global lodging industry overview
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GLOBAL LODGING INDUSTRY OVERVIEW
Randy Smith
SMITH TRAVEL RESEARCH
65.766.4
60.0
65.0
70.0
2005 2006
Global OccupancySeptember Year-To-Date
+1.1 %
100.3
108.1
90.00
95.00
100.00
105.00
110.00
2005 2006
Global ADRSeptember Year-To-Date
+7.8 %
90000000
100000000
110000000
120000000
130000000
140000000
150000000
1989 1991 1993 1995 1997 1999 2001 2003 2005
Seas Adj
Total U.S.Monthly Room Supply – Seasonally AdjustedJanuary 1989 to September 2006
CAGR – 1.97%
CAGR 3.5%
CAGR 0.5%
4.5 Million Rooms
3.1 Million Rooms
-0.5
0.0
0.5
1.0
1.5
2.0
2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 J F M A M J J A S
Total United StatesRoom Supply Percent ChangeJan 2002 – September 2006
50000000
60000000
70000000
80000000
90000000
1989 1991 1993 1995 1997 1999 2001 2003 2005
Seas Adj
Total U.S.Monthly Room Demand – Seasonally AdjustedJanuary 1989 to September 2006
Peak CAGR – 2.7%
CAGR – 2.03%
2.6%
-10
-5
0
5
10
2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 J F M A M J J A S
Total United StatesRoom Demand Percent ChangeJan 2002 – September 2006
38 Consecutive Months of Demand Growth
-6
-4
-2
0
2
4
6
1989 1991 1993 1995 1997 1999 2001 2003 2005
Supply % Change
Demand % Change
Total United StatesRoom Supply/Demand Percent ChangeTwelve Month Moving Average – 1989 to September 2006
2.0%
0.4%
5.1%
0.6%
3.8%
4.0% 4.2%
-20
-15
-10
-5
0
5
10
15
2001 2002 2003 2004 2005 2006
Supply % Change
Demand % Change
Total United StatesRoom Supply/Demand Percent ChangeMonthly Year-Over-Year 2001 – September 2006
58
60
62
64
66
1989 1991 1993 1995 1997 1999 2001 2003 2005
Total United StatesOccupancy PercentTwelve Month Moving Average – 1989 to September 2006
61.9 %December 1991
1995 & 1996
64.9%
63.3% Feb 2001
58.5%
Aug 02 & May 03
Sep 0663.6%
-10
-5
0
5
10
2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 J F M A M J J A S
Total United StatesOccupancy Percent ChangeJan 2002 – September 2006
50
60
70
80
90
100
1989 1991 1993 1995 1997 1999 2001 2003 2005
Total United StatesAverage Daily RateTwelve Month Moving Average – 1989 to September 2006
$54.94Jan 1989
$86.33
June2001
$95.64Sep 06
Peak CAGR – 4.4%
Long Term CAGR – 3.1%
-10
-5
0
5
10
2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 J F M A M J J A S
Total United StatesRoom Rate Percent ChangeJan 2002 – September 2006
-8
-6
-4
-2
0
2
4
6
8
1989 1991 1993 1995 1997 1999 2001 2003 2005
Occ % Chg
ADR % Chg
Total United StatesOccupancy/ADR Percent ChangeTwelve Month Moving Average – 1989 to September 2006
DivergenceDivergence
1.6%
6.7%
-6
-4
-2
0
2
4
6
8
1989 1991 1993 1995 1997 1999 2001 2003 2005
ADR % Change
Demand % Change
Total United StatesRoom Demand / ADR Percent ChangeTwelve Month Moving Average – 1989 to September 2006
2.0%
6.3%
-15
-10
-5
0
5
10
15
1989 1991 1993 1995 1997 1999 2001 2003 2005
RevPAR % Chg
Total United StatesRevPAR Percent ChangeTwelve Month Moving Average – 1989 to September 2006
-2.6%Nov 91
6.5%
Feb 97
Feb 01 6.5%
-10.6%Jun 02
8.4%
0.4
6.8
5.1
2.9 2.7
8.0
0.2
1.11.5
