Hotel InduSTRy Overview Ohio Hotel & Lodging Association Annual Conference

Valerie Woods

Director of Business Development, Hotels

vwoods@str.com

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STR provides monthly, weekly and daily reports to more than worldwide hotels, which represents

rooms.

52,000

7 million

Things to think about today

• Long term overview at industry performance

• Regional look: East North Central States

• Focus on Ohio

• Group versus Transient

• Pipeline: How will current projects affect supply?

• U.S. Forecast: 2015 & 2016

September 2015

RevPAR +8.0%

Occupancy +3.3%

All YTD KPIs Are Still At All-time Highs

YTD September 2015: Healthy Room Rate Growth % Change

• Room Supply 1.0%

• Room Demand 3.0%

• Occupancy 67.3% 2.0%

• A.D.R. $120 4.7%

• RevPAR $81 6.7%

• Room Revenue 7.8%

September 2015 YTD, Total US Results

12 Months Ending September 2015: Overall Still Good Data % Change

• Room Supply* 1.0%

• Room Demand* 3.4%

• Occupancy* 65.4% 2.5%

• A.D.R.* $119 4.6%

• RevPAR* $78 7.2%

• Room Revenue* 8.2%

September 2015 12 MMA, Total US Results, * Record Absolute Values

US Supply/Demand – Great Fundamentals

1.0

-0.8

-4.7

-7.1

7.7

3.4

-8

-4

0

4

8

1990 2000 2010

Supply % Change

Demand % Change

Total U.S., Supply & Demand % Change, 12 MMA Jan 1990 – Sep 2015

ADR Growth Healthy. OCC Growth Will Now Start To Slow

2.5

6.8 7.5

4.6

-10

-5

0

5

1990 2000 2010

OCC % Change

ADR % Change

Total U.S., ADR & OCC % Change, 12 MMA Jan 1990 – Sep 2015

50

60

70

80

90

100

110

120

130

1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Occupancy (%)

ADR ($)Prior Peak: $107.77 Sept ’08

$119.12 Sep ’15

65.4% Sep ’15

Total U.S., Occupancy and ADR, 12 MMA Jan 1997 – Sep 2015

Occupancies Close to Peak

$30

$50

$70

$90

$110

$130

2007 2009 2011 2013 2015

Bill

ion

s

Total U.S.: Rooms Revenue, 12 MMA January 2005 – September 2015

Room Revenue > $140bn

RevPAR Growth: Smooth Sailing For The Next 2 Years

-25

-20

-15

-10

-5

0

5

10

15

1990 2000 2010

Sep +8.0%

Total U.S., RevPAR % Change, Jan 1990 – Sep 2015

56 Months 67Mo. 80 Months 31 Mo

Labor Day Hiccup

Aug+1.8%

• Luxury – Fairmont, Four Seasons, Ritz Carlton, JW Marriott

• Upper Upscale – Hilton, Hyatt, Marriott, Kimpton Hotels

• Upscale – Radisson, Hilton Garden Inn, Residence Inn, Springhill Suites, Homewood Suites, Courtyard, Best Western Premier

• Upper Midscale – Fairfield Inn/Suites, Holiday Inn, Clarion, Hampton Inn/Suites, Best Western PLUS

