A Look Ahead: 2011eoplugin.commpartners.com/HSMAI/101207/101207_Slides.pdf · 2010-12-07 · HSMAI...

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Tuesday, December 7, 2010Tuesday, December 7, 2010

2:00 2:00 –– 3:00 PM EST3:00 PM EST

Hospitality Sales and Marketing Association International (HSMAI)

A Look Ahead: 2011A Look Ahead: 2011

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Overview of Format and TopicOverview of Format and Topic

Webinar ModeratorFran Brasseux

Executive Vice President, HSMAI

POLL QUESTION #1POLL QUESTION #1How many people are participating in

this webinar at your location today?

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Jan D. FreitagVice President, Global DevelopmentSMITH TRAVEL [email protected]

Robert MandelbaumDirector of Research Information Services

Colliers PKF Hospitality [email protected]

www.pkfc.com

TodayToday’’s Presenterss Presenters

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HSMAI WebinarA Look Ahead: 2011

Jan D. [email protected]

Vice President

Agenda

• US Hotel Trends• Chain Scale Trends• Segmentation Trends• Exchange Rate Impact• US Forecast

www.hotelnewsnow.comClick on “Industry Presentations”

US Hotel Trends

Is the worst over? Yes

What will you need to do to stay ahead? Data

What are the risks in the outlook? ADR

What have we learned from these past two years? ???

A Look Ahead: 2011

Total US - Key StatisticsYTD Through October 2010

% Change• Hotels 52k• Room Supply 1.4 bn 2.1%• Room Demand 867 m 7.6%• Occupancy 59.2% 5.4%• A.D.R. $98 -0.5%• RevPAR $58 4.9%• Room Revenue $85 bn 7.1%

Occupancy Increases Strongly Since March

*US Monthly OCC % Change, Jan 2007 - YTD Oct 2010

*US Monthly ADR % Change, Jan 2007 - YTD Oct 2010

ADR Recovers Very Slowly (Between +1% and +2%)

*US Monthly OCC % Change, Jan 2007 - YTD Oct 2010

RevPAR Recovery is OCC Driven

Chain Scale Trends

YTD: Chain Scale ADR Growth Lacking

*US Chain Scales, ADR & OCC % Change, YTD Oct 2010

October: Some Pricing Power Visible

*US Chain Scales, ADR & OCC % Change, Oct 2010

SegmentationTrends

YTD: Stronger Group Demand Rebound

*US Group & Transient, ADR & OCC % Change, YTD Oct 2010

October: ADRs Show Signs of Life (?)

*US Group & Transient, ADR & OCC % Change, Oct 2010

Exchange Rate Impact

Markets US $ Euro €

Berlin 2.8 8.5

Dubai -7.1 -4.6

London 7.7 13.6

Los Angeles 1.2 6.1

New York 7.4 13.5

Paris 1.5 7.0

Rome -6.7 -0.9

Toronto 14.3 20.9

FX Impact Makes Europe More Affordable (& US More $ $$)

*Selected Markets, ADR % Change in USD and Euro, YTD Oct 2010

US Forecast

Total US Active Development Pipeline (‘000 Rooms)Change From Last Year

PhaseOctober

2010October

2009 % Change

In Construction 56 112 - 50%

Final Planning 56 70 - 20%

Planning 228 253 - 10%

Active Pipeline 341 435 -22%

Source: STR/McGraw-Hill Construction Dodge Pipeline 2010 Smith Travel Research, Inc.

Total United StatesKey Performance Indicator Outlook Scenario (% chang e vs. Prior Year)2010F

Hotel Industry Performance Scenarios

2010Low

GrowthForecast High

Growth

Supply 2.4 2.2 2.1

Demand 6.2 6.6 7.3

Occupancy 3.8 4.4 5.2

ADR -0.5 -0.1 0.4

RevPAR 3.3 4.3 5.6

Total United StatesChain Scale Key Performance Indicator Outlook

2010F by Chain Scale

2010 Year End Outlook

Chain Scale

Occupancy

(% chg)

ADR

(% chg)RevPAR (%chg)

