OHLA | STR Forecasting 2022
Transcript of OHLA | STR Forecasting 2022
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.
OHLA | STR Forecasting 2022Lodging Industry Update
Rico Louw | Central Region Sales Manager
Luke Veneskey| Sales Associate for OK & AR
Source: STR. 2021 © CoStar Realty Information, Inc.
Performance Reports
Occ, ADR, RevPAR
Supply/Demand
Revenue
P&L
Supply Reports
Existing supply
Future supply
Pipeline
Characteristics
Research Studies
Event Impact
Regional Performance Reviews
Whitepapers
Ad Hoc studies
Forecast Reports
Main KPIs
5 years/6 quarters/18 months
Macro economic input
Micro economic input
Analysis
Compression
Day of Week
Event Impact
Bespoke client reporting
What we doCollecting data from +70,000 hotels, globally
2
Source: STR. 2021 © CoStar Realty Information, Inc.
68 5062
83
75
93
9384 42
78
Just when we thought we had it bad…RevPAR indexed to 2019, local currency, September 2021
Northern Africa
Europe
Australia & Oceania
Central America
South America excl. Venezuela
Asia (excl. Mainland China)
Middle East
United States
Southern Africa
Mainland China
RevPAR Index
75
North America excl. US
Source: STR. 2021 © CoStar Realty Information, Inc.
4%
19%
23%
36%
37%
41%
41%
47%
47%
47%
50%
50%
56%
66%
69%
Other
Financial reasons due to COVID-19
Travel insurance concerns
Concerned about cleanliness of accommodation
Additional costs due to required testing
Concerned about traveling (e.g. flying)
Lack of confidence in destination
Refund challenges due to cancellation
Last minute cancellations
Experience will be negatively impacted
Unvaccinated fellow travelers
Concerned about my own health
Fellow travelers not following the rules
Potential hassle of quarantine
Government legislation / restrictions
Government legislation (still) the greatest barrier to travelSTR Traveller Survey, July 2021
Comfort FinancialGovernment
Q: Please tell us why COVID-19 has influenced your decision not to book or undertake travel yet? Base: Not Traveled or Booked (568)
Source: STR. 2021 © CoStar Realty Information, Inc.
Actual 2019 Index
Room Supply (TRI) 103
Room Demand 86
Occupancy (standard) 57.6% 85
ADR $122 92
RevPAR (standard) $70 79
Room Revenue 79
YTD metrics getting closer to “normal” levelsTotal US, YTD September 2021
Source: STR. 2021 © CoStar Realty Information, Inc.
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
1990 2000 2010 2020
Supply R12 % Change Demand R12 % Change
R12 demand change positive after 18 months in the redTotal U.S., 12 MMA supply (standard) and demand % change, Jan 1990 – Sep 2021
Source: STR. 2021 © CoStar Realty Information, Inc.
-40%
-30%
-20%
-10%
0%
10%
20%
1990 2000 2010 2020
Occupancy R12 % Change ADR R12 % Change
R12 ADR % change again in the blackTotal U.S., 12 MMA Occupancy (standard) and ADR % change, Jan 1990 – Sep 2021
Source: STR. 2021 © CoStar Realty Information, Inc.
0
50
100
150
200
250
300
1990 1995 2000 2005 2010 2015 2020
Sep 2021215.8
September RevPAR around 2015 levelsTotal U.S., RevPAR indexed to same month in 1990, Jan 1990 – Sep 2021
Source: STR. 2021 © CoStar Realty Information, Inc.
5660
6975 77 75 73 72 73 73
7780
8489
96
106 104 101
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21
Rate recovery decelerates as groups slowly return Total U.S., ADR indexed to 2019, Apr 2020 – Sep 2021
9
Source: STR. 2021 © CoStar Realty Information, Inc. 10
Class Review
Source: STR. 2021 © CoStar Realty Information, Inc.
Rates remain high across the boardTotal U.S., Occupancy (TRI) and ADR indexed to 2019, Sep 2021
79.1 74.286.4 94.0 100.3 101.2
114.397.5 98.6 105.7 110.3 109.2
Luxury Class Upper UpscaleClass
Upscale Class Upper MidscaleClass
Midscale Class Economy Class
Occ Index ADR Index
Source: STR. 2021 © CoStar Realty Information, Inc.
74
57
72
85
96 99
78
60
73
86
96 99
Luxury Class Upper Upscale Class Upscale Class Upper Midscale Class Midscale Class Economy Class
RevPAR (TRI) Index RevPAR (Standard) Index
Luxury recovery outpaces Upscale thanks to high ADRTotal U.S., RevPAR indexed to 2019, YTD Sep 2021
Source: STR. 2021 © CoStar Realty Information, Inc.