• Midscale – Best Western, Candlewood Suites, Quality Inn/Suites, Ramada

• Economy – Extended Stay America, Red Roof, Days Inn, Microtel

2015 STR Chain Scales *Full list available at www.str.com/resources/documents

Scales: Strong Demand Growth. Upscale Supply Increases

0.5

1.2

3.9

1.3

-0.1

0.1

1.1

2.0

4.8

3.4

2.4 2.0

Luxury Upper Upscale Upscale UpperMidscale

Midscale Economy

Supply % Change

Demand % Change

*Supply / Demand % Change, by Scale, Sep 2015 YTD

Scales: Absolute OCC Very Healthy On The Upper End

75.9 75.1 75.3

68.0

59.9 58.9

76.4 75.7 76.0

69.5

61.4 60.0

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

2014 2015

*OCC %, by Scale, Sep YTD 2015 & 2014

Scales RevPAR Composition: ADR Driven

0.6 0.7 0.9 2.1 2.5

1.8

4.8 4.4 5.2

4.5 4.5

5.3

5.4 5.4

6.1 6.5

6.8 6.9

Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

ADR % Change

Occupancy % Change

RevPAR % Change

*RevPAR % Change by Contribution of OCC / ADR % Change, by Scale, Sep 2015 YTD

Illinois Indiana Michigan Ohio Wisconsin

East North Central Region States, Occ & Occ % Change, YTD Sept 2015

Ohio 62.6% 1.4%

Wisconsin 59.7% 1.8%

Michigan 61.9% 2.0%

Indiana 62.0% 1.8%

Illinois 67.5% 1.8%

Occupancy YTD

East North Central Region States, ADR & ADR % Change, YTD Sept 2015

Ohio $94 3.9%

Wisconsin $100 5.5%

Michigan $98 5.8%

Indiana $91 5.6%

Illinois $126 6.2%

ADR YTD

East North Central Region States, RevPAR & RevPAR % Change, YTD Sept 2015

Ohio $59 5.4%

Wisconsin $60 7.4%

Michigan $61 7.9%

Indiana $57 7.5%

Illinois $85 8.1%

RevPAR YTD

1423 Properties

128,781 Rooms

Ohio State Key Statistics; Sep 2015

Ohio: At-A-Glance

State YTD Sept 2015: Demand grew more than Supply % Change

• Room Supply 2.3%

• Room Demand 3.7%

• Occupancy 62.6% 1.4%

• ADR $94 3.9%

• RevPAR $59 5.4%

• Room Revenue 7.7%

September 2015 YTD, Ohio State Results

12 Months Ending September 2015: Record Breaking KPIs % Change

• Room Supply* 2.2%

• Room Demand* 4.1%

• Occupancy* 60.6% 1.9%

• ADR* $93 3.8%

• RevPAR* $56 5.7%

• Room Revenue* 8.1%

September 2015 12 MMA, Ohio State Results, * Record Absolute Values

2.1%

3.9%

-11%

-7%

-3%

1%

5%

9%

2007 2008 2009 2010 2011 2012 2013 2014 2015

Supply % Change

Demand % Change

Ohio, Supply & Demand % Change, 12 MMA Jan 2007 – September 2015

Ohio: Positive Supply/Demand Relationship

1.8

3.9

-10

-6

-2

2

6

10

2007 2008 2009 2010 2011 2012 2013 2014 2015

Occ % Chg

ADR % Chg

-11.5%

Ohio, Occ & ADR % Change, 12 MMA Jan 2007 – Sep 2015

Ohio: ADR Currently Outpacing Occupancy

Ohio: Room Nights Sold January 2000 – September 2015

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2000 2002 2004 2006 2008 2010 2012 2014

July: 2,905,002 Most Room Sold Ever!

