outlook for the u.s. lodging industry - hospitality net · pdf fileoutlook for the u.s....

ESTO

Outlook for the U.S. Lodging IndustryDuane VinsonVice President

Smith Travel Research

MOF

-8

-6

-4

-2

0

2

4

6

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

Supply % Change

Demand % Change

Total United StatesRoom Supply & Demand Percent ChangeTwelve Month Moving Average – 1989 to September 2009

3.1%

- 6.6%

-1.1%

- 4.8%

▼▼

▼▼

▼▼ ▼

▼▼▼

50

60

70

80

90

100

110

120

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Occupancy (%)ADR ($)

Peak $107.21Sept 2008

$99.30Sept 2009

Peak 64.7%Jan 1997 55.7%

Sept 2009

Total United StatesOccupancy and ADRTwelve Month Moving Average – September 2009

8.7

4.9

9.2

-1.5

7.2

1.3

-4.0 -4.7

-1.6

-12.5

-4.4

-8.4

-20

-15

-10

-5

0

5

10

15

Luxury UpperUpscale

Upscale Mid w F&B Mid wo F&B Economy

SupplyDemand

Chain ScalesSupply/Demand Percent ChangeSeptember 2009 YTD

-11.8

-6.1

-10.9

-9.1

-11.1-9.8 -9.6

-11.7

-5.8

-17.1

-10.2

-5.2

-20

-15

-10

-5

0

Luxury UpperUpscale

Upscale Mid w F&B Mid wo F&B Economy

OccupancyADR

Chain ScalesOccupancy/ADR Percent ChangeSeptember 2009 YTD

3.7

1.6

-8.0

3.1 3.03.0 3.8

-7.5-5.9 -6.0

-7.8

-5.6

-15

-10

-5

0

5

10

Urban Suburban Airport Interstate Resort Small Metro

SupplyDemand

Location SegmentsSupply/Demand Percent ChangeSeptember 2009 YTD

-8.7

-1.4

-8.7

-10.5

-8.9

-11.5

-9.0-8.5

-10.5

-13.0

-2.5

-12.2

-15

-10

-5

0

5

Urban Suburban Airport Interstate Resort Small Metro

OccupancyADR

Location SegmentsOccupancy/ADR Percent ChangeSeptember 2009 YTD

US Regions – Occupancy, ADR, & RevPAR Percent ChangeSeptember 2009 YTD

Occupancy: ▼ -10.1%ADR: ▼ -10.9%

RevPAR: ▼ -20.0%

Occupancy: ▼ -12.4%ADR: ▼ -13.1%

RevPAR: ▼ -23.9%

Occupancy: ▼ -7.8%ADR: ▼ -3.3%

RevPAR: ▼ -11.0%

Occupancy: ▼ -13.0%ADR: ▼ -4.6%

RevPAR: ▼ -16.8%


RevPAR: ▼ -17.1%


RevPAR: ▼ -12.2%


RevPAR: ▼ -14.8%

Occupancy: ▼ -9.1%ADR: ▼ -14.4%

RevPAR: ▼ -22.3%


RevPAR: ▼ -15.3%

TOTAL USOccupancy: ▼ -9.9%

ADR: ▼ -9.1%RevPAR: ▼ -18.1%

-15

-10

-5

0

5

Detroit,

MI

Dallas

, TX

Atlanta,

GA

Los Angele

s-Long B

each

, CA

New O

rlean

s, LA

Minneapolis

-St P

aul, M

N-WI

Chicago, IL

Denver,

CO

Orlando, F

L

Houston, TX

Phoenix, A

Z

Seattle

, WA

Anaheim

-Santa

Ana, CA

Nashvil

le, TN

San D

iego, C

A

Boston, M

A

Total Unite

d States

San Fran

cisco/San

Mate

o, CA

Tampa-St P

etersb

urg, F

L

Philadelp

hia, PA-N

J

St Louis,