7.9
0
5
10
Supply Demand Occupancy ADR RevPAR
2005 2006
Total United StatesKey Performance Indicators Percent ChangeSeptember YTD
60
65
70
75
80
Last Year
This Year
Total United StatesOccupancy Percent 28-Day Moving AverageAugust 5, 2006 – October 21, 2006
85
90
95
100
Last Year
This Year
Total United StatesADR 28-Day Moving AverageAugust 5, 2006 – October 21, 2006
55
60
65
70
75
Last Year
This Year
Total United StatesRevPAR 28-Day Moving AverageAugust 5, 2006 – October 21, 2006
2.4
1.1 1.5
-2.9
1.9
-0.5
4.4
1.6 2.0
-1.2
3.7
0.3
-5
0
5
10
Luxury UpperUpscale
Upscale Mid w F&B Mid wo F&B Economy
SupplyDemand
Chain ScalesSupply/Demand Percent ChangeSeptember 2006 YTD
9.0
7.1
8.98.4
5.6
2.0
0.90.4
1.8
0.6
1.8
6.2
0
5
10
Luxury UpperUpscale
Upscale Mid w F&B Mid wo F&B Economy
OccupancyADR
Chain ScalesOccupancy/ADR Percent ChangeSeptember 2006 YTD
-0.4
1.00.3
1.4
-1.8
1.10.6
2.11.5
3.5
-1.6
2.6
-5
0
5
10
Urban Suburban Airport Interstate Resort Small Metro
SupplyDemand
Location SegmentsSupply/Demand Percent ChangeSeptember 2006 YTD
1.5
8.7
7.5
9.7
5.0
1.0 1.32.1
0.90.1
4.4
6.9
0
5
10
15
Urban Suburban Airport Interstate Resort Small Metro
OccupancyADR
Location SegmentsOccupancy/ADR Percent ChangeSeptember 2006 YTD
-4.0
-2.9
-0.5
-0.4
-0.4
-0.3
-0.1
-0.1
-0.1
0.2
0.2
0.3
0.4
0.5
1.6
1.9
2.0
-6 -4 -2 0 2
Oahu Island, HI
Miami-Hialeah, FL
Los Angeles-Long Beach, CA
Orlando, FL
New York, NY
Philadelphia, PA-NJ
San Francisco/San Mateo, CA
San Diego, CA
Atlanta, GA
Phoenix, AZ
Chicago, IL
Top 25 Markets
Total United States
All Other Markets
Dallas, TX
Boston, MA
Washington, DC-MD-VA
Key 15 MarketsRoom Supply Percent ChangeSeptember 2006 YTD Year over Year
-4.0
-2.2
-1.1
-1.0
0.0
1.0
1.3
1.5
1.6
1.7
2.2
3.3
5.6
5.8
6.7
-4.0
-4.3
-10 -5 0 5 10
Miami-Hialeah, FL
Oahu Island, HI
Orlando, FL
Washington, DC-MD-VA
Philadelphia, PA-NJ
New York, NY
Los Angeles-Long Beach, CA
Top 25 Markets
San Diego, CA
Total United States
San Francisco/San Mateo, CA
All Other Markets
Phoenix, AZ
Atlanta, GA
Boston, MA
Chicago, IL
Dallas, TX
Key 15 MarketsRoom Demand Percent ChangeSeptember 2006 YTD Year over Year
-1.4
-0.7
-0.6
0.5
0.7
1.0
1.3
1.4
1.7
2.0
3.4
5.0
5.6
-1.4
-3.6
-4.2
3.6
-5 0 5 10
Washington, DC-MD-VA
Orlando, FL
Oahu Island, HI
Miami-Hialeah, FL
Philadelphia, PA-NJ
New York, NY
Los Angeles-Long Beach, CA
Top 25 Markets
Total United States
All Other Markets
San Diego, CA
San Francisco/San Mateo, CA
Phoenix, AZ
Atlanta, GA
Boston, MA
Dallas, TX
Chicago, IL
Key 15 MarketsOccupancy Percent ChangeSeptember 2006 YTD Year over Year
63.1
65.2
66.4
68.5
68.5
70.0
72.3
76.4
82.2
84.7
73.9
70.2
70.4
69.2
62.8
76.7
70.4
50 60 70 80 90
All Other Markets
Dallas, TX
Total United States
Atlanta, GA
Chicago, IL
Boston, MA
Phoenix, AZ
Orlando, FL
Top 25 Markets
Philadelphia, PA-NJ
Washington, DC-MD-VA
Miami-Hialeah, FL
San Francisco/San Mateo, CA
San Diego, CA
Los Angeles-Long Beach, CA
New York, NY
Oahu Island, HI
Key 15 MarketsOccupancy PercentSeptember 2006 YTD
6.6
6.8
7.6
7.6
9.2
9.2
9.2
9.4
9.5
9.9
10.3
10.5
11.2
12.3
13.2
9.4
5.3
0 5 10 15
