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CBRE HOTELS

The World’s Leading Hotel Experts.

CBRE HOTELSThe World’s Leading Hotel Experts.

CURRENT STATE OF AUSTIN LODGING MARKETPRESENTED BY JEFF BINFORD

HORIZONS REPORT | AUSTIN HOTEL & LODGING ASSOCIATION| 2

“Trying to predict the direction of the market over one year, or even two years is impossible”

- Peter Lynch, Magellan Fund Manager – Fidelity Investments

”Hotel markets are as much impossible as mutual funds in trying to predict occupancies,

rates and RevPAR”- Me

QUOTATIONS

PRESENTATIONOUTLINE

01ECONOMIC OUTLOOK

0203AUSTIN LODGING MARKET

04SUBMARKET PERFORMANCE

05AIRBNB UPDATE

C B R E © 2 0 1 7 A l l R i g h t s R e s e r v e d . A l l i n f o r m a t i o n i n c l u d e d i n t h i s l e t t e r / p r o p o s a l p e r t a i n i n g t o C B R E , I n c . — i n c l u d i n g b u t n o t l i m i t e d t o i t s o p e r a t i o n s , e m p l o y e e s , t e c h n o l o g y a n d c l i e n t s — i s p r o p r i e t a r y a n d c o n f i d e n t i a l a n d s u p p l i e d w i t h t h e u n d e r s t a n d i n g t h a t s u c h i n f o r m a t i o n w i l l b e h e l d i n c o n f i d e n c e a n d n o t d i s c l o s e d t o a n y t h i r d p a r t y w i t h o u t C B R E ’ s p r i o r w r i t t e n c o n s e n t . T h i s l e t t e r / p r o p o s a l i s i n t e n d e d s o l e l y a s a p r e l i m i n a r y e x p r e s s i o n o f g e n e r a l i n t e n t i o n s , i s f o r d i s c u s s i o n p u r p o s e s o n l y , a n d d o e s n o t c r e a t e a n y a g r e e m e n t o r o b l i g a t i o n b y C B R E t o n e g o t i a t e o r c o n t i n u e n e g o t i a t i o n s . C B R E s h a l l h a v e n o c o n t r a c t u a l o b l i g a t i o n w i t h r e s p e c t t o t h e m a t t e r s r e f e r r e d t o h e r e i n u n l e s s a n d u n t i l a d e f i n i t i v e , f u l l y - e x e c u t e d a g r e e m e n t h a s b e e n d e l i v e r e d b y t h e p a r t i e s . P r i o r t o d e l i v e r y o f a d e f i n i t i v e e x e c u t e d a g r e e m e n t , a n d w i t h o u t a n y l i a b i l i t y t o t h e o t h e r p a r t y , e i t h e r p a r t y m a y ( 1 ) p r o p o s e d i f f e r e n t t e r m s f r o m t h o s e s u m m a r i z e d h e r e i n , ( 2 ) e n t e r i n t o n e g o t i a t i o n s w i t h o t h e r p a r t i e s a n d / o r ( 3 ) u n i l a t e r a l l y t e r m i n a t e a l l n e g o t i a t i o n s w i t h t h e o t h e r p a r t y h e r e t o .

NATIONAL/STATE LODGING TRENDS

01ECONOMIC OUTLOOK


What Could End the Current Cycle?

1. The Economy

2. Over Building

3. Unpredictable Demand Shock

4. Oil/Energy Prices

5. Natural Disasters – Hurricanes, Fires, Earthquakes

ECONOMIC OUTLOOK


ECONOMIC OUTLOOK

Employment Personal Income GDP CPI (Inflation)

2017 1.6% 1.0% 2.3% 2.1%

2018 1.5% 1.5% 2.7% 2.6%

2019 1.0% 2.3% 1.7% 1.9%

2020 -0.3% 1.9% 0.3% 1.4%

2021 0.2% 1.4% 2.2% 1.5%

2022 1.2% 2.0% 2.7% 1.9%

Source: CBRE Economic Advisors, Moody’s Analytics, Q2 2018

UNITED STATES: ECONOMIC OUTLOOK

ECONOMIC OUTLOOK


ECONOMIC OUTLOOKAUSTIN: ECONOMIC OUTLOOK

Employment Personal Income GMP CPI (Inflation)