MO-IL

Oahu Is

land, HI

New York,

NY

Miami-H

ialea

h, FL

Norfolk-V

irginia B

each, V

A

Washington, D

C-MD-V

A

Top 25 MarketsRoom Demand Percent ChangeSeptember 2009 YTD

-20

-14

-8

-2

4

Detroit,

MIPhoenix,

AZ

Dallas

, TX

Houston, TX

Chicago, IL

Minneapolis

-St P

aul, M

N-WI

Atlanta,

GA

Los Angele

s-Long B

each

, CA

New O

rlean

s, LA

Denver,

CO

Miami-H

ialea

h, FL

San D

iego, C

A

Nashvil

le, TN

Seattle

, WA

Total Unite

d States

Orlando, F

L

Tampa-St P

etersb

urg, F

L

Anaheim

-Santa

Ana, CA

Boston, M

A

New York,

NY

St Louis,

MO-IL

Philadelp

hia, PA-N

J

San Fran

cisco/San

Mate

o, CA

Oahu Is

land, HI

Norfolk-V

irginia B

each, V

A

Washington, D

C-MD-V

ATop 25 MarketsOccupancy Percent ChangeSeptember 2009 YTD

-30

-20

-10

0

New Yor

k, NY

San Fr

ancis

co/San

Mate

o, CA

Phoen

ix, A

ZChic

ago,

IL

San D

iego,

CA

Miami-H

ialea

h, FL

Denve

r, CO

Oahu I

sland

, HI

Orland

o, FL

Los A

ngele

s-Long

Bea

ch, C

A

Minnea

polis

-St P

aul, M

N-WI

Bosto

n, MA

Anaheim

-San

ta Ana

, CA

Seattle

, WA

Philad

elphia

, PA-N

JDetr

oit, M

I

Total

Unit

ed Stat

esDall

as, T

XAtla

nta, G

A

Tampa

-St P

etersb

urg, F

L

Housto

n, TX

St Louis

, MO-IL

Nashvil

le, TN

New O

rlean

s, LA

Norfol

k-Virg

inia B

each

, VA

Washin

gton, D

C-MD-V

ATop 25 MarketsADR Percent ChangeSeptember 2009 YTD

-35

-20

-5

New York,

NY

Phoenix,

AZ

Chicago, IL

Detroit,

MI

San D

iego, C

ADen

ver, C

O

Miami-H

ialea

h, FL

Los A

ngeles-L

ong B

each

, CA

Minnea

polis-S

t Pau

l, MN-W

I

San Fran

cisco/San

Mate

o, CA

Dallas

, TX

Orland

o, FL

Seattle

, WA

Atlanta,

GA

Anaheim

-Santa

Ana, CA

Houston, T

XBosto

n, MA

Total Unit

ed Stat

es

Oahu Is

land, HI

New O

rlean

s, LA

Philad

elphia,

PA-NJ

Tampa-S

t Pete

rsburg

, FL

Nashvil

le, TN

St Louis,

MO-IL

Norfolk-V

irgini

a Bea

ch, V

A

Washing

ton, DC-M

D-VA

Top 25 MarketsRevPAR Percent ChangeSeptember 2009 YTD

Transient Business AnalysisLuxury/Upper Upscale ChainsPercent Change Sept YTD 2006 - 2009

2.3

-0.5

2.0

-4.0

-16.0

0.3

8.15.2

-20

-15

-10

-5

0

5

10

Demand ADR

2006 2007 2008 2009

Group Business AnalysisLuxury/Upper Upscale ChainsPercent Change Sept YTD 2006 - 2009

-4.8

0.0

4.4

-5.2

4.9

0.8

5.3

-15.0

-20

-15

-10

-5

0

5

10

Demand ADR

2006 2007 2008 2009

Group vs. Transient ADR % ChangeLuxury/Upper Upscale ChainsPercent Change Sept YTD 2006 - 2009

