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Canadian Hotel Industry Performance

Jan D. Freitag

Senior Vice President

@jan_freitag jan@str.com

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Agenda • Total Canada Review

• Classes

• Segmentation

• Regions / Markets

• Pipeline

• Halifax

• AirBnB

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The Center of the Hotel Industry Benchmarking Universe:

Hendersonville, TN

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• The recognized leader in hotel benchmarking

• Founded 1985

• 100% Market Penetration

• Impartial, timely, confidential

STR - who

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Supply (rooms available)

Demand (rooms sold)

Revenue (rooms revenue)

OCC ADR RevPAR

STR - what

• Percent Change • By Geography and Comp Set

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www.hotelnewsnow.com Click on “Data Presentations”

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Total Canada Review

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YTD October 2015: Healthy Room Rate Growth

% Change 7.4k hotels / 434k rooms • Room Supply 130mm 1.0% • Room Demand 87mm 0.6% • Occupancy 66.5% -0.5% • A.D.R. ($Can) $145 4.8% • RevPAR $96 4.5% • Room Revenue $12.6bn 5.3%

October 2015 YTD, Total CAN Results

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Demand Growth Rates Slow. Supply An Issue Now?

-5.8 -6.9

-8

-6

-4

-2

0

2

4

6

2002 2004 2006 2008 2010 2012 2014

Supply % Change

Demand % Change

Total Canada., Supply & Demand % Change, 12 MMA 1/2002 – 10/2015

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ADR Growth Taking Off. Occupancy Growth Easing.

-3.4

-5.1

4.5

-8

-6

-4

-2

0

2

4

6

2002 2004 2006 2008 2010 2012 2014

Occ % Change ADR % Change

Total Canada., ADR & OCC % Change, 12 MMA 1/2002 – 10/2015

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RevPAR Growth: Smooth Sailing For The Next 18 Months (?)

-9.5 -12.4

-14 -12 -10 -8 -6 -4 -2 0 2 4 6 8

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2002 2004 2006 2008 2010 2012 2014

Total Canada., RevPAR % Change, 12MMA, 1/2002 – 10/2015

62 Months 55 Months

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RevPAR Growth: What’s In Store For PM Trudeau?

-14 -12 -10 -8 -6 -4 -2 0 2 4 6 8

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2002 2004 2006 2008 2010 2012 2014

Total Canada., RevPAR % Change, 12MMA, 1/2002 – 10/2015

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Where are we in the lodging cycle?

The 2nd Half

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Class Review

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Luxury Upper Upscale Upscale

Four Seasons Hilton Courtyard

Ritz Carlton Marriott Hyatt Place

Fairmont Delta Crown Plaza

St. Regis Gaylord Four Points

Upper Midscale Midscale

Hampton Inn Best Western

Comfort Suites Ramada

Fairfield In Red Lion

Holiday Inn La Quinta

Select Brands by STR Class

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Strong Demand Growth (ex. Midscale). Upscale Supply Increases

0.0

1.7

3.0 2.5

-0.3

0.7

2.7

3.7

1.9

-2.9

Luxury Upper Upscale Upscale Upper Midscale Midscale

Supply % Change Demand % Change

*Supply / Demand % Change, by Class, October 2015 YTD

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Class RevPAR Composition: ADR Driven

0.7 1.0 0.6 -0.5

-2.7

8.7

5.8

4.1 3.3

0.9

Luxury Upper Upscale Upscale Upper Midscale Midscale

ADR % Change Occupancy % Change

*RevPAR % Change by Contribution of OCC / ADR % Change, by Class, October 2015 YTD

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Classes: Absolute OCC Very Healthy On The Upper End

69.8

72.8 71.5

67.1

61.8

69.3

72.1 71.1

67.4

63.5

Luxury Upper Upscale Upscale Upper Midscale Midscale

2015 2014

*OCC %, by Class, October YTD 2015 & 2014

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Classes: Absolut ADR Increases Sharply At Upper End

$263

$178

$142

$123 $113

$242

$168

$136 $119

$112

Luxury Upper Upscale Upscale Upper Midscale Midscale

2015 2014

*ADR $CAN by Class, October YTD 2015 & 2014

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Luxury / Upper Upscale Segmentation

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YTD September 2015: High End Performs Very Well

% Change 385 hotels / 74k rooms • Room Supply 1.2% • Room Demand 2.0% • Occupancy 71.7% 0.8% • A.D.R. ($Can) $201 6.7% • RevPAR $144 7.5%

Canada Luxury & Upper Upscale Class, September 2015 YTD

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The Time For Transient ADR Growth Is Now

-1%

0%

1%

2%

3%

4%

5%

6%

7%

Feb 12 Feb 13 Feb 14 Feb-15

Demand % Change

ADR % Change

*Transient Demand and ADR CAN$, % Change, 12 MMA, 1/2012 – 09/2015

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Group Demand Growth Slows As Hotels Are Full