All Other Markets
San Diego, CA
Total United States
Philadelphia, PA-NJ
Washington, DC-MD-VA
Top 25 Markets
Los Angeles-Long Beach, CA
Boston, MA
San Francisco/San Mateo, CA
Orlando, FL
Phoenix, AZ
Miami-Hialeah, FL
Atlanta, GA
Dallas, TX
Chicago, IL
New York, NY
Oahu Island, HI
Key 15 MarketsADR Percent ChangeSeptember 2006 YTD Year over Year
5.4
6.6
6.8
7.9
8.1
8.3
9.8
9.9
11.3
11.6
11.7
11.7
13.1
14.0
16.0
17.4
3.1
0 5 10 15 20
Washington, DC-MD-VA
Orlando, FL
All Other Markets
Philadelphia, PA-NJ
Total United States
San Diego, CA
Miami-Hialeah, FL
Los Angeles-Long Beach, CA
Top 25 Markets
San Francisco/San Mateo, CA
Oahu Island, HI
New York, NY
Phoenix, AZ
Boston, MA
Atlanta, GA
Dallas, TX
Chicago, IL
Key 15 MarketsRevPAR Percent ChangeSeptember 2006 YTD Year over Year
84.89
85.90
96.90
100.66
109.85
112.32
113.79
117.40
119.34
132.42
136.19
139.92
140.36
141.80
155.19
221.21
86.36
$50 $90 $130 $170 $210
Dallas, TX
Atlanta, GA
All Other Markets
Total United States
Orlando, FL
Philadelphia, PA-NJ
Phoenix, AZ
Los Angeles-Long Beach, CA
Top 25 Markets
Chicago, IL
San Diego, CA
San Francisco/San Mateo, CA
Boston, MA
Washington, DC-MD-VA
Miami-Hialeah, FL
Oahu Island, HI
New York, NY
Top 15 MarketsADR September 2006 YTD
-2.3
-2.3
3.7
1.1
-2.4
0.2
0.8
11.7
15.1
19.7
3.3
9.9
-5 0 5 10 15 20
Auckland
Beijing
Hong Kong SAR
Singapore
Sydney
TokyoADR
Occupancy
Asia Pacific MarketsOccupancy / ADR Percent ChangeAugust 2006 YTD
-1.5
9.1
19.3
21.1
0.8
10.1
-5 0 5 10 15 20 25
Auckland
Beijing
Hong Kong SAR
Singapore
Sydney
Tokyo
Asia Pacific MarketsRevPAR Percent Change in Local CurrencyAugust 2006 YTD
0.7
3.9
0
13
6.4
29.8
8.2
-1.3
7.4
2.8
-5 0 5 10 15 20 25 30
Buenos Aires
Quito
Rio de Janeiro
Santiago
Sao Paulo
ADR
Occupancy
South America MarketsOccupancy / ADR Percent ChangeAugust 2006 YTD
12.5
-1.4
21.4
9.4
-5 0 5 10 15 20 25 30
Buenos Aires
Quito
Rio de Janeiro
Santiago
Sao Paulo
South America MarketsRevPAR Percent Change in Local CurrencyAugust 2006 YTD
1.4
-1.2
-1.8
6.2
-8.4
10.7
16.7
20
17.1
11.2
25.7
13.7
-10 -5 0 5 10 15 20 25 30
Cairo
Doha
Dubai
Johannesburg
Muscat
Riyadh
ADR
Occupancy
Middle East & Africa MarketsOccupancy / ADR Percent ChangeAugust 2006 YTD
18.3
18.5
14.9
18.1
15.2
25.9
0 5 10 15 20 25 30
Cairo
Doha
Dubai
Johannesburg
Muscat
Riyadh
Middle East & Africa MarketsRevPAR Percent Change in Local CurrencyAugust 2006 YTD
4.7
5.3
6.6
9
2.7
5.4
5.9
3.1
10.8
16.2
3.5
7.2
6.5
4.7
2.1
8.7
0 5 10 15 20
Amsterdam
Berlin
Brussels
London
Madrid
Paris
Rome
Vienna
ADR
Occupancy
Europe MarketsOccupancy / ADR Percent ChangeAugust 2006 YTD
16.1
22.4
10.3
16.8
9.3
10.3
8.1
12
0 5 10 15 20 25
Amsterdam
Berlin
Brussels
London
Madrid
Paris
Rome
Vienna
Europe MarketsRevPAR Percent Change in Local CurrencyAugust 2006 YTD
-10
-8
-6
-4
-2
0
2
4
6
8
2002 2003 2004 2005 2006
Supply % Change
Demand % Change
London, EnglandRoom Supply/Demand Percent ChangeTwelve Month Moving Average – 2002 to August 2006
7.0%
1.5%
-15
-10
-5
0
5
10
2002 2003 2004 2005 2006
Occ % Change
ADR % Change
London, EnglandOccupancy, ADR Percent ChangeTwelve Month Moving Average – 2002 to August 2006