5.3 5.24.42

-5.2

-16

4.98.1

-20

-15

-10

-5

0

5

10

Group Transient

2006 2007 2008 2009

Group vs. Transient ADR Luxury/Upper Upscale ChainsSept YTD 2006 – 2009

$148.92

$156.16

$176.92

$143.84

$163.30

$172.30

$148.56 $148.82

$130

$150

$170

$190

Group Transient

2006 2007 2008 2009

$19.46

$23.38

$20.76

.26

$50

$100

$150

$200

$250

$300

Minneapolis-St P

aul, MN-W

I

Atlanta, G

A

Dallas, T

X

Orlando, F

L

New Orle

ans, LA

Phoenix, AZ

Chicago, IL

Philadelphia, P

A-NJ

San Francisco/San M

ateo, CA

Top 25 Markets

San Diego, CA

Los Angeles-Long Beach, C

A

Boston, MA

Washington, DC-M

D-VA

Oahu Island, H

I

New York, N

Y

Transient Group

Group vs. Transient ADR15 Select Markets September 2009 YTD

Total United StatesActive Development Pipeline - RoomsChange From Last Year

Source: STR / TWR / Dodge Construction Pipeline

-29.5%-236,989802,444 565,455Total

-22.5%-33,298147,854114,556Pre-Planning

-31.1%-203,691654,590450,899Active Pipeline

-26.9%-94,762351,652 256,890Planning

-32.6%-34,944107,23972,295 Final Planning

-37.8%-73,985195,699 121,714 In Construction

% ChangeDifferenceSeptember

2008September

2009Phase

22.3

28.2

33.0

36.9

54.2

62.8

0 12 24 36 48 60 72

Economy

Midscale w/out F&B

Midscale w/F&B

Upscale

Upper Upscale

Luxury

Months

Pipeline Projects by ScaleAverage Duration From Pre-Planning to Open


0

50

100

150

200

250

2003/01 2004/01 2005/01 2006/01 2007/01 2008/01 2009/01-60

-40

-20

0

20

40

60

80

UC Rooms % Change

Total United StatesHotel Rooms Under Construction and Percent ChangeJanuary 2003 – September 2009

Under Construction room percentage change measured against same month, prior year.


Total United StatesRooms In Construction by Scale – In Thousands September 2009

4.812.6

31.1

40.2

7.9 5.2

19.9

0

10

20

30

40

50

60

70

Luxury Upper Upscale Upscale Mid w F&B Mid w/o F&B Economy Unaffiliated


Markets with Most Rooms In-ConstructionSeptember 2009

Market # Rooms % Existing Supply

New York 11,254 12.3

Las Vegas 7,011 4.4

Houston 4,561 6.7

Washington, DC 3,597 3.6

Dallas 3,272 4.3

Atlanta 3,195 3.4

LA-Long Beach 2,392 2.5


Total United StatesNewly Abandoned Rooms by MonthSeptember 2008 – September 2009

468

214

451

579

280

1,473

1,169

1,775

422

2,768

1,162

417

854

933

989

1,389

1,631

320

2,926

2,853

4,977

1,613

4,393

6,295

4,523

1,987

2,193

2,931

2,162

1,819

2,139

1,748

512

406

5,711

1,713

2,867

1,372

1,141

7,481

1,383

1,375

426

144

967

498

482

161

450

413

496

161

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

In Construction Final Planning Planning Pre-Planning

3,383

7,838

5,087

5,754

10,8214,450

6,808

10,737

9,035

8,196

7,640

5,032

7,114


Ten Largest Projects in the pipeline

Name Market Open Rooms Phase

• Aria Resort & Casino Las Vegas-Paradise, NV 12/16/09 4004 In Construction• Marriott Marquis Hotel Washington, DC 10/1/13 1167 Final Planning• JW Marriott Conv Ctr Hotel Indianapolis-Carmel, IN 3/10/11 1083 In Construction• Omni Dallas Dallas-Fort Worth, TX 3/1/12 1016 Final Planning• JW Marriott San Antonio San Antonio, TX 1/22/10 1002 In Construction• Myriad Botanical Resort Memphis, TN-MS-AR 9/1/11 1000 Planning• Marriott Marquis @ Music Cty Nashville, TN 6/30/13 1000 Planning• JW Marriott @ LA Live Los Angeles, CA 2/15/10 871 In Construction• Peabody Orlando Addition Orlando, FL 11/1/10 750 In Construction• Cosmopolitan Resort Las Vegas-Paradise, NV 7/1/10 708 In Construction