-4%

-2%

0%

2%

4%

6%

2012 2013 2014 2015

Demand % Change

ADR % Change

*Group Demand and ADR CAN$, % Change, 12 MMA, 1/2012 – 09/2015

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Regions / Markets

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Provinces With Varied Performance Province Occupancy ADR $CAN RevPAR %

Change Alberta 62.1 152.37 -8.5

British Columbia 69.8 160.21 14.6 Manitoba 64.5 118.33 3.9

New Brunswick 58.8 116.55 3.9 Newfoundland and Labrador 68.1 149.79 -6.1

Nova Scotia 66.2 127.29 4.7 Ontario 68.1 138.22 7.8

Prince Edward Island 59.6 135.79 6.0

Quebec 69.3 151.16 6.7 Saskatchewan 60.2 131.34 -8.8 Yukon Territory 71.3 122.47 8.8

* October 2015 YTD Occ%, ADR $, RevPAR % Change, by Province

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RevPAR by Province: All Even (Except PE Island)

-10

-5

0

5

10

15

20

25

2012 2013 2014 2015

New Brusnwick NFL / Labrador

PE Island Nova Scotia

*Group Demand and ADR CAN$, % Change, 12 MMA, 1/2012 – 09/2015

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September 2015 YTD: High Occupancy = Pricing Power

Market OCC % ADR % Change RevPAR $CAN Montreal 72.3 155.36 8.1 Ottawa 74.5 151.22 9.6 Toronto 73.8 155.54 7.5

Vancouver 77.3 168.43 18.8

Halifax, NS 68.4 131.53 5.0

* October 2015 YTD Occ%, ADR $, RevPAR % Change in Major Metros

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FX Impact: Canada Is A Deal

24.4%

7.0% 7.0%

-7.9% Boston Toronto

$CAN USD

* ADR % Change, NYC & Toronto, in local currency, October 2015 YTD

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Pipeline

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CAN Pipeline: Construction Today Will Impact 2016 / 2017

Phase 2015 2014 % Change

In Construction 9.3 9.1 0.4%

Final Planning 5 4.8 3.3%

Planning 8 10.1 -19.4%

Under Contract 22 24 -7.3%

*Total CAN Pipeline, by Phase, ‘000s Rooms, October 2015 and 2014

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Limited Service Construction Has Been Strong For 2 Years

0.7

1.2

2.8

3.6

0.1

0.9

Luxury Upper Upscale

Upscale Upper Midscale

Midscale Economy Unaffiliated

*CAN Pipeline, Rooms Under Construction , ‘000s Rooms, by Scale, October 2015

69%

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Halifax, NS Area Performance

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Halifax: Not Much Pricing Power

% Change 49 hotels / 5.8k rooms • Room Supply 2.5% • Room Demand 4.7% • Occupancy 68.4% 2.2% • A.D.R. ($Can) $131 2.8% • RevPAR $90 5.0%

Halifax KPIs, October 2015 YTD

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Halifax Rooms Sold: 2015 A Banner Year

70,000

90,000

110,000

130,000

150,000

January March May July September November

2009 2014 2015

*Halifax Demand, by Month, 2009, 2014, 2015

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Halifax Occupancy: August hit 87%

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45

55

65

75

85

95

January March May July September November

2009 2014 2015

*Halifax Occupancy %, by Month, 2009, 2014, 2015

%

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Halifax ADR: Good Increases

100

110

120

130

140

150

January March May July September November

2009 2014 2015

*Halifax ADR (CAN$), by Month, 2009, 2014, 2015

$

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Halifax ADR in US$: Halifax Is A Bargain For US Travelers

80

90

100

110

120

130

140

150

January March May July September November

2009 2014 2015

*Halifax ADR (US$), by Month, 2009, 2014, 2015

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Halifax Pipeline

Project Name Address City Room Count

Hilton Garden Inn Halifax City Center Hollis St & Sackville St Halifax 130

Unnamed Hotel 1721 Lower Water

Street Halifax 250

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Airbnb

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42 https://www.airbnb.com/business-travel-ready

Targeting Business Travelers with Listings and…

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….A (de Facto) Frequent Stay Program

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Certification in Hotel Industry Analytics (CHIA) STR and AHLEI have partnered to launch the Certification in Hotel Industry Analytics for a variety of industry professionals.

• There are four core content areas: o Hotel Industry Foundations o Hotel Math Fundamentals – the metrics used by the hotel

industry o Property Level Benchmarking (STAR Reports) o Hotel Industry Performance Reports

• One or two-day CHIA workshops are available • To find out more please contact CAN at sharecenter@str.com

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