Luxury 8.1 1.3 9.4

Upper Upscale 6.7 0.2 7.3

Upscale 6.3 0.5 6.8

Midscale w/ F&B 3.0 -0.3 2.7

Midscale w/o F&B 4.4 0.0 4.4

Economy 3.4 -3.2 0.2

Independent 4.0 0.8 4.9

Total United States 4.4 -0.1 4.3

-10% to -5% -5% to 0% 0% to 5% 5% to 10% 10% to 15% 15% to 20%

Houston Dallas Anaheim-Santa Ana Boston

Nashville Atlanta Denver

Norfolk-Virginia Beach Chicago New Orleans

Oahu Island Detroit New York

Orlando Los Angeles-Long Beach

Philadelphia Miami-Hialeah

Phoenix Minneapolis-St Paul

San Diego San Francisco-San Mateo

St Louis Seattle

Tampa-St Petersburg

Washington, DC

2010 Year End RevPAR Forecast(as of September 2010 reports)

2011: The Year of The Hotel “Flasher”

Total United StatesKey Performance Indicator Outlook Scenario (% chang e vs. Prior Year)2011F

Hotel Industry Performance Scenarios

2011Low

GrowthForecast High

Growth

Supply 1.3 1.1 0.8

Demand 2.1 2.5 3.0

Occupancy 0.8 1.4 2.2

ADR 3.4 3.9 4.4

RevPAR 4.2 5.3 6.6

Total United StatesChain Scale Key Performance Indicator Outlook

2011F by Chain Scale

2011 Year End Outlook

Chain Scale

Occupancy

(% chg)

ADR

(% chg)RevPAR (%chg)

Luxury 0.4 6.7 7.1

Upper Upscale 1.6 5.4 7.0

Upscale 2.1 4.4 6.5

Midscale w/ F&B -1.0 2.5 1.5

Midscale w/o F&B 1.8 4.0 5.8

Economy 1.3 2.3 3.6

Independent 2.4 3.7 6.1

Total United States 1.4 3.9 5.3

2011 Year End RevPAR Forecast(as of September 2010 reports)

-10% to -5% -5% to 0% 0% to 5% 5% to 10% 10% to 15% 15% to 20%

Miami-Hialeah Boston Anaheim-Santa Ana Orlando

Denver Atlanta Phoenix

Los Angeles-Long Beach Chicago

Nashville Dallas

Oahu Island Detroit

San Diego Houston

San Francisco-San Mateo Minneapolis-St Paul

Washington DC New Orleans

New York

Norfolk-Virginia Beach

Philadelphia

Seattle

St Louis

Tampa-St Petersburg

www.hotelnewsnow.comClick on “Industry Presentations”

Accelerating success.

December 7, 2010December 7, 2010

U.S. Lodging Industry UpdateU.S. Lodging Industry Update

Robert MandelbaumColliers PKF Hospitality Research

A Look Ahead: 2011

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Occupancy, ADR, RevPAR Forecast: 2010 - 2012

� Economic Drivers

� National Forecast

� Chain Scales

� Metro Areas

Unit-Level Operating Performance

� Revenues, Expenses, Profits

Special Analyses

� Marketing Department Expenditures

� Attrition and Cancelation Revenue

� Meeting Planner Survey

Occupancy, ADR, RevPAR Forecast: 2010 Occupancy, ADR, RevPAR Forecast: 2010 -- 20122012

�� Economic DriversEconomic Drivers

�� National ForecastNational Forecast

�� Chain ScalesChain Scales

�� Metro AreasMetro Areas

UnitUnit--Level Operating PerformanceLevel Operating Performance

�� Revenues, Expenses, ProfitsRevenues, Expenses, Profits

Special AnalysesSpecial Analyses

�� Marketing Department ExpendituresMarketing Department Expenditures

�� Attrition and Cancelation RevenueAttrition and Cancelation Revenue

�� Meeting Planner SurveyMeeting Planner Survey

Agenda

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Forecasts Come fromForecasts Come fromHotel HorizonsHotel Horizons ®®

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The Economy

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Economic Assumptions Driving Our Forecasts:

Payroll

Employment

Real Personal

IncomeReal GDP CPI (Inflation)

2009 -4.3% -4.3% -1.9% -2.0% -2.6% -2.4% -0.3% -0.3%

2010 -0.5% -0.7% 0.8% 0.6% 2.7% 2.3% 1.6% 1.5%

2011 1.0% 0.1% 2.6% 2.4% 3.0% 1.4% 1.5% 0.8%

2012 2.5% 1.9% 4.8% 3.6% 5.0% 3.8% 2.5% 2.8%

2013 3.3% 3.2% 4.7% 3.8% 4.3% 4.5% 2.9% 3.1%

L.R.A. 1.2% 2.7% 2.7% 2.9%

Source: Moody’s Analytics, October 2010 L.R.A. = Long Run Average

(July 2010)

