10th NEW YEAR HOTEL · 2014 provided a number of brand and operator selection / contract...

10th NEW YEAR HOTEL

INVESTMENT SUMMIT, 2015 Tuesday, 6 January

10th NEW YEAR HOTEL INVESTMENT SUMMIT, 2015

AGENDA

Welcome Nicholas Pattie, Managing Director, Whitebridge Hospitality

Release of 2014 Performance Trends Elizabeth Winkle, Managing Director, STR Global

Transaction Trends and Outlook for 2015 Philip Camble, Director, Whitebridge Hospitality

Closing Remarks Andrew Hepner, Partner, Mayer Brown


WELCOME

Nicholas Pattie

Managing Director, Whitebridge Hospitality


Whitebridge Hospitality Strategic Advisory Projects a welcome return to core services in the UK and Europe during 2014

Expert evidence for the Government of Hungary at ICSID (Washington DC) in relation to an integrated resort development

Commercial due diligence for Osprey Equity Partners investment in Spitalfields Feasibility study for Titanic Quarter hotel, Belfast

Strategic advice

Commercial due diligence for LJ Capital


Whitebridge Hospitality Management Selection Projects 2014 provided a number of brand and operator selection / contract negotiation assignments across Europe

Hotel development at the American Express Community Stadium, Brighton City Quays’ hotel, Belfast Harbour

Brentford Football Club hotel development New Peterhof hotel, St Petersburg


Whitebridge Hospitality Asset Management Assignments We were involved in asset management across six European countries in 2014

The Morrison Dublin, a Doubletree by Hilton hotel

Espiche Golf Resort, Algarve Grand Tirolia, Kitzbuhel (hotel, golf and spa)


RELEASE OF 2014 PERFORMANCE TRENDS

Elizabeth Winkle

Managing Director, STR Global


Let the Good Times Roll Nov 2014 YTD RevPAR % Change, Constant Currency USD, Europe in EUR


Strong Industrial Fundamentals Supply & Demand % Change, Nov 2014 YTD

0

1

2

3

4

5

6

7

8

9

10

North America Central &South America

Europe Middle East Africa Asia Australia &Oceania

Supply Demand


Countdown: 14 from 2014


#14 Europe: International Arrivals +20m YOY

# of international tourist arrivals in millions (Source: UNWTO)

531 Europe

2012

Global 1.036

583 Europe

2014 f

Global 1.132

514 Europe

2011

Global

996

563 Europe

2013

Global 1.087


#13 Demand: +10% from Previous Peak

12MMA Demand; Nov 2007 – Nov 2014 (indexed at Nov 2007)

0.90

1.00

1.10

1.20

Nov 14Nov 13Nov 12Nov 11Nov 10Nov 09Nov 08Nov 07

EU + UK US


#12 USA: 57 Months of RevPAR Growth

RevPAR Percent Change January 2001 – November 2014

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Hu

nd

red

s 57 months of growth

9/11

SARS Global

Financial crisis

56 months of growth


#11 Europe: 16 Consecutive Growth Months

RevPAR Percent Change January 2001 – November 2014

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Hu

nd

red

s 16 months of growth

9/11

SARS Global

Financial crisis


#10 USA: Pricing Power; EU Opportunity

12MMA ADR; Nov 2007 – Nov 2014 (indexed at Nov 2007)

0.80

0.90

1.00

1.10

1.20


EU + UK (EUR) US (USD)


#9 RevPAR: 3 of 4 Back to Peak

12MMA ADR; Nov 2007 – Nov 2014 (indexed at Nov 2007)

0.60

0.70

0.80

0.90

1.00

1.10

1.20


Europe Eastern Europe Northern Europe Southern Europe Western Europe


#8 RevPAR: +>5% in 11/22 Capitals

Nov 2014 YTD % Change Demand and RevPAR, Lux & UpperUp

-38% -28% -18% -8% 2% 12% 22% 32%

AthensBucharest

Greater MadridLisbon

SofiaGreater Amsterdam

Greater BerlinBrussels

BudapestPrague

RomeGreater London

HelsinkiDublin

ParisMonacoWarsawVienna

BratislavaMoscow

Kiev

Hundreds

Demand Nov YTD RevPAR Nov YTD LC


#7 Dominators: Paris, Monaco, London

November 2014 YTD RevPAR levels (EUR), Luxury & Upper Upscale

€0 €50 €100 €150 €200 €250 €300 €350

ParisMonaco

Greater LondonGreater Amsterdam

RomeGreater Madrid

DublinVienna

Greater BerlinMoscowAthens

BrusselsPrague

HelsinkiLisbon

BudapestBucharest

WarsawBratislava

SofiaKiev


#6 What a Difference 12 Months Makes 12MMA ADR & Occupancy Dec 2013 – Nov 2014

£137

£138

£139

£140

£141

82% 83%

£59

£60

£61

£62

£63

£64

72% 73% 74% 75% 76%

London Regional UK Growth

Recovery


#5 Regional UK: Recovery!