352

507

729

506

843

683

350280

359

669

542

309

215217135

125

0100200300400500600700800900

1000

Number of Hotels Rooms (hundreds)

2002 2003 2004 20052006 2007 2008 2009Est

Total US - Closed HotelsAnnual 2002 through 2009 estimated

66,946 rooms in 2005 to 13,500 rooms in 2009

JQH: “not over developed, just under demolished”

-1.0-0.50.00.51.0

1.52.02.53.03.5

2003 2004 2005 2006 2007 2008 OND

Total United StatesRoom Supply Percent ChangeJan 2003 – Sep 2009 / Oct – Dec Forecast

Stuck at 3.2

-10

-5

0

5

10

2003 2004 2005 2006 2007 2008 OND

Total United StatesRoom Demand Percent ChangeJan 2003 – Sep 2009 / Oct – Dec Forecast

1.01.8 1.9

1.0

-1.8

1.3 1.32.6 3.0

0.21.3

0.4-0.1

2.80.5

-5.5

1.3

4.0

-8

-4

0

4

8

2003 2004 2005 2006 2007 2008 2009P 2010P 20 YrAverage

Supply % ChgDemand % Chg

Total United StatesSupply/Demand Percent Change2003 – 2010P

-15

-10

-5

0

5

10

2003 2004 2005 2006 2007 2008 OND

Total United StatesOccupancy Percent ChangeJan 2003 – Sep 2009 / Oct – Dec Forecast

0.4

-0.6

0.3

-4.2

-0.2

3.62.9

-8.4-10

-5

0

5

2003 2004 2005 2006 2007 2008 2009P 2010P

Total United StatesOccupancy Percent Change2003 – 2010P

20 Year Average: -0.6%

-15

-10

-5

0

5

10

2003 2004 2005 2006 2007 2008 OND

Total United StatesRoom Rate Percent ChangeJan 2003 – Sep 2009 / Oct – Dec Forecast

5.5

-9.7

-3.4

7.5

0.2

2.5

6.14.2

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

2003 2004 2005 2006 2007 2008 2009P 2010P

Total United StatesADR Percent Change2003 – 2010P

20 Year Average: 3.5%

86.41 91.17 104.09 106.84 96.43 93.1684.0785.30 98.0182.9682.82

$87.73$89.11

$91.15$93.57

$96.74

$99.86

$105.90$107.81$106.65

$85.30

$102.71

80

90

100

110

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

E20

10E

Nominal ADRYr 2000, Grown by CPI

If year 2000 ADR had increased by CPI each year…

Total US Room RatesActual vs. Inflation Adjusted2000 – 2010E

-15

-10

-5

0

5

10

1988q1 1991q1 1994q1 1997q1 2000q1 2003q1 2006q1 2009q1

Demand % Chg

ADR % CHG

Total United StatesHotel Rooms Sold vs. ADR ChangeQuarterly Change – 1988 to Q4 2009E

-25-20-15-10-5

05

101520

2003 2004 2005 2006 2007 2008 2009 OND

Total United StatesRevPAR Percent ChangeJan 2003 – Sep 2009 / Oct – Dec Forecast

7.8

-4.0

-17.1

5.7

-1.8

8.57.9

0.5

-20

-15

-10

-5

0

5

10

2003 2004 2005 2006 2007 2008 2009P 2010P

Total United StatesRevPAR Percent Change2003 – 2010P

20 Year Average: 2.9%

Takeaways

• Supply growth still an issue• Demand declines may be at or near bottom• ADR weakness continues • “Less Worse” 2H 2009• Moderate improvement 2010• Meaningful growth anticipated 2011

[email protected]

615.824.8664

www.strglobal.com

www.hotelnewsnow.com

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