Master Slides 2021
Transcript of Master Slides 2021
Source: 2021 STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Realty Information, Inc. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. The information in the presentation should not be construed as investment, tax, accounting or legal advice.
Hotel performanceWhere are we now and what next
Robin Rossmann – Managing Director, STR
Source: STR. 2021 © CoStar Realty Information, Inc.
AgendaKey questions for today
Supply… returns to normal
• How many hotels will never re-open?
• Will we still build new hotels?
Demand delay or replay?
• Leisure: pent-up or post-travel?
• Business: zoom or resume?
Forecasts
• Party, panic or keep calm and carry on?
• Will hotels still make money?
Source: STR. 2021 © CoStar Realty Information, Inc.
SupplyReturns to
normal
Source: STR. 2021 © CoStar Realty Information, Inc.
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
United States Europe Middle East
97% of Middle East hotels have re-openedSTR Sample Rooms Open by Geography – January 2020 through August 2021
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2020 2021
WHO Declares COVID-19 Global Pandemic
Source: STR. 2021 © CoStar Realty Information, Inc.
Will new hotels continue to open in the Middle East? … YesMiddle East, New Openings & Pipeline (Completion & Delay Rates Applied), 2011-23
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New Openings Pipeline
Forecast
Source: STR. 2021 © CoStar Realty Information, Inc.
… and Dubai? Yes, but a bit more slowly that 2018-19Dubai, New Openings & Pipeline (Completion & Delay Rates Applied), 2011-23
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New Openings Pipeline
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Source: STR. 2021 © CoStar Realty Information, Inc.
Demand delay or replay
Source: STR. 2021 © CoStar Realty Information, Inc.
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Africa United States Europe Mainland China Middle East
Most regions trending in the right direction Rolling 7 days occupancy (full inventory) indexed to 2019, January 2020 – September 2021
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Source: STR. 2021 © CoStar Realty Information, Inc.
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Africa United States Europe Mainland China Middle East
… and ADR has shown how quickly it can bounce backRolling 7 days ADR, Local Currency, indexed to 2019, January 2020 – September 2021
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© 2018 STR. All Rights Reserved.
Middle East
Source: STR. 2021 © CoStar Realty Information, Inc.
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Full Occupancy recovery in 2021 a possibility for someME cities, Occupancy (standard) August YTD 2021 indexed to 2019
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LEISURE QUARANTINE / DOMESTIC RESTRICTIONS
Source: STR. 2021 © CoStar Realty Information, Inc.
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100% Occupancy 2019 Occupancy 2021
Abu Dhabi occupancy eclipses 2019 from summer onwardsRolling 7 days occupancy (standard),– 2021 vs 2019
Source: STR. 2021 © CoStar Realty Information, Inc.
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Occupancy 2019 Occupancy 2021
Dubai occupancy gap closes considerably in H2Rolling 7 days occupancy (standard),– 2021 vs 2019
Source: STR. 2021 © CoStar Realty Information, Inc.
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Al Khobar Dammam Jeddah Makkah Medina Riyadh
Riyadh, Damman & Al Khobar up! Jeddah, Makkah & Medina trailingSaudi Arabia, Rolling 7 days occupancy (standard) indexed to 2019, Jan – Sep 2021
Source: STR. 2021 © CoStar Realty Information, Inc.
$-
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YTD 2021 YTD 2019
Big variance in ADR change by market, from 10% growth to 50% downME cities, ADR, USD, August YTD 2019, 2021
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Greater than 20% decrease 2021 vs 2019RevPAR 2021 higher than 2019
Source: STR. 2021 © CoStar Realty Information, Inc.
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140%RevPAR Index
As a result some already at 2019 levels whilst others some way offRevPAR indexed to August YTD 2019, USD, August YTD 2021
“Strugglers”>50% away from
2019 levels
Source: STR. 2021 © CoStar Realty Information, Inc.
However, the range of performance of hotels in a market is hugeWeekly occupancy distribution of all hotels in the market indexed to 2019
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under 75 75-100 over 100
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under 75 75-100 over 100
Source: STR. 2021 © CoStar Realty Information, Inc.
… with half of Dubai hotels already exceeding 2019 ADRsWeekly ADR of all hotels in the market indexed to 2019
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under 75 75-100 over 100
Source: STR. 2021 © CoStar Realty Information, Inc.