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Lodging Forecast

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Long Term Average 2006 2007 2008 2009 2010F 2011F 2012F

Supply 2.2% 0.2% 1.3% 2.5% 3.0% 2.0% 1.0% 0.7%

Demand 1.5% 0.5% 0.7% -2.4% -6.1% 7.8%7.8% 3.3%3.3% 4.8%4.8%

Occupancy 62.2% 63.1% 62.8% 59.8% 54.6% 57.6% 58.9% 61.3%

ADR 2.9% 7.6% 6.4% 2.9% -8.6% -0.1% 3.9% 6.0%

RevPAR 2.3% 7.9% 5.9% --2.0%2.0% --16.7%16.7% 5.6%5.6% 6.2%6.2% 10.4%10.4%

National Horizon- Forecasts through 2012

Record DeclineRecord Decline

Record IncreaseRecord Increase

Source: Colliers PKF Hospitality Research – December 2010 Hotel Horizons® Report, Smith Travel Research

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2011 RevPAR ForecastBy Chain-Scale

Source: Colliers PKF Hospitality Research, December 2010 Hotel Horizons® reports.

4.6%

5.5%

3.0%

4.6%

8.1%

9.8%

0% 4% 8% 12%

Economy

Midscale without F&B

Midscale with F&B

Upscale

Upper-Upscale

Luxury

Forecast Change 2010 to 2011

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U.S. Hotel MarketsGreatest and Least Change in RevPAR

-1.5%

0.1%

0.8%

1.5%

1.5%

6.2%

9.1%

9.4%

9.4%

9.6%

9.7%

-4% 0% 4% 8% 12%

New Orleans

Phoenix

Washington DC

Pittsburgh

San Antonio

National Average

Oakland

Minneapolis

Jacksonville

Seattle

Salt LakeCity

Source: Colliers PKF Hospitality Research, December 2010 Hotel Horizons® reports.

Forecast Change 2010 to 2011

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Unit-Level Operations

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7.7%

-9.9%

-4.0%

7.6%8.8% 8.2%

-18.5%

6.0%

8.7%

2.2%

-1.8%

5.5%

-1.3%

5.3%6.6%

-5.4%

-1.7%

6.4% 6.5% 6.2%4.8%

-0.3%

-11.8%

5.2% 4.5%6.2%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F 2011F 2012F

Revenues Expenses C.P.I.

Historically Revenue GrowthOutpaces Expense* Growth

Note: * Before deductions for capital reserve, rent, interest, income taxes, depreciation, and amortization.

Source: Colliers PKF Hospitality Research, Trends® in the Hotel Industry sample, Moody’s Analytics

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Impact Of RevPAR MixOn Hotel Profits*

2.0%

16.2%

19.5%

22.5%

13.5%

3.0%

0% 10% 20% 30%

Occupancy Increase, ADRDecline

Occupancy 87%, ADR 23%




Occupancy Decline, ADRIncrease

Occ

upan

cy a

nd A

DR

Cha

nge

as a

Per

cent

of

Rev

PA

R C

hang

e

Change in NOI*

Note: * Before deduction for capital reserve, rent, interest, income taxes, depreciation, and amortization.

Source: Colliers PKF Hospitality Research, 2003 - 2004 Trends® in the Hotel Industry database.

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-60%

-40%

-20%

0%

20%

40%

60%

80%

1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012F

+64.6% - 1943

-22.4% - 1938

-19.4% - 2001

-34.9% - 2009

+11.1% - 2011F+16.7% - 2012F

Note: * Before deductions for capital reserve, rent, interest, income taxes, depreciation, and amortization.

Source: Colliers PKF Hospitality Research, Trends® in the Hotel Industry sample.

Annual ChangeUnit-Level NOI*

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Trends In Hotel Marketing Department Expenditures

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Distribution Of 2009Unit-Level Hotel Marketing Expenses*

Advertising3.5%

Selling20.2%

Labor Costs76.3%

Note: Exclusive of franchise fees and assessmentsSource: Colliers PKF Hospitality Research, Sample of properties that reported marketing

department payroll

$2,761 PAR - 4.6% of Total Revenue

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Change In Unit-Level MarketingDepartment Expenditures*

9.2%

-11.2%

-0.3%

1.2%0.0%

1.9%

6.1% 7.0% 7.8%

-12.6%

-9.9%

5.4%3.7% 4.2%4.3%

2.3%4.3%5.2%

2.9%2.6%

-16%-12%-8%-4%0%4%8%

12%16%

Total Marketing DepartmentExpenditures*

Marketing Department Labor Costs

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Note: Exclusive of franchise fees and assessmentsSource: Colliers PKF Hospitality Research, Sample of properties that reported marketing

department payroll

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Attrition and Cancellation Revenue