2.9% London

7.4% Aberdeen

4.4% Belfast

10.2% Manchester

14.2% Cardiff

6.3% Edinburgh

10.0% Birmingham

24.3% Glasgow

12.1% Liverpool

10.8% Southampton November 2014 YTD, RevPAR %

7.6% Total UK

10.4% Regional UK

2.9% London


#4 London: Keeps Pace with Inflation

Actual and Inflation Adjusted ADR, 2000 – 2015F

£120 £114 £124 £134 £140 £137 £141 £147

£120 £123

£127

£132

£136

£140 £142

£144

£80

£90

£100

£110

£120

£130

£140

£150

£160

Nominal ADR

ADR 2008 grown by CPI


#3 Regional UK: Room Rate on the Rise

Actual and Inflation Adjusted ADR, 2000 – 2015F

£64 £60 £59 £59 £59 £60 £64 £65

£64 £66

£68

£71

£73 £75

£76 £77

£40

£50

£60

£70

£80

£90

Nominal ADR

£12

ADR 2008 grown by CPI


#2 Changing Face of Regional UK

Accumulated room count growth by class; YE 2004 – November 2014

2.8% CAGR

2.0% CAGR

1.1% CAGR

0.9% CAGR

1.1% CAGR

1.6% CAGR

0% 5% 10% 15% 20% 25% 30%

Economy Class (120K)

Upper Midscale Class (90K)

Upscale Class (79K)

Upper Upscale Class (59K)

Midscale Class (48K)

Luxury Class (12K)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


#1 Regional UK: New Normal

Under contract room pipeline by class until 2017

CAGR +2.3%

CAGR +2.4%

CAGR +2.3%

CAGR +1.3%

CAGR +0.7%

CAGR +1.5%

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Economy Class (120K)

Upper Midscale Class (90K)

Upscale Class (79K)

Upper Upscale Class (59K)

Midscale Class (48K)

Luxury Class (12K)


2015 Resolutions


Forecast – 23/27 RevPAR Growth Expected Occupancy & ADR % Change 2015, Nov 2014 Edition

AMS

ATH

BAR

BER

BRU BUD

COL

DBL

DUS

FRA

HAM

MAD

MIL

MOS

MUC

PAR

PRA

ROM STU

VIE

WAR

ZUR LON

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

-4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%

AD

R %

Ch

ang

e

Occupancy % Change


Forecast – 15 of 16 Markets Set to Rise Occupancy & ADR % Change 2015, Nov 2014 Edition

BIR EDI

GAT

GLA

HEA LEE

MAN

LON

LON LC

LON UUC

LON UC

LON UMC

LON MEC

RUK

RUK UUC

RUK UMC RUK MEC

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

-2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0%

AD

R %

Ch

ang

e

Occupancy % Change


Happy New Year! www.strglobal.com You can follow us on Twitter, Facebook, LinkedIn

STR Global, Ltd is the exclusive owner of all rights in this presentation and its content. Reproduction of all or a portion of this presentation for any purpose without prior approval of STR Global is strictly prohibited. This presentation is based on information compiled by STR Global Ltd. No strategic or marketing recommendations or advice are intended or implied.

http://www.strglobal.com/








TRANSACTION TRENDS AND

OUTLOOK FOR 2015

Philip Camble

Director, Whitebridge Hospitality


2014

3. Germany

(Meininger Hotels, £315m)

TRANSACTION TRENDS – MOST ACTIVE MARKETS

2012

1. France

2. Russia

3. Regional UK

2013

1. Regional UK

2. London

3. France

2. France (Groupe du Louvre, £953m)

1. Regional UK (144x Travelodge hotels, £520m)


TRANSACTION TRENDS – BIGGEST SINGLE ASSET DEAL

Marriott Champs-Elysèes

192 keys

£276m

£1.4m per key


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Europe UK NAM Middle East Asia LAC Africa

