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©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
US Lodging Real Estate Cycle
Early Operating Recovery
Early Transaction Recovery
Main Street Debt Availability
Full Operating Recovery
Conversions/Renovations
10 11 12 13 14 15 16 17 18 19
New Project Announcements
Early Wall St. Activity
Peak Transaction Activity
Peak New Hotel Openings
Peak Earnings
Full Wall St. Participation
Cycle PeakLending
Development
Earnings
Transactions
X
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
Rooms (000s)
Projs 2,753 3,020
373335 341
383421
3,122 2,757 3,311
Under Construction Starts in Next 12 Mos Early Planning Forecast
460
535
Prior Peak 2Q08: 785K Rooms, 5,883 Projects
US Construction Pipeline by Projects and RoomsFall 2014
10 11 12 13 2Q140
120
240
360
480
600
373335 341
383421
Year End 14 Year End 15 Year End 16
585
515
455
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
Fall 2014
Q211 Q212 Q213 Q2140
200
400
600
800
1000
1200
At 2Q 2014 970 Projs
126,380 Rms
US Under Construction Trends by Projects: Quarter over Quarter
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
US Construction Start Trends by Projects: Quarter over Quarter Fall 2014
Q211 Q212 Q213 Q2140
100
200
300
400
500
600
At 2Q 2014 259 Projs32,515 Rms
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
Fall 2014
Q211 Q212 Q213 Q2140
200
400
600
800
1000
1200
At 2Q 2014 396 Projs49,490 Rms
US New Project Announcement Trends by Projects:Quarter over Quarter
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
Fall 2014
Q211 Q212 Q213 Q2140
400
800
1200
1600
2000
2400
At 2Q 2014 913 Projs159,574 Rms
US Announced Conversion & Renovation Trends by Projects: Quarter over Quarter
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
US Construction Pipeline by Project Stage: Quarter over Quarter
Q4 13 1Q 14 2Q 14
Proj Rms Proj Rms Proj Rms
Under Construction 793 101,735 885 114,337 970 126,380
Starts Next 12 Month 1,156 141,140 1,327 161,748 1,354 161,204
Early Planning 1,071 140,083 1,014 131,150 987 133,803
Total Pipeline 3,020 382,958 3,226 407,235 3,311 421,387
Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
2%
7%
25%
28%6%2%
4%
27%
Luxury
Upper Upscale
Upscale
Upper Midscale
Midscale
Economy
Casino
Unbranded
Projs Rooms
31 10,195
133 28,824
793 104,543
1,205 116,720
329 24,274
92 7,565
44 15,349
684 113,917
Total 3,311 421,387
US Construction Pipeline by Chain Scale: with an Unbranded Breakout Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
5%
10%
35%35%
9%
3%4%
Luxury
Upper Upscale
Upscale
Upper Midscale
Midscale
Economy
Casino
Unbranded
Projs Rooms
84 20,374
187 42,237
1,048 146,732
1,386 146,036
440 39,924
122 10,735
44 15,349
Included Included
Total 3,311 421,387
US Construction Pipeline by Chain Scale: with Unbranded Included Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
* = Pipeline of rooms as a percentage of current Census Projs Rms *
New York 177 30,622 28.5
Houston 115 13,306 18.3
Washington DC 81 13,298 12.2
Los Angeles 58 11,642 12.0
Miami 58 11,342 22.8
US Construction Pipeline Total by Rooms:Top 10 Markets Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
US Construction Pipeline Total by Rooms:Top 10 Markets
* = Pipeline of rooms as a percentage of current Census Projs Rms *
Chicago 43 9,018 8.2
Austin 52 8,216 26.5
San Diego 34 8,011 13.0
Boston 49 7,572 14.3
Seattle 39 7,264 17.4
Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