Ohio, Room nights sold by month, Jan 2000 – Sep 2015

Ohio: Room Counts by Class

Economy, 31%

Midscale, 13%

Upper Midscale, 27%

Upscale, 18%

Upper Upscale, 11%

Luxury, 1%

5.4%

6.7%

1.4%

-0.9%

1.0%

8.6% 8.4%

1.9%

-0.7%

2.3%

Upper Upscale Upscale Upper Midscale Midscale Economy

Supply

Demand

Ohio: Class Segments , Supply & Demand % Change, YTD Sep 2015

Ohio Class Segments: Demand Growth Greatest in Upper Upscale Class

3.0%

1.6%

0.5% 0.3%

1.3%

4.4% 4.1%

3.1% 2.9%

1.9%

Upper Upscale Upscale Upper Midscale Midscale Economy

Occupancy ADR

Ohio: Class Segments , Occ & ADR % Change, YTD Sep2015

Ohio Class Segments: ADR Growth > Occ Growth in All Except Luxury

Ohio Classes: Occupancies Near Peak in Upper Segments

65.5% 69.4%

66.2%

55.2% 54.9%

67.4% 70.5%

66.5%

55.3% 55.6%

Upper Upscale Upscale Upper Midscale Midscale Economy

2014 2015

Ohio OCC %, by Class, Sep YTD 2015 & 2014

RevPAR Growth Highest in Upper Upscale

$87 $78

$65

$42

$30

$94

$83

$68

$43

$30

Upper Upscale Upscale Upper Midscale Midscale Economy

2014

2015

+5.8% +3.1% +3.2%

Ohio: RevPAR $, by Class, Sep YTD 2014 & 2015

+7.5% +3.6%

Ohio Performance by Market

-0.7%

2.6%

0.9% 0.9%

4.3% 5.4%

6.3%

3.9% 5.0%

1.3%

Dayton/Springfield, OH

11,093 rms

Cleveland, OH21,886 rms

Columbus, OH26,597 rms

Cincinnati, OH-KY-IN

27,811 rms

Ohio Area49,707 rms

Supply

Demand

Ohio: Class Segments , Supply & Demand % Change, YTD Sep 2015

Ohio Markets: Demand Growth Outpacing Supply

Ohio markets, Occ & Occ % Change, YTD Sep 2015

58.5%

63.0%

65.3%

65.3%

66.7%

Ohio Area

Dayton/Springfield, OH

Cleveland, OH

Cincinnati, OH-KY-IN

Columbus, OH

-2.9%

+3.6%

+4.0%

+6.1%

Ohio Markets: Occupancies Vary by Market

+3.0%

Ohio markets, ADR ($) & ADR % Change, YTD Sep 2015

$78.02

$88.45

$97.33

$99.52

$102.80

Dayton/Springfield, OH

Ohio Area

Cincinnati, OH-KY-IN

Columbus, OH

Cleveland, OH

+3.9%

+4.2%

+1.6%

Ohio Markets: Columbus Leads in ADR Growth

+2.8%

+5.7%

$46 $52

$59 $61 $62

$49 $52

$64 $66 $67

Dayton/Springfield, OH

Ohio Area Cincinnati, OH-KY-IN

Columbus, OH Cleveland, OH

YTD 2014 YTD 2015

-0.2% +8.0% +8.9% +7.9%

Ohio Markets: Columbus with Greatest RevPAR Growth YTD

Ohio markets, RevPAR $ and RevPAR % Change YTD Sep 2014 & 2015

+7.9%

Segmentation Glance:

Group Transient Contract

Segmentation

Transient ADR Growth Follows The High Occupancies

2.8%

4.3%

0%

1%

2%

3%

4%

5%

6%

2012 2013 2014 2015

Demand % Change

ADR % Change

Total US Transient Demand and ADR % Change, 12 MMA, Jan 2012 – Sep 2015

Group Demand Growth Slows As Hotels Are Full

1.9%

3.8%

-2%

-1%

1%

2%

3%

4%

5%

6%

2012 2013 2014 2015

Demand % Change

ADR % Change

Group Demand and ADR % Change, 12 MMA, Jan 2012 – Sep 2015

Is this Mix a New Normal?

30%

40%

50%

60%

70%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Trans Mix Group Mix

Transient and Group Mix, 12MMA 2005 – May 2015 NOTE: Data is for upper tier hotels only (luxury & upper upscale classes)

16.7 28.4 29.8

Group Room Premiums at 2008 Levels

$195

$206

$173 $178

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

Transient Group

Customer Segmentation ADR 2002 – 2014 Annual, Total US NOTE: Data is for upper tier hotels only (luxury & upper upscale classes)

Inflation Adjusted ADR Tells a Different Story

$214

$206

$191

$178

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

Transient Group

Customer Segmentation ADR (Adjusted for Inflation) 2002 – 2014 Annual NOTE: Data is for upper tier hotels only (luxury & upper upscale classes); Source: U.S. Department of Labor, Bureau of Statistics

-15

-5

5

15

2007 2008 2009 2010 2011 2012 2013 2014 2015

Trans. Demand % Chg

Trans. ADR % Chg

Ohio, Transient Room Demand & ADR % Change, By Month Jan 2007 – Sep 2015

Ohio: Transient ADRs Growing Even as Demand Dips

Ohio: Group Demand Growing in 2015

-30

-20

-10

0

10

20

30

2007 2008 2009 2010 2011 2012 2013 2014 2015

Group Demand % Chg

Group ADR % Chg

Ohio, Group Room Demand & ADR % Change, By Month Jan 2007 – Sep 2015

Ohio: Transient ADR 4.6% Higher than Group ADR

$84

$80 $80

$82

$85

$89

$93

$98

$80 $79

$78 $79

$83

$86

$89

$93

2008 2009 2010 2011 2012 2013 2014 YTD 2015

Transient Group

Ohio, Transient & Group ADR, Full Year 2008 – 2014, YTD Sep 2015

Hotel Pipeline

In Construction – Vertical construction on the physical building has begun. (This does not include construction on any sub-grade structures.) Final Planning – construction will begin within the next 12 months. Planning – construction will begin in more than 13 months. Unconfirmed - Potential projects that remain unconfirmed at this time.

