30th European Hotel Investment ConferenceExperience the futureSimon Oaten & Guy Langford | Wednesday 7 November

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Passion for leisure

Both strong economic fundamentals as well as changes in consumer behaviour have led to the rise of a confident leisure consumer

Low inflation

Record high employment

Owning less, sharing more

Seeking enriched lives

Shifting spending from ‘needs’ to ‘wants’

Recovering earnings

Making time for leisure

UK leisure consumer

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-12%

-10%

-8%

-6%

-4%

-2%

0%

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018

Net

% o

f consum

er

spendin

g m

ore

Spending more on leisure Deloitte Consumer Confidence Index

A view on the UK leisure consumer

Despite the uncertainty around the impact of Brexit, the leisure consumer has continued to spend on leisure

Brexit referendum

Source: The Deloitte UK Leisure Consumer

4

Leisure travel demand

Leisure travel demand has held up as consumers have prioritised their holidays compared to other leisure activities. Spending on exercise has also remained stable.

Source: The Deloitte UK Leisure Consumer

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018

Net

% o

f consum

er

spendin

g m

ore

Long holidays Short breaks Eating out Going to the gym or playing sport

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Drivers of UK consumer spending

Will the leisure consumer remain resilient?

CPI Inflation

Unemployment rate

Real disposable income

Household final consumption

expenditure

2016 2018 Forecast

Source: ONS; HM Treasury Forecast report; Trading Economics; Bank of England Inflation Report

+0.6%

Q2 2016

+0.4%

Q2 2018

Growth: 2019

+1.6%

Q2 2018

+0.2%

Q2 2016

+0.9%

2.4%

Sep 2018

2020

+1.2%

Q2 2016

4.9%

1.0%

Sep 2016

Q2 2018

4.0%

2.0%

Q4 2020*

4.4%

Q4 2019

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The majority of the European economies show a trend towards falling consumer confidence while leisure travel spending so far has remained resilient

Consumer confidence and leisure travel spending (inbound and domestic)

Leisure travel spending, % change in 2018 over 2017; total spending

Positive consumer confidence Q3’18 vs. Q3’17

Fall in consumer confidence Q3’18 vs. Q3’17

Source: Trading Economics, Factiva, (conversion rate pound to euro 1 GBP = 1.13 EUR)

+3.1% €108.1bn

Spain

+2.2% €129.0bn

France

+2.3% €275.5bn

Germany

+1.4% €138.3bn

Italy

+17% €146bn

UK

+3.2% €24.6bn

Netherlands

Overall confidence in Euro Area

Leisure travel spending, % change in 2018 over last 5 years; total spending

OSJ(-L2TA(-L11

Slide 6

OSJ(-L2 Is UK really 17%. what is the driver or breakdown of this. In the narrative I would like to explore some detail of this.Oaten, Simon J (UK - London), 04/11/2018

TA(-L11 A response is also incorporated into the notes - Due to availability of data the figure for UK is increased over the last five years

(hence blue bubble). Also the increase is likely to be impacted by the fact it is both inbound and domestic spending) - UK ranks

third after US and Spain in terms of countries generating the most revenue out of tourism and this has gone up in the last few

years as tourism has continued to rise and spend per visit has also been lifted as higher spending groups such as CHinese or

the Americans have come here on their holidays.Tan, Aino (UK - London), 05/11/2018

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Financial optimism among European CFOs

Overall business confidence has been more jittery in the post-referendum period

Source: Deloitte European CFO survey, spring 2018.

Note: The ‘GDP‘ data is weighted based on the GDP contribution of the respondents’ country of residence

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A view on the European hospitality markets

Our delegate survey suggests the UK is already at the top of the investment cycle, while Spain, France and Greece are the markets on the upturn

Downturn

Trough

Peak

Upturn

Source: 2018 EHIC Delegate survey

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REAL-TIME PERSONALISATION?

Levers can hote l iers pu l l in

the age of

How can the hospitality sector keep the leisure (and business) consumer engaged?

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BIG TECH a l ready

knows what your

GUEST DID NEXTSUMMER…

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Master the Digital…

Hotels guest are leaving digital footprints everywhere

Comb ine i n s i gh t s f r om gue s t s ’ DIGITAL FOOTPRINTS andC RM DATA…

…to de l i ve r INTELLIGENT & PERSONALISED

engagemen t i n REAL TIME a t e ve r y s t ep

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…and the Physical

Digital loses power when the physical loses relevance

13

Do Well in Wellbeing…

Wellness and wellbeing have gone from fad to fundamental

Wellbeing Inspired Trips Wellbeing Inspired Amenities- vs -

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Go Private (Accommodations)

Blending the best of both worlds to curate authentic experiences

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