Hot New Trends in Hospitality. Moving From Simmer to Sizzle.

1,051 views

Published on

2010 ULI Fall Meeting Presentation
October 13, 2010
9:00 am to 10:15 am

Published in: Business, Travel
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,051
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
18
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Hot New Trends in Hospitality. Moving From Simmer to Sizzle.

  1. 1. Hot New Trends in Hospitality. Moving from Simmer to Sizzle. Wednesday, October 13 9:00 a.m. - 10:15 a.m.
  2. 2. The worst year on record is now behind us. 2
  3. 3. Long Term Average 2006 2007 2008 2009 Supply 2.2% 0.2% 1.3% 2.5% 3.1% Demand 1.5% 0.5% 0.8% -2.1% -5.9% Occupancy 62.2% 63.1% 62.8% 60.0% 54.7% ADR 2.9% 7.6% 6.4% 2.8% -8.8% RevPAR 2.3% 7.9% 5.9% -1.9% -16.8% National Horizon Where We Have Been Record Decline Source: Colliers PKF Hospitality Research – September-November 2010 Hotel Horizons® Report, Smith Travel Research 3
  4. 4. The Hotel Market Cycle Rapid Development Occupancy Declines, ADR Follows Development at Minimum Levels Lodging Decline, Leads Other Sectors Occupancy Recovers ADR and Margins Recover Development Picks Up Development Slows Lodging Recovers, Lags Other Sectors Long Run Occupancy Rapid Development Equilibrium ADR U.S. is Here 2011-2012 Moving Past the Trough 2013-2014 A Year Ago 4
  5. 5. Long Term Average 2010F 2011F 2012F Supply 2.2% 2.0% 1.1% .08% Demand 1.5% 7.3% 3.2% 4.9% Occupancy 62.2% 57.5% 58.7% 61.0% ADR 2.9% -0.6% 3.8% 6.3% RevPAR 2.3% 4.6% 5.9% 10.6% Record Increase Source: Colliers PKF Hospitality Research – September-November 2010 Hotel Horizons® Report, Smith Travel Research 5 National Horizon U.S. National Forecast
  6. 6. Change in Number of Events Percent of Meeting Planners - More Meetings and Exhibitions 20% 32% 12% 22%24% 12% 55% 57% 70% 72% 6% 18% 0% 20% 40% 60% 80% 100% Meetings From 2009 to 2010 Meetings From 2010 to 2011 Exhibitions From 2009 to 2010 Exhibitions From 2010 to 2011 Increase Decrease Stay The Same Source: ConventionSouth, Colliers PKF Hospitality Research 6
  7. 7. Recovery Will Be Strong Through 2013 Annual Change in Unit-Level NOI* -40% 0% 40% 80% 1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2013F +64.6% - 1943 -22.4% - 1938 -19.4% - 2001 -35.4% - 2009 +10.8% - 2011F +17.9% - 2012F +21.7% - 2013F Note: * Before deductions for capital reserve, rent, interest, income taxes, depreciation, and amortization. Source: Colliers PKF-HR, Trends® in the Hotel Industry sample. 7
  8. 8. $15,621 $17,198 $13,862 $12,531 $10,977 $10,663 $10,912 $12,095 $14,257 $16,506 $12,229 $14,124 $16,006 $17,158 $6,000 $10,000 $14,000 $18,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F 2011F 2012F Note: * Before capital reserve, debt service, rent, income taxes, depreciation, amortization. Source: Colliers PKF Hospitality Research Dollars per Available Room Nominal Dollar Operating Profits* Just Back to 2005 8
  9. 9. The Cycle of Hotel Real Estate Emotions- What Better Time? 2007 2004 2009-2010 2011 2008 – 1st Half 2008 – 2nd Half 2011-12 9
  10. 10. More Profits = More Transactions? Unit Level Hotel Profits* and Hotel Transaction Volume Note: * Before deduction for capital reserve, rent, interest, income taxes, depreciation, and amortization. Sources: Real Capital Analytics July 2010, Colliers PKF Hospitality Research, September 2010 Hotel Horizons® Report 10
  11. 11. Summary When will profit growth return and be sustained? a) Supply/demand imbalance; capital market turmoil and depressed market values will keep development at a standstill into 2012/2013. b) Signs are positive that recovery has begun to accelerate; however, a buyer’s market will persist into 2011. Six consecutive quarters of rate declines ended in Q2 2010, leading to c) Profit growth in 2010 – stays well-above average through 2013. 11
  12. 12. Thank you for your time. www.pkfc.com 12

×