2017 3.2% 2.1% 4.7% 2.1%

2018 3.4% 2.8% 4.2% 2.6%

2019 2.2% 4.4% 4.4% 1.9%

2020 1.4% 3.5% 2.5% 1.4%

2021 1.6% 3.1% 4.5% 1.5%

2022 2.5% 4.2% 4.9% 1.9%

Source: CBRE Economic Advisors, Moody’s Analytics, Q2 2018

ECONOMIC OUTLOOK


ECONOMIC OUTLOOK COMPARISON

Employment Personal Income

GDP CPI (Inflation)

2017 1.6% 3.2% 1.0% 2.1% 2.3% 4.7% 2.1% 2.1%

2018 1.5% 3.4% 1.5% 2.8% 2.7% 4.2% 2.6% 2.6%

2019 1.0% 2.2% 2.3% 4.4% 1.7% 4.4% 1.9% 1.9%

2020 -0.3% 1.4% 1.9% 3.5% 0.3% 2.5% 1.4% 1.4%

2021 0.2% 1.6% 1.4% 3.1% 2.2% 4.5% 1.5% 1.5%

2022 1.2% 2.5% 2.0% 4.2% 2.7% 4.9% 1.9% 1.9%

Source: CBRE Econometric Advisors & Moody’s Analytics, Q2 2018

ECONOMIC OUTLOOK

02NATIONAL/STATE LODGING TRENDS


THE OUTLOOK FOR THE DRIVERS THAT ARE MOST IMPORTANT TO HOTELS REMAINS FAVORABLE E DRIVERS THAT ARE MOST IMPORTANT TO HOTELS REMAINS FAVORABLE

-2.7%

2.0%

-1.9%

-8.2%

-5.4%

-0.5%

1.3%

3.9%

1.7%

3.9%

2.7%2.5%

-1.5%

2.9%

0.8%

4.6%

2.7%

1.9%

0.5%0.1%

2.8%

0.8%

3.1%

4.0%

-0.9%

4.6%5.2%

2.0%

3.2%

2.7%1.6%

0.5%0.6%

2.2% 2.8%1.8%

1.2%

3.1%3.2%2.9%

2.2%

3.0%3.4%3.1%

2.7%2.0%

1.6%

0.9%0.0%

0.4%1.6%

2.6%

-10

-8

-6

-4

-2

0

2

4

6

8

10

I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(GOVERNMENT) Government consumption expenditures and grossinvestmentTRADE (Net exports of goods and services)

BUSINESS (Gross private domestic investment)

CONSUMERS (Personal consumption expenditures)

Lodging Demand

Source: BEA, Moody’s Analytics, CBRE Hotels Americas’ Research Hotel Horizons, STR, May 2018



Leading Economic IndicatorsPercent Change In the Last 6 Months

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

Leading Economic Indicators (% change in the last 6 months) U.S. Hotel Demand

6 to 8 month lag

Economic indicators trended

up in 2017

Source: The Conference Board, CBRE Hotels’ Americas Research, STR, May 2018



Well in Excess of What Historical Trends Would Suggest

More people renting rooms

3

3.5

4

4.5

5

5.5

Mar

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-88

Jan-

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Nov

-89

Apr

-90

Sep

-90

Feb-

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l-91

Dec

-91

May

-92

Oct

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Mar

-93

Aug

-93

Jan-

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Nov

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Apr

-95

Sep

-95

Feb-

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Dec

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May

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Dec

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n-14

Nov

-14

Apr

-15

Sep

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Feb-

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Dec

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May

-17

Rooms sold including Airbnb Rooms sold Linear (Rooms sold)

Source: STR, Airdna, U.S. Census, CBRE Hotels’ Americas Research, Q4 2017.

RATIO OF ANNUAL ROOMS SOLD TO WORKING-AGE POPULATION OF THE U.S.



(2.0)%(1.0)%

0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%

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34 markets where the average supply growth over the past year was greater than 2%

Source: CBRE Hotels’ Americas Research; STR, Q4 2017.