TRANSACTION TRENDS – INVESTOR NATIONALITY


TRANSACTION TRENDS – INVESTOR TYPE

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Private Equity High Net Worth Property Co

Institution Hotel Co Sov Wealth

REIT


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Self-operate Man con Lease

TRANSACTION TRENDS – OPERATING STRUCTURE


-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2008 2009 2010 2011 2012 2013 2014

Distressed Not Distressed

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012 2013 2014

Distressed Not Distressed

TRANSACTION TRENDS – DISTRESSED SALES, UK


-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

2008 2009 2010 2011 2012 2013 2014

UK London Ireland W Eur E Eur MEA

TRANSACTION TRENDS – DISTRESSED SALES, EMEA


2014 – A YEAR OF UPS AND DOWNS

1. Regional UK – up 10.4%

2. Russia in Ukraine

3. Europe first to land on a comet

4. The rise of IS in Syria and Iraq


REVIEW OF 2014 FORECASTS


REVIEW OF 2014 FORECASTS London RevPAR Will Grow by 5% or More

Why?

+ UK economy

+ Farnborough

+ Low levels of new supply

+ Olympic hangover over

+ Chinese visas

+ City as Forex centre for renminbi

+ City as a centre of Islamic finance

+ Ramadan moving into June

- Strengthening of Sterling

1.9% (IMF)


100

102

104

106

108

110

112

114

116

118

120

2013 2014

London RevPAR (GBP)


2.9%


REVIEW OF 2014 FORECASTS Scotland RevPAR Will Grow by no More Than 5%

Why?

June 700-year anniversary of Battle of Bannockburn

July Commonwealth Games in Glasgow

August Even larger Edinburgh Festival

September Scotland votes on independence


50

52

54

56

58

60

62

64

2013 2014

Scotland RevPAR (GBP)


11.5%



60

65

70

75

80

85

90

Jun Jul Aug Sep

Scotland RevPAR (GBP)

2013

2014

5.7%

17.4%

8.7%

17.9%


REVIEW OF 2014 FORECASTS Hotel Company IPO


REVIEW OF 2014 FORECASTS Heathrow T2 will Open and Brandenburg Airport Will Not

£2.5bn

20m pax

Opening due 2012

€4.3bn

27m pax

Opening due 2010


REVIEW OF 2014 FORECASTS Heathrow T2 will Open and Brandenburg Airport Will Not


REVIEW OF 2014 FORECASTS Speedy Construction Applied in EMEA


REVIEW OF 2014 FORECASTS Ryugyong Hotel Opens



?



****ing


REVIEW OF 2014 FORECASTS The Sports Accumulator

Wimbledon

Tour de France

Champions League

World Cup

Ryder Cup

4 out of 5 =


REVIEW OF 2014 FORECASTS The Sports Accumulator

Champions League Bayern Munich Real Madrid ✗

Wimbledon Andy Murray Novak Djokovic ✗ Tour de France Chris Froome Vincenzo Nibali ✗

World Cup Spain Germany ✗ Ryder Cup Europe Europe

Event Forecast Winner


PHIL’S FORECASTS FOR 2015


PHIL’S FORECASTS FOR 2015 London RevPAR Will Grow by More Than 2%


“Jamais Deux Sans Trois”



PHIL’S FORECASTS FOR 2015 A Third “Killer” Building In London

?


PHIL’S FORECASTS FOR 2015 Aberdeen RevPAR Will Decline

Source: Nasdaq

50

55

60

65

70

75

80

2011 2012 2013 2014

Aberdeen RevPAR (GBP)


PHIL’S FORECASTS FOR 2015 Aberdeen RevPAR Will Decline



iHotels



G-hotels



G-spot Hotels


PHIL’S FORECASTS FOR 2015 Orient Express Hotels Brand Will be in Use Again


PHIL’S FORECASTS FOR 2015 Branded Budget Hotel Yield At or Under 4%


PHIL’S FORECASTS FOR 2015 Drone Will be Used by Our Industry in Some Form


PHIL’S FORECASTS FOR 2015 Baby or Sport?

v


PHIL’S FORECASTS FOR 2015 France to Finish RWC Higher Than England


Thank You

Philip Camble

Director, Whitebridge Hospitality Ltd


CLOSING REMARKS

Andrew Hepner

Partner, Mayer Brown

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