Actual Forecast * = growth rate
2012
2013
2014
2015
2016
Rooms
97,540
44,584
84,844
70,249
53,076
LE’s US Forecast for New Hotel Openings *1.9%
*1.7%
*1.3 – 1.4%
*1.1%
*0.9%
Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
Forecast for New Hotel Openings: by Chain Scale as of 2Q13 * = growth rate 2014 2015 2016
(IncludesIndependents) Projs Rms * Projs Rms * Projs Rms *
Luxury 14 3,921 2.1 24 4,721 2.5 13 2,755 1.4
Upper Upscale
26 5,151 0.8 37 5,665 0.8 42 8,876 1.3
Upscale 201 25,703 3.6 249 31,252 4.3 253 34,019 4.5
Upper Midscale
262 24,821 2.1 331 31,334 2.6 389 37,926 3.1
Midscale 82 5,600 0.9 105 7,505 1.2 131 9,463 1.5
Economy 33 2,485 0.2 34 2,722 0.2 36 2,982 0.2
Casino 12 2,568 1.2 5 1,645 0.7 7 1,519 0.7
LE’s US Forecast for New Hotel Openings:By Chain Scale Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
Under Construction Planning Total Pipeline
Proj Rms Proj Rms Proj Rms
United States
970 126,380 2,341 295,007 3,311 421,387
Other Americas
463 76,684 497 71,742 960 148,426
EMEA 681 143,826 645 110,410 1,326 254,236
Asia Pac 2,791 567,409 883 189,798 3,674 757,207
Global 4,905 914,299 4,366 666,957 9,271 1,581,256
Global Construction Pipeline Total:By Region Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
Projs Rms
United Kingdom 202 28,665
Russia 109 22,497
Germany 98 18,343
Turkey 67 11,617
Spain 37 5,318
Europe Construction Pipeline Total by Rooms:Top 5 Countries Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
Projs Rms
China 2,409 521,452
India 370 54,815
Indonesia 338 52,495
Japan 147 28,172
Malaysia 67 17,219
Asia Pacific Construction Pipeline Total by Rooms:Top 5 Countries Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
08 09 10 11 12 13 2Q YTD >200 Rooms 72 47 90 128 112 139 75 <200 Rooms 829 381 425 560 469 819 244 Total Trans 901 428 515 688 581 958 319
0
50
100
150
200
250
300
121K
197K
72K
107K
152K
77K
Ave
rage
Sel
ling
Pric
e P
er R
oom
(00
0s)
US Transactions with a Reported Selling Price
211K
76K
Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
US Lodging Real Estate Total Investment by Dollars1
As Sellers As Buyers
$ Millions 2012 2013 2Q YTD 2012 2013 2Q YTD
Privately Held Companies
Equity Funds 2,908 5,273 2,254 2,876 4,497 1,770
Hotel Companies 2,257 5,253 2,235 2,180 2,929 1,332
Individual Owners 1,962 1,483 691 1,010 1,254 888
Publicly Traded Companies
REITs 968 2,993 753 3,422 5,024 2,722
Hotel Companies 1,060 1,052 878 15 1,058 405
Other Entities 731 1,127 707 384 2,420 402
Total Dollar Volume 9,886 17,182 7,519 9,886 17,182 7,519
1 For Transactions with a reported Selling Price
Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
US Transactions By Chain Scale1 by Number of Hotels Sold
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
2010 2011 2012 2013 2Q YTD1Includes Like Kind Independents
515
688
581
958
319
Fall 2014
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com
Forecast
• The overall US Market will continue to remain robust in several areas including Transactions.
• The Construction Pipeline will continue to grow but it will be dominated by projects with less than 200 rooms in the Upscale and Upper Midscale Chain Scales.
• Highest rate markets and gateway cities will continue to draw eager developers looking for land or adaptive reuse projects.
• Availability of debt will continue to improve.
• Profits will continue to rise as we have a good four-year run in front of us.
©2014 Lodging Econometrics, Inc. | www.lodgingeconometrics.com