Three classes with YTD ADR better than 2019Total U.S., ADR by class, YTD Sep 2019, 2020, 2021
$303
$189
$145$117
$97$77
$291
$166
$122$101
$86$67
$336
$174
$131$114
$99$77
Luxury Class Upper Upscale Class Upscale Class Upper Midscale Class Midscale Class Economy Class
2019 2020 2021
Source: STR. 2021 © CoStar Realty Information, Inc. 14
Segmentation
Photo by Headway on Unsplash Photo by Divyanshi Verma on Unsplash
Source: STR. 2021 © CoStar Realty Information, Inc.
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000Ja
n-1
9
Feb
-19
Mar
-19
Ap
r-1
9
May
-19
Jun
-19
Jul-
19
Au
g-1
9
Sep
-19
Oct
-19
No
v-1
9
Dec
-19
Jan
-20
Feb
-20
Mar
-20
Ap
r-2
0
May
-20
Jun
-20
Jul-
20
Au
g-2
0
Sep
-20
Oct
-20
No
v-2
0
Dec
-20
Jan
-21
Feb
-21
Mar
-21
Ap
r-2
1
May
-21
Jun
-21
Jul-
21
Au
g-2
1
Sep
-21
Group demand lifts off!Total U.S., Group demand, Jan 2019 – Sep 2021
15
Source: STR. 2021 © CoStar Realty Information, Inc.
Group rates soften from August but still 96% of the way backTotal U.S., segmentation ADR indexed to 2019, Oct 2020 – Sep 2021
0
20
40
60
80
100
120
Oct-20 Dec-20 Feb-21 Apr-21 Jun-21 Aug-21
Transient ADR Index Group ADR Index
Source: STR. 2021 © CoStar Realty Information, Inc.
Groups slowly but surely improving; transient needs business demandTotal U.S., segmentation RevPAR (standard) indexed to 2019, Oct 2020 – Sep 2021
0
20
40
60
80
100
120
Oct-20 Dec-20 Feb-21 Apr-21 Jun-21 Aug-21
Transient RevPAR Index Group RevPAR Index
Source: STR. 2021 © CoStar Realty Information, Inc. 18
Markets
Photo by Jonathan Roger on Unsplash
Source: STR. 2021 © CoStar Realty Information, Inc.
Top 25: Best and Worst Top 25 markets, YTD Sep 2021, by RevPAR % Change
Market OCC (standard) RevPAR % Change Influenced ByNorfolk/Virginia Beach, VA 63.6% 67.8% Military
Nashville, TN 57.4% 64.1% Bachelorettes
Chicago, IL 48.8% 59.6%
Saint Louis, MO 52.1% 57.0%
Denver, CO 59.3% 56.8%
Oklahoma City, OK 54.7% 48.6%
Tulsa, OK 55.4% 47.9%
Phoenix, AZ 61.2% 21.7%
Washington, DC 47.0% 18.9% Lockdown
Oahu Island, HI 54.3% 16.2% Travel restrictions
New Orleans, LA 49.3% 10.9% Festival season cancelled
San Francisco/San Mateo, CA 45.7% -21.2% Lockdown
Source: STR. 2021 © CoStar Realty Information, Inc.
2
2
33
3
4
3
4
2
0.0
1.0
2.0
3.0
4.0
5.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
Jan Feb Mar Apr May Jun Jul Aug Sep
Other Markets Top 25 Markets Difference
Occupancy gap shrinks as other market occ fallsTotal U.S., Occupancy (standard), Jan – Sep 2021
20
Source: STR. 2021 © CoStar Realty Information, Inc.
-8 -9 -9-11
-12-11 -10 -9
-20
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
$0
$20
$40
$60
$80
$100
$120
$140
$160
Jan Feb Mar Apr May Jun Jul Aug Sep
Other Markets Top 25 Markets Difference
T25 rates improve; other market ADR falls almost $10 from AugTotal U.S., ADR, Jan – Sep 2021
21
Source: STR. 2021 © CoStar Realty Information, Inc. 22
Pipeline
Photo by Max Langelott on Unsplash
Source: STR. 2021 © CoStar Realty Information, Inc.
0
50
100
150
200
250
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Ro
om
s in
th
ou
san
ds
Low:May 2011
49.9K
Current:Sep 2021
172.2K
Previous peak:Dec 2007
211.7K
Peak:Apr 2020220.2K
U.S. hotel rooms under construction down from 2020 peakU.S., In construction rooms in thousands, Jan 2006 – Sep 2021
Source: STR. 2021 © CoStar Realty Information, Inc.