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Attrition and Cancellation IncomeCompared to Rooms Revenue

4.1%

-34.1%

12.0%

-15.0%

-19.5% -19.7% -19.2% -20.2%

-6.0%

15.3%

-16.5%-20.9%

-40%

-30%

-20%

-10%

0%

10%

20%

All Hotels ConferenceCenters

ConventionHotels

Full-ServiceHotels

ResortHotels

All SuiteHotels

Change in Attrition and Cancellation Income Change in Rooms Revenue

Source: Colliers PKF Hospitality Research

Change From 2008 to 2009

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Attrition and Cancellation Income

1.3%

2.4%

1.2%

0.9%

2.1%

0.4%0.4%

0.9%1.0%

1.5%

0.8%

2.9%

0%

1%

2%

3%

4%


ConventionHotels

Full-ServiceHotels

Resort Hotels All SuiteHotels

2009 2008


Percent of Total Revenue

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Attrition and Cancellation Income

6.3%5.3%

4.8%

10.5%

1.3%1.2%

14.5%

5.8%

3.0%3.8% 3.1%

13.1%

0%

4%

8%

12%

16%


ConventionHotels

Full-ServiceHotels

ResortHotels

All SuiteHotels

2009 2008Note: * Before deductions for capital reserve, rent, interest, income taxes, depreciation, and amortization.


Percent of Net Operating Income*

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2010 Meeting Planners SurveyConventionSouth Magazine

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Where Meeting PlannersAre Being Asked To Cut Costs

4.0%

12.0%

13.0%

20.0%

24.0%

24.0%

27.0%

28.0%

30.0%

34.0%

53.0%

0% 10% 20% 30% 40% 50% 60%

Other

Programming

Transportation

Incentives/Rewards/VIP Services

Length of Meeting

Meeting Rooms

Guest Rooms/Housing

Audio/Visual

None

Off-Site Events

Food & Beverage

Note: * Multiple sources allowed.

Source: ConventionSouth, Colliers PKF Hospitality Research

Percent of Meeting Planners

# 5

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Items Hoteliers Are Willing To Concede

16.0%

17.0%

29.0%

42.0%

57.0%

71.0%

0% 20% 40% 60% 80%

Cancellation Fees

Service Fees

Food and Beverage

Attrition Fees

Meeting Space

Room Rates

Note*: Multiple responses allowed.

Source: ConventionSouth, Colliers PKF Hospitality Research

Percent of Meeting Planners*

# 1

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www.pkfc.comwww.pkfc.comwww.hotelhorizons.comwww.hotelhorizons.com

[email protected]@pkfc.com

Thank You

Jan D. FreitagVice President, Global DevelopmentSMITH TRAVEL [email protected]

Robert MandelbaumDirector of Research Information Services

Colliers PKF Hospitality [email protected]

www.pkfc.com

Questions?Questions?

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Plan to attend the travel-marketing event of the year, the

2010 HSMAI Adrian Awards Gala!Monday, January 31, 2011

New York Marriott Marquis, New York City

This black-tie, networking celebration highlights outstanding work

and achievements in travel marketing.

Early Reservation Deadline: Friday, January 14, 2011

www.hsmai.org

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Save the Date – February 1, 2011 -- for the HSMAI Digital Marketing Strategy Conference, following the HSMAI Adrian Awards Gala in New York City.

This unique one-day interactive program will feature thought leaders and subject-matter experts in various components of digital marketing. Hot topics will include measurement and ROI, selecting and working with an agency, mobile and location based marketing, social, digital strategic planning, web analytics, and case studies from HSMAI’s Adrian Awards Digital Marketing award winners.

The event is designed for digital marketing, ecommerce, or distribution management professionals from hotel brands, hotel management companies, hotel ownership groups, destinations, and independent hotels and resorts.

Register Now: www.hsmai.org

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Last webinar of the year:

December 14 – The Role of OTA in Your Distribution Strategy – Session 10 of the Revenue Management Series

To register for this webinar and to watch for 2011 webinars, please go to www.hsmaiuniversity.org.

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A Look Ahead: 2011eoplugin.commpartners.com/HSMAI/101207/101207_Slides.pdf · 2010-12-07 · HSMAI...

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