tier Distribution
The upscale market has been slowly reclaiming its market share while the Upper Upscale segment retains the largest corporate market
Source: Advito 2012 Industry Forecast, August 2011
United States
4.0%
4.0%
4.0%
47.9%
48.4%
47.5%
13.2%
12.5%
11.4%
32.1%
32.3%
33.9%
1.6%
1.6%
1.7%
0% 20% 40% 60% 80% 100%
2011 YTD
2010
2009
% of Room Nights
Tier Distribution
Luxury Upper Upscale Upscale Mid Scale Economy Mixed
58Copyright Advito 2011
Hotel Supply Growth
Source: Lodging Econometrics, Construction Pipeline August 2011
For 2012, most new hotels in the US are planned for NY, while in Europe, UK is getting a third of new construction (Olympics)
United States