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2015 2016 2017 2018 2019 2020 2021
Opened Projected to open
US pipeline higher than average post-COVIDTotal U.S., Rooms opened by year, 2015-2021
24Projected to open = I/C rooms with projected opening dates in 2021
Source: STR. 2021 © CoStar Realty Information, Inc.
11.6
22.0
47.1 44.6
14.1
5.8
27.1
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated
Limited-service construction (still) dominates…U.S. in construction rooms in thousands, by scale, September 2021
54%
Source: STR. 2021 © CoStar Realty Information, Inc.
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Planning Final Planning In Construction
Other Markets Top 25 Markets
Top 25 markets account for 46% of all I/C roomsTotal U.S., active pipeline by market type and % of I/C rooms by market type, Sep 2021
26
54%
46%
Other Markets Top 25 Markets
Source: STR. 2021 © CoStar Realty Information, Inc.
76%
24%IHG, Choice, Hilton, Hyatt,Marriott, Wyndham
All Other (incl. unbranded)
“Big 6” brands (and their distribution networks) dominate pipelineU.S., active pipeline by brand, Q3 2021
Source: STR. 2021 © CoStar Realty Information, Inc. 28
Forecast
Photo by Sasha • Stories on Unsplash
Source: STR. 2021 © CoStar Realty Information, Inc.
34.0%
98.0%
43.0%
106.0%
ADR Demand
Forecast Actual
Demand beat the forecastQ2 2021, ADR and Demand – Forecast vs. Actual
Source: STR. 2021 © CoStar Realty Information, Inc.
Metric2020
Actual2021
Forecast2022
Forecast
Occupancy * 41.6% 54.7% 61.8%
ADR $103.008 $115.50 $122.39
RevPAR * $42.87 $63.16 $75.63
RevPAR* Indexed to 2019 -50.1% -26.9% -12.4%
Comparable RevPAR* Year 1995 2012 2014
*Reflects Total-Room-Inventory (TRI) methodology, which assumes no temporary hotel closures.
U.S. ForecastKey Performance Indicators2020 – 2021F – 2022F
Source: STR. 2021 © CoStar Realty Information, Inc.
US Forecast: A multi-year recovery
100.0
49.9
73.5
88.0
98.1104.0
2019 2020 2021F 2022F 2023F 2024F
Demand Occ (TRI*) ADR RevPAR (TRI*)
*Reflects Total-Room-Inventory (TRI) methodology, which assumes no temporary hotel closures.
Indexed to end of 2019, 2019 – 2024F
Source: STR. 2021 © CoStar Realty Information, Inc.
The Bottom Line
The end of summer slow down brought weaker profitability
F&B revenues still weak with lack of groups, although venue revenues keeping pace with rooms department
Profit margins remain at normal levels despite slower demand
Labor costs rising despite weakened demand and lower levels of employment
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.
OHLA | STR Forecasting 2022Lodging Industry Update
Rico Louw | Central Region Sales Manager
Luke Veneskey| Sales Associate for OK & AR
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.
Oklahoma Market
Source: STR. 2020 © CoStar Realty Information, Inc.
Right at 2019 Levels, Room to close gapsOklahoma State, Running 7 days, Occ % and ADR
Source: STR. 2020 © CoStar Realty Information, Inc.
Sporting Event Spikes, again room to close gapsOklahoma City, Running 7 days, Occ % and ADR
OK vs KS
OK vs MO
Women’s WS
OK vs NE & WV
Equine
Source: STR. 2020 © CoStar Realty Information, Inc.
Unknown Spikes, well done on gab closing!Tulsa, Running 7 days, Occ % and ADR
Source: STR. 2020 © CoStar Realty Information, Inc.
6% Occupancy currently separates weekday and weekend performance
Oklahoma State, Monthly ADR by DOW, Feb 2020 till Oct 2021
Source: STR. 2020 © CoStar Realty Information, Inc.
High of 30% Occupancy gap during Football Season
Oklahoma City, Monthly ADR by DOW, Feb 2020 till Oct 2021
Source: STR. 2020 © CoStar Realty Information, Inc.
High of 30% Occupancy gap during weekend spikes
Tulsa, Monthly ADR by DOW, Feb 2020 till Oct 2021
Source: STR. 2020 © CoStar Realty Information, Inc.
Oklahoma State, Monthly ADR by DOW, Feb 2020 till Oct 2021
Weekend ADR up $5 vs Weekday, trending above 2019
Source: STR. 2020 © CoStar Realty Information, Inc.
Oklahoma City, Monthly ADR by DOW, Feb 2020 till Oct 2021
Driving the State as a whole, more event spikes
Source: STR. 2020 © CoStar Realty Information, Inc.