SUPPLY CHANGE 2016-2017



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1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

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Supply Change 2018 - Forecast

42 markets where the average supply growth is forecast to be greater than 2%.

Source: CBRE Hotels’ Americas Research Q4 2017



NUMBER OF ROOMS UNDER CONSTRUCTION

Pipeline is Slowing

194,455 190,260

0

50,000

100,000

150,000

200,000

250,000

2014 2015 2016 2017 2018Source: STR, July 2018.



Dallas Summary

$90.53

$93.66

$99.13

$103.57$105.93

$109.75

$112.52

$90.00

$95.00

$100.00

$105.00

$110.00

$115.00

2013 2014 2015 2016 2017 2018 2019

ADR

77,704 77,891 78,78280,493

83,448

88,087

93,825

75,00077,00079,00081,00083,00085,00087,00089,00091,00093,00095,000

2013 2014 2015 2016 2017 2018 2019

Supply

$58.22

$63.51

$69.87

$73.89 $73.67$75.72 $76.81

$55.00

$60.00

$65.00

$70.00

$75.00

$80.00

2013 2014 2015 2016 2017 2018 2019

RevPAR

DALLAS LODGING MARKET

64.3%

67.8%

70.5%71.3%

69.5%69.0%

68.3%

62%

63%

64%

65%

66%

67%

68%

69%

70%

71%

72%

2013 2014 2015 2016 2017 2018 2019

Occupancy


Fort Worth Summary

FORT WORTH LODGING MARKET

62.6%

64.3%

66.9%

69.4%69.8%

70.4%

69.1%

62.0%

63.0%

64.0%

65.0%

66.0%

67.0%

68.0%

69.0%

70.0%

71.0%

72.0%

2013 2014 2015 2016 2017 2018 2019

Occupancy

$92.26

$98.80

$102.43$103.89

$105.40

$108.88$111.02

$90.00

$95.00

$100.00

$105.00

$110.00

$115.00

2013 2014 2015 2016 2017 2018 2019

ADR

31,09131,581 31,672 31,721

32,579

33,633

35,912

31,000

32,000

33,000

34,000

35,000

36,000

37,000

2013 2014 2015 2016 2017 2018 2019

Supply

$57.78

$63.56

$68.48

$72.10$73.61

$76.66 $76.69

$55.00

$60.00

$65.00

$70.00

$75.00

$80.00

2013 2014 2015 2016 2017 2018 2019

RevPAR


HOUSTON LODGING MARKET

69.3%

72.0%

68.5%

62.3%

66.7%

65.0% 64.8%

60%

62%

64%

66%

68%

70%

72%

74%

2013 2014 2015 2016 2017 2018 2019

Occupancy

$100.96

$107.14$108.73

$104.65

$107.98 $108.18

$111.13

$95.00

$100.00

$105.00

$110.00

$115.00

$120.00

2013 2014 2015 2016 2017 2018 2019

ADR

75,038 75,97877,716

82,183

86,13189,354

93,568

70,000

75,000

80,000

85,000

90,000

95,000

100,000

105,000

2013 2014 2015 2016 2017 2018 2019

Supply

$70.00

$77.11$74.48

$65.15

$71.97$70.29

$72.01

$60.00

$65.00

$70.00

$75.00

$80.00

$85.00

2013 2014 2015 2016 2017 2018 2019

RevPAR

Houston Summary


San Antonio SummarySUBMARKET PERFORMANCE

SAN ANTONIO LODGING MARKET

63.1%

64.9% 64.8% 64.7%65.0%

65.6% 65.6%

62%

63%

64%

65%

66%

67%

2013 2014 2015 2016 2017 2018 2019

Occupancy

$63.82

$67.18$69.33 $70.21

$72.49

$76.51$78.58

$60.00

$65.00

$70.00

$75.00

$80.00

$85.00

2013 2014 2015 2016 2017 2018 2019

RevPAR

$101.17

$103.57

$106.99$108.50

$111.47

$116.59

$119.82

$100.00

$105.00

$110.00

$115.00

$120.00

$125.00

2013 2014 2015 2016 2017 2018 2019

ADR

44,425 44,632 44,590

45,53146,288

47,176

48,061

42,000

43,000

44,000

45,000

46,000

47,000

48,000

49,000

50,000

2013 2014 2015 2016 2017 2018 2019

Supply

03AUSTIN LODGING MARKET


DEMAND FACTORSScoring Tech Talent• Austin #6 of the top 50 tech markets in U.S.• Total tech occupations now 69,610, a 20.3%