6.7%
5.4%
65
70
75
80
85
2001 2002 2003 2004 2005 2006
London, EnglandOccupancy PercentTwelve Month Moving Average – 2001 to August 2006
-25
-20
-15
-10
-5
0
5
10
15
20
25
2001 2002 2003 2004 2005 2006
Supply % Change
Demand % Change
London, EnglandRoom Supply/Demand Percent ChangeMonthly Year-Over-Year 2001 – September 2006
-35
-25
-15
-5
5
15
25
2001 2002 2003 2004 2005 2006
ADR % Chg
Occupancy % Chg
London, EnglandOccupancy / ADR Percent ChangeMonthly Year-Over-Year 2001 – September 2006
Total United StatesActive Development Pipeline - RoomsChange From Last Year
Source: STR / TWR / Dodge Construction Pipeline
Phase Sept 2006 Sept 2005 Difference % Change
In Construction 163,434 95,967 67,467 70.3%
Final Planning 58,010 18,226 39,784 218.3%
Planning 312,832 168,687 144,145 85.5%
Active Pipeline 534,276 282,880 251,396 88.3%
Pre-Planning 79,104 56,489 22,615 40.0%
Total 613,380 339,369 274,011 80.7%
288303
283311
338
464
534
200
300
400
500
600
Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06
Th
ou
sa
nd
s
Rooms
Total United StatesActive PipelineFirst Quarter 2005 to Third Quarter 2006
11.9% of Existing Supply
13
54
87
26
119
9
226
0
50
100
150
200
250
300
Luxury UpperUpscale
Upscale Mid withF&B
Mid W/OF&B
Economy Unaff
Th
ou
san
ds
Rooms
Total United StatesActive Pipeline by Chain Scale SegmentSeptember 2006
17.2
9.9
21.6
4.8
17.5
1.2
14.9
0.0
5.0
10.0
15.0
20.0
25.0
Luxury UpperUpscale
Upscale Mid withF&B
Mid W/OF&B
Economy Unaff
Percent
Total United StatesActive Pipeline by Chain Scale Segment – Percent of Existing SupplySeptember 2006
1.6 1.7 1.71.6
0.2
0.6
1.1
0.6
4.2
3.1
0.3
1.4
0
1
2
3
4
5
2002 2003 2004 2005 2006P 2007P
Supply % Chg
Demand % Chg
Total United StatesSupply/Demand Percent Change2002 – 2007P
2.9
3.6
0.3
1.1
0.1
-1.2
-2
-1
0
1
2
3
4
2002 2003 2004 2005 2006P 2007P
Total United StatesOccupancy Percent Change2002 – 2007P
59 59.2
63.1
61.3
63.963.8
55
60
65
70
2002 2003 2004 2005 2006P 2007P
Total United StatesOccupancy Percent2002 – 2007P
Total United StatesNominal Room Rates2000 – 2007P
85.22 83.9986.24
90.90
96.99
103.29
82.8682.75
75
85
95
105
115
2000 2001 2002 2003 2004 2005 2006P 2007P
Source: STR
4.1
5.4
-1.5
6.56.8
0.1
-2.0
0.0
2.0
4.0
6.0
8.0
2002 2003 2004 2005 2006P 2007P
Total United StatesADR Percent Change2002 – 2007P
8.57.9
6.77.8
0.4
-2.7
-5.0
0.0
5.0
10.0
2002 2003 2004 2005 2006P 2007P
Total United StatesRevPAR Percent Change2002 – 2006P
Lodging Industry Issues
Source: STR
Global Issues
Terrorism
Bird Flu (other outbreaks)
Natural Disasters
Currency Fluctuations
Domestic Unrest
Wars
IMPACT - Varies
Lodging Industry Issues
Source: STR
Supply/Demand/Pricing
Supply Growth Remains Benign – Condo Hotels Done
Solid Demand Growth – Degrees of Good, Some Not So Good
Changing Demand – Experience Travel, Baby Boomers
Occupancy Growth Slows – Varies Widely by Market
Aggressive Pricing – Could Double CPI, Control Internet
Higher Industry Profits – Slow Profitability Improvement
IMPACT – Higher Revenues
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