Tulsa, Monthly ADR by DOW, Feb 2020 till Oct 2021
Following along, large weekend dip in August
Source: STR. 2020 © CoStar Realty Information, Inc.
Multiple market weekly average occupancy – Competitor Markets
Oklahoma City and Tulsa are in the mix with their competitors
Source: STR. 2020 © CoStar Realty Information, Inc.
Multiple market weekly average occupancy – Oklahoma City & Tulsa Highlighted
Spikes in both cities see 65% occupancy in 2021
Source: STR. 2020 © CoStar Realty Information, Inc.
Multiple market weekly average ADR - Competitor Markets
Oklahoma City and Tulsa are at lower end to their competitors
Source: STR. 2020 © CoStar Realty Information, Inc.
Multiple market weekly average ADR – Oklahoma City & Tulsa Highlighted
Both cities hold steady at $80 ADR in 2021
Source: STR. 2020 © CoStar Realty Information, Inc.
Multiple market weekly average RevPAR - Competitor Markets
Oklahoma City and Tulsa show room for improvement
Source: STR. 2020 © CoStar Realty Information, Inc.
Multiple market weekly average RevPAR – Oklahoma City & Tulsa Highlighted
Both cities stay above $40 RevPAR in 2021
Source: STR. 2020 © CoStar Realty Information, Inc.
Case Study: San Antonio – Major spikes from events
Multiple market weekly average RevPAR – Oklahoma City & Tulsa Highlighted
March Madness Finals
Fiesta Festival
Source: STR. 2020 © CoStar Realty Information, Inc.
Summer is the peak, Dec & Jan are the valley – forecast is similarTulsa Submarket Occupancy, Historical & Forecasted
Source: STR. 2020 © CoStar Realty Information, Inc.
Similar to Tulsa – South/Airport leading wayOklahoma City Submarket Occupancy, Historical & Forecasted
Source: STR. 2020 © CoStar Realty Information, Inc.
CBD above others show good signs – group coming back to life!Tulsa Submarket ADR, Historical & Forecasted
Source: STR. 2020 © CoStar Realty Information, Inc.
Norman/Moore ending 2021 on a high – others holding steadyOklahoma City Submarket ADR, Historical & Forecasted
Source: STR. 2020 © CoStar Realty Information, Inc.
Close to 2019 levels in 2022, Luxury longer road to recoveryTulsa, collapsed class Occupancy, running 12 months
Source: STR. 2020 © CoStar Realty Information, Inc.
Full-Service leading the way into 2022 – OK’s bread and butterOklahoma City, collapsed class Occupancy, running 12 months
Source: STR. 2020 © CoStar Realty Information, Inc.
Group roars back surpassing pre-pandemic performanceTulsa rooms demand, transient & group segments, March 2020 till October, 2021
Source: STR. 2020 © CoStar Realty Information, Inc.
Transient demand surpassing pre-pandemic performanceOklahoma City rooms demand, transient & group segments, March 2020 till October, 2021
Source: STR. 2020 © CoStar Realty Information, Inc.
After March 2020: 502 Rooms Delivered Oklahoma State Rooms Delivered by Class, last 6 years
Source: STR. 2020 © CoStar Realty Information, Inc.
76 Projects, All Phases: 7,322 Rooms in next 7 Years Future Projects, Oklahoma Markets
In Construction Phase Projects:Oklahoma City - 10Tulsa - 2Other Markets - 2
In Construction Phase Rooms:Oklahoma City – 1,074Tulsa - 144Other Markets – 153
Source: STR. 2020 © CoStar Realty Information, Inc.
After March 2020: 960 Rooms DeliveredOklahoma City Rooms Delivered by Class, last 6 years
Source: STR. 2020 © CoStar Realty Information, Inc.
After March 2020: 103 Rooms DeliveredTulsa Rooms Delivered by Class, last 6 years
Source: STR. 2020 © CoStar Realty Information, Inc.
Giving the rest of Oklahoma some love – $ not sufficient Oklahoma Markets not Tulsa and Oklahoma City, total RevPAR
Source: STR. 2020 © CoStar Realty Information, Inc.
What is STR up to?
Monthly P&L Program
Source: STR. 2020 © CoStar Realty Information, Inc.
What is STR up to?
Forward looking data through rooms booked
Successful revenue-management strategies hinge on the ability to forecast demand. Competitive insights on the buildup and distribution of your Occupancy on the Books compared with your competition can help you identify a wide range of opportunities to adjust your strategy and drive greater market share.
Forward STAR
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.
OHLA | STR Forecasting 2022
Questions
Rico Louw | Central Region Sales Manager
Luke Veneskey| Sales Associate for OK & AR
Source: STR. 2020 © CoStar Realty Information, Inc.
Construction Pipeline