Leisure demand – pent-up or post travel?Will people stop travelling abroad to go on holiday?
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Source: STR. 2021 © CoStar Realty Information, Inc.
Currently travellers are still reluctant to fully resume leisure travelThinking about the current COVID-19 situation, are you likely to travel for leisure/holidays
more or less compared to before pandemic?
38% 42% 17%3%
63% 26% 7%4%
Less likely to travel As likely to travel More likely to travel Not sure
Domestic trip International trip
Base: Total (1750)
Domestic Net propensity
-21%
International Net propensity
-55%
Source: STR. 2021 © CoStar Realty Information, Inc.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Other
Financial reasons due to COVID-19
Travel insurance concerns
Concerned about cleanliness of accommodation
Additional costs due to required testing
Lack of confidence in destination
Concerned about traveling (e.g. flying)
Experience will be negatively impacted
Last minute cancellations
Refund challenges due to cancellation
Concerned about my own health
Unvaccinated fellow travelers
Fellow travelers not following the rules
Potential hassle of quarantine
Government legislation / restrictions
Government
Comfort
Financial
Current reluctancy to travel is primarily due to travel restrictionsBased on our survey of 1,750 travel consumers
Jul 2021 Feb 2021
7% 60% 31%2%
16% 46% 34%4%
Less likely to travel As likely to travel More likely to travel Not sure
Domestic trip International trip
Once the pandemic is over people are expecting more leisure travel than before COVID
Base: Total (1750)
Domestic Net propensity
+24%
International Net propensity
+19%
Thinking further ahead to when pandemic is completely over, are you likely to travel for leisure/holidays more or less compared to before pandemic?
But be careful… red tape can be very sticky
Source: STR. 2021 © CoStar Realty Information, Inc.
The budget
Sample: 139 execs in charge of travel
Forecast 65%-80% recovery by Q4 2022
Who Surveys View
The business traveller
Sample: 3,850 business travellers in 25 global markets
96% willing to return to business travel and 65% “very willing”
Business travel – to zoom or resume, that is the questionThe people want to travel… but red-tape, budgets and sustainability likely to slow recovery
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1 in 10 business travellers say their partners want them out of the house!
Source: STR. 2021 © CoStar Realty Information, Inc.
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Bookings remain very last minuteDubai, Occupancy on the books for the next 365 days as at September 6th 2021
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EXPONew Year’s Eve
Source: STR. 2021 © CoStar Realty Information, Inc.
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Rome Madrid Paris London Qatar Abu Dhabi Dubai
Luxury & Upper Upscale Classes Upscale & Upper Mid Classes Midscale & Economy Classes
… although the Middle East looking more solid than EuropeNext 90 day occupancy average, As of September 6th 2021
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Source: STR. 2021 © CoStar Realty Information, Inc.
Forecasts
28Source: STR. 2021 © CoStar Realty Information, Inc.
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UAE Cities: EXPO accelerates short-term recoveryUAE Cities*, OCC, Historical Jan 2019 – July 2021, Forecast Aug 2021 – Dec 2022
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Q421: c.5pp lower than 2019
Q420: c.23pp lower than 2019
*Aggregated performance of Abu Dhabi and Dubai
2022
Q422: c.9pp lower than 2019
29Source: STR. 2021 © CoStar Realty Information, Inc.
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UAE Cities: A rapid ADR returnUAE Cities*, ADR (AED), Historical Jan 2019 – July 2021, Forecast Aug 2021 – Dec 2022
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Q421: c.1% lower than 2019
Q420: c.30% lower than 2019
*Aggregated performance of Abu Dhabi and Dubai
2022
Q422: c.2% lower than 2019
Source: STR. 2021 © CoStar Realty Information, Inc.
ME profitability has improved greatly since beginning of the yearContinents, 2021 GOPPAR indexed to 2019, USD CC
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Source: STR. 2021 © CoStar Realty Information, Inc.
With Qatar, Dubai and Saudi at the top of the profit recovery boardTop international markets, 2021 TRevPAR and GOPPAR indexed to 2019 July YTD, USD CC
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Source: STR. 2021 © CoStar Realty Information, Inc.
Conclusions
Source: 2020 STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Realty Information, Inc. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. The information in the presentation should not be construed as investment, tax, accounting or legal advice.
QuestionsRobin Rossmann