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Rachel J. Roginsky, ISHC [email protected] 164 Canal Street Boston, MA 02114 ~ 617/722-9916 www.pinnacle-advisory.com OUTLOOK 2007
Rachel J. Roginsky, [email protected]
164 Canal Street Boston, MA 02114 ~ 617/722-9916
www.pinnacle-advisory.com
OUTLOOK 2007
NATIONAL LODGING MARKET
Total U.S. Monthly Room Supply – Seasonally Adjusted January 1989 to April 2006
Source: Smith Travel Research
90,000,000
100,000,000
110,000,000
120,000,000
130,000,000
140,000,000
150,000,000
1989 1991 1993 1995 1997 1999 2001 2003 2005
Seas Adj
CAGR – 2.065%
CAGR 3.5%
CAGR 0.8%
4.4 Million Rooms
3.1 Million Rooms
Source: Smith Travel Research
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
1989 1991 1993 1995 1997 1999 2001 2003 2005
Seas Adj Monthly Average
Peak CAGR – 2.7%
CAGR – 2.061%
6.1%
Total U.S.Monthly Room Demand – Seasonally AdjustedJanuary 1989 to April 2006
59 59.2
63.1
61.3
64.864.4
55
60
65
70
2002 2003 2004 2005 2006P 2007P
Total United States Occupancy Percent2002 – 2007P
Source: Smith Travel Research
4.1
5.4
-1.5
6.56.7
0.1
-2.0
0.0
2.0
4.0
6.0
8.0
2002 2003 2004 2005 2006P 2007P
Total United States ADR Percent Change2002 – 2007P
Source: Smith Travel Research
8.5 8.9
7.17.8
0.4
-2.7
-5.0
0.0
5.0
10.0
2002 2003 2004 2005 2006P 2007P
Total United States RevPAR Percent Change2002 – 2006P
Source: Smith Travel Research
Top 25 Market Areas – Occupancy Percent 2005
Source: Smith Travel Research
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Detro
it, M
I
Norfo
lk-VA B
each
, VA
St. Lo
uis, M
O, IL
Dallas
, TX
Nashv
ille, T
N
Denve
r, CO
United
Sta
tes
Chicag
o, IL
Atlant
a, G
A
Bosto
n, M
A
Houst
on, T
X
Tam
pa-S
t. Pet
e
Minn
-St P
aul
Phoen
ix, A
Z
New O
rlean
s, L
A
Seattl
e, W
A
Philad
ephia
, PA-N
J
Orland
o, F
L
Was
hingt
on, D
C-MD-V
A
San F
ran-
San M
ateo
, CA
San D
iego,
CA
Miam
i-Hial
eah,
FL
Anahe
im -
Santa
Ana
, CA
LA-L
ong
Beach
, CA
New Yo
rk, N
Y
Oaho
Islan
d, H
I
Top 25 Market Areas – Average Daily Rate 2005
Source: Smith Travel Research
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
Top 25 Market Areas – RevPAR 2005
Source: Smith Travel Research
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
Key 15 Markets RevPAR Percent ChangeApril 2006 YTD Year-over-Year
3.5
7.2
7.5
9.0
9.9
10.0
10.7
11.1
11.5
11.6
12.4
15.5
16.6
17.6
17.8
20.0
2.4
0 5 10 15 20 25
Washington
Philadelphia
Orlando
All Other Markets
Total US
New York
Los Angeles
San Diego
Top 25 Markets
Miami
Phoenix
Boston
San Francisco
Honolulu
Atlanta
Dallas
Chicago
Source: Smith Travel Research
SUBURBAN BOSTON LODGING MARKET
Suburban Boston Occupancy 1996 - 2005
Source: Smith Travel Research/Pinnacle Advisory Group
69.4% 71.1% 69.9% 70.0%73.3%
61.3%58.3%
54.8%58.5% 59.7%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Suburban Boston Average Daily Rate 1996-2005
Source: Smith Travel Research/Pinnacle Advisory Group
$96.13 $92.22$90.71
$94.68
$105.13$107.73
$102.08$98.30
$90.32
$81.51$75.35
$-
$25.00
$50.00
$75.00
$100.00
$125.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Suburban Boston RevPAR 1996 - 2005
Source: Smith Travel Research/Pinnacle Advisory Group
$53.93 $53.93
$49.89$55.70
$65.11
$79.31
$69.16$68.71$64.22
$56.57
$-
$25.00
$50.00
$75.00
$100.00
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Suburban Boston Supply and Demand 1999 - 2005
Source: Smith Travel Research/Pinnacle Advisory Group
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
1999 2000 2001 2002 2003 2004 2005
Supply
Demand
Suburban Boston Occupancy YTD May 2004 - 2006
Source: Smith Travel Research/Pinnacle Advisory Group
51.7%
53.4%
55.4%
40.0%
42.0%
44.0%
46.0%
48.0%
50.0%
52.0%
54.0%
56.0%
58.0%
2004 2005 2006
Suburban Boston Average Daily Rate YTD May 2004 - 2006
Source: Smith Travel Research/Pinnacle Advisory Group
$92.86
$97.85
$89.02
$84.00
$86.00
$88.00
$90.00
$92.00
$94.00
$96.00
$98.00
$100.00
2004 2005 2006
Suburban Boston RevPAR YTD May 2004 - 2006
Source: Smith Travel Research/Pinnacle Advisory Group
$45.96
$49.63
$54.23
$40.00
$42.00
$44.00
$46.00
$48.00
$50.00
$52.00
$54.00
$56.00
2004 2005 2006
•Hilton Garden Inn – Plymouth – 130 Rooms – May
•Hampton Inn and Suites – Plymouth - 122-rooms – August
•Residence Inn – Marlborough – 112 Rooms - October
•Residence Inn – Norwood – 96 Rooms – November