Un

de

r C

on

trac

t STR Pipeline Phases

Un

de

r C

on

trac

t

US Pipeline: Construction Today Will Impact 2016 / 2017

Phase 2015 2014 % Change

In Construction 132 110 20%

Final Planning 175 120 46%

Planning 134 164 -18%

Under Contract 441 395 12%

*Total US Pipeline, by Phase, ‘000s Rooms, September 2015 and 2014

Limited Service Construction Has Been Strong For 2 Years

5.9

11.9

46.2 42.9

5.0 1.8

18.6

Luxury UpperUpscale

Upscale UpperMidscale

Midscale Economy Unaffiliated

*US Pipeline, Rooms Under Construction , ‘000s Rooms, by Scale, September 2015

67%

Construction In Top 26 Markets: 20 With 2%+ Of Supply

*US Pipeline, Top 26 Markets, U/C Rooms as % of Existing Supply, September 2015

Market Rooms U/C % Of Existing

Oahu Island, HI 0%

San Francisco/San Mateo, CA 430 1%

St Louis, MO-IL 332 1%

Norfolk/Virginia Beach, VA 394 1%

Orlando, FL 1,645 1%

Atlanta, GA 1,398 1%

New Orleans, LA 792 2%

Tampa/St Petersburg, FL 1,012 2%

Las Vegas, NV 3,905 2%

Chicago, IL 2,753 2%

Phoenix, AZ 1,577 3%

Detroit, MI 1,126 3%

San Diego, CA 1,785 3%

Seattle, WA 1,334 3%

Washington, DC-MD-VA 3,588 3%

Minneapolis/St Paul, MN-WI 1,548 4%

Philadelphia, PA-NJ 1,846 4%

Boston, MA 2,144 4%

Los Angeles/Long Beach, CA 4,052 4%

Anaheim/Santa Ana, CA 2,291 4%

Dallas, TX 3,427 4%

Nashville, TN 1,703 4%

Denver, CO 2,404 6%

Miami/Hialeah, FL 3,314 7%

Houston, TX 6,639 9%

New York, NY 13,107 11%

Ohio Room Supply: Upscale & Upper Midscale with 82 Total Projects

1609

2913

5596

331

117 986

Upper Upscale

Upscale

Upper Midscale

Midscale

Economy

Unaffiliated

Ohio: Rooms Under Contract Pipeline by Chain Scale, Under Contract: In Construction, Final Planning & Planning, September 2015

*Chain scales not shown do not have projects in the under contract pipeline at this time

Ohio Pipeline Details: 4% of Supply In Construction

232 588

1029

2155 1577

376

576

832

400 1300

888

523

278

1158

0

1000

2000

3000

4000

Dayton/Springfield, OH

Columbus, OH Cincinnati, OH-KY-IN

Cleveland, OH Ohio Area

Planning

Final Planning

In Construction

2384 2052

2833

4035

Ohio Markets: In Construction & Final Planning & Planning Sep 2015

608

Forecast: Where Are We Headed?

Total United States Key Performance Indicator Outlook (% Change vs. Prior Year) 2014

Outlook

2014 Forecast

(as of Aug 2014)

2014 Actual

Supply 1.0% 0.8%

Demand 3.6% 4.3%

Occupancy 2.6% 3.5%

ADR 4.2% 4.5%

RevPAR 6.9% 8.2%

2016 STR PKF PwC

Supply 1.4% 1.7% 1.9%

Demand 2.2% 1.9% 2.3%

Occupancy 0.8% 0.2% 0.0%

ADR 5.2% 6.3% 5.7%

RevPAR 6.0% 6.5% 5.7%

Forecast Summary 2015 STR (as of Aug) PKF (as of Apr) PwC (as of Nov)

Supply 1.2% 1.2% 1.1%

Demand 2.9% 3.1% 2.9%

Occupancy 1.7% 1.9% 1.8%

ADR 5.1% 5.3% 4.7%

RevPAR 6.8% 7.3% 6.5%

*As of August 2015

Valerie Woods

vwoods@str.com

615-824-8664 x3328

Valerie_STR

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