Suburban Boston New Supply 2006
Source: Pinnacle Advisory Group
Source: Pinnacle Advisory Group
•Improving Economy
•Stronger Office Market
•Limited New Supply
•Compression
Suburban Boston 2006
2005 2006 Change
Occupancy 60% 62% 3.9%
Average Rate $96.13 $100.94 5.0%
RevPAR $57.39 $62.58 9.0%
Suburban Boston Projections 2006
Source: Pinnacle Advisory Group
•Limited New Supply
•Slightly less Compression
•Improved Economy
•Conversions
Suburban Boston 2007
2006 2007 Change
Occupancy 62% 63% 1.6%
Average Rate $100.94 $105.98 5.0%
RevPAR $62.58 $66.77 6.7%
Suburban Boston Projections 2007
Source: Pinnacle Advisory Group
BOSTON CAMBRIDGE LODGING MARKET
Boston / Cambridge Occupancy 1989-2005
Source: Pinnacle Advisory Group
79%
72%
70%
74%75%
76%
78%79%
78%
78%
77%
75%
72%
68%
74%
72%
69%
60%
65%
70%
75%
80%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Boston / Cambridge ADR 1989-2005
Source: Pinnacle Advisory Group
$199.74
$181.34
$165.04$154.01
$165.98$175.20
$190.28
$176.65
$161.15
$143.58$132.93
$125.03$117.35$113.92
$115.96$118.72
$114.11
$-
$25.00
$50.00
$75.00
$100.00
$125.00
$150.00
$175.00
$200.00
$225.00
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Boston / Cambridge RevPAR 1989-2005
Source: Pinnacle Advisory Group
$156.80
$125.85$119.16
$108.12
$122.66$131.22
$82.16$87.85
$78.85 $82.02$88.01
$96.27$103.69
$111.99
$127.31
$137.79$145.37
$-
$25.00
$50.00
$75.00
$100.00
$125.00
$150.00
$175.00
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Boston / Cambridge Supply and Demand 1989-2005
Source: Pinnacle Advisory Group
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Supply
Demand
Boston / Cambridge Occupancy YTD May 2004-2006
Source: Pinnacle Advisory Group
68.3% 68.6%72.6%
40.0%
45.0%
50.0%
55.0%
60.0%
65.0%
70.0%
75.0%
2004 2005 2006
Boston / Cambridge ADR YTD May 2004-2006
Source: Pinnacle Advisory Group
$146.66$149.04
$163.36
$135.00
$140.00
$145.00
$150.00
$155.00
$160.00
$165.00
2003 2004 2005
Boston / Cambridge RevPAR YTD May 2004-2006
Source: Pinnacle Advisory Group
$112.06
$101.78
$131.06
$90.00
$95.00
$100.00
$105.00
$110.00
$115.00
$120.00
$125.00
$130.00
$135.00
2004 2005 2006
Boston / Cambridge Change In RevPAR 1996 – YTD May 2006
Source: Pinnacle Advisory Group
8.0%
14.4%
8.7%
2.6%
9.7%
-18.8%
-6.3%
-14.9%
14.5%
5.9%
17.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006YTDMAY
Boston / Cambridge Change In RevPAR By Market Area 2005
Source: Pinnacle Advisory Group
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
Back Bay Downtown Other Cambridge
Occupancy
Avg Rate
RevPAR
Boston / Cambridge Change In Performance By Market Area YTD May 2006
Source: Pinnacle Advisory Group
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Back Bay Downtown Other Cambridge
Occupancy
Avg Rate
RevPAR
•Westin Headquarters Hotel – Waterfront – 790 Rooms – June•Intercontinental – Downtown - 424-rooms - November
Boston / Cambridge New Supply 2006
Source: Pinnacle Advisory Group
•Charles Street Jail – Beacon Hill – 308 Rooms - May •Renaissance – 477 Rooms – Waterfront District – December
Boston / Cambridge New Supply 2007
Source: Pinnacle Advisory Group
Continued Strong Corporate Growth Anticipated
2006 Record Convention Year
2007 Slightly behind 2006
Winter Advertising Campaign will help off-season Leisure
Boston / Cambridge Demand Factors
Source: Pinnacle Advisory Group
Strong increases in other national markets
Momentum from 2006 Likely to Carry-Over to 2007
Luxury Orientation of New Product Will Help
Large Citywides and Continued Strong demand will Help Compression
Boston / Cambridge Average Rates
Source: Pinnacle Advisory Group
• Several Regional Executives • 5-7% RevPAR Growth
Pinnacle Operator’s Survey 2007 Outlook
Source: Pinnacle Advisory Group
2005 2006 Change
Occupancy 75% 78% 4.1%
Average Rate $175.20 $192.72 10%
RevPAR $131.22 $150.32 14.6%
Boston Cambridge Projections 2006
Source: Pinnacle Advisory Group
2006 2007 Change
Occupancy 78% 77% -1.2%
Average Rate $192.72 $204.94 6.3%
RevPAR $150.32 $157.94 5.1%
Boston Cambridge Projections 2006
Source: Pinnacle Advisory Group
164 Canal Street Boston, MA 02114 ~ 617/722-9916238 South State Street, Newtown, PA 18940 ~ 215/579-1804
3418 Norfolk Street, Pompano Beach, FL 33062 ~ 954/786-2019
www.pinnacle-advisory.com
PINNACLE ADVISORY GROUP
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