increase 2012 – 2017 • AVG tech occupation wage is $94,954, a

11.9% increase 2012 – 2017• Tech degree from local universities has grown

44.2% from 2012 – 2016• Tech labor now 7 % of Austin’s workforce,

making Austin one of the top Tech-Talent Momentum Markets

Austin Q3 Retail MarketView• Austin’s retail market remains strong• South Congress• 3% unemployment• Downtown boom

AUSTIN LODGING MARKET

• Austin Q3 Office MarketView• Office absorption rebounded in Q3 from a relatively flat

first half of the year, registering 575,000-square-feet of positive space during the quarter.

• Quarterly absorption and dip in vacancy, causes developers to continue to read Austin’s position positively.

• 9.97 M sq. ft. of demand during Q3 2018, a quarter-over-quarter increase of more than 2 million sq. ft.

Austin Q3 Industrial MarketView400K sq. ft. absorption in Q3, 552K sq. ft. newPipeline 1.6M sq. ft. Flex/R&D and Warehouse/Distribution

https://www.cbre.com/research-and-reports/Scoring-Tech-Talent-in-North-America-2018

https://researchgateway.cbre.com/Layouts/PublicReportAccess/Default.aspx?PUBID=dd6fe47c-23a1-45ce-a117-a38d7e240656

https://www.cbre.com/report-download?PUBID=fbe2f57f-e054-4699-a979-3b4dca259737

https://www.cbre.com/report-download?PUBID=901cfeb4-033b-4159-87a0-85d4b82a254b


SUBMARKET COMPARISON YEAR-END 2017All Hotels – Austin Submarket Analysis

Year-End 2017 Compared to Year-End 2016

Occupancy ADR RevPARSubmarket Percent Pt. Change $ Amount % Change $ Amount % Change

Downtown 76.5% 0.0% $220 0.8% $168 0.8%

Northwest Arboretum 70.3% -0.3% $124 1.7% $93 1.3%

Round Rock / Georgetown 67.9% 1.0% $93 1.5% $64 0.1%

San Marcos / Surrounding 55.9% -3.9% $90 -0.7 $50 -4.6%

South / Airport 72.9% 0.3% $131 -3.0% $96 -2.6%

US-290 / I-35 71.3% -0.2% $91 -0.1% $65 -0.3%

Austin Average / Change 71.7% -0.4% $139 0.1% $100 -0.5%Source: STR, Inc.

SUBMARKET PERFORMANCE


SUBMARKET COMPARISON MID YEAR 2018All Hotels – Austin Submarket Analysis

Mid-Year 2018 Compared to Mid-Year 2017

Occupancy ADR RevPARSubmarket Percent Pt. Change $ Amount % Change $ Amount % Change

Downtown 77.3% -4.8% $234 0.3% $181 -5.7%

Northwest Arboretum 76.9% 0.7% $129 1.1% $99 2.1%

Round Rock / Georgetown 69.5% 0.4% $97 1.0% $67 1.5%

San Marcos / Surrounding 53.6% -2.4% $89 -3.1% $47 -7.3%

South / Airport 74.9% -0.6% $157 -6.3% $121 -5.5%

US-290 / I-35 72.9% 0.9% $96 2.9% $70 4.1%

Austin Average / Change 72.7% 2.0% $146 0.1% $106 -1.9%Source: STR, Inc.



DALLAS LODGING MARKETAUSTIN PIPELINE – BY THE NUMBERSProperties Factor Rooms

STATUS115 TOTAL Austin 13,706

3 Abandoned 2852 Deferred 196 1 Unconfirmed -

49 Planning 5,066 40 Final Planning 4,312 22 Start 3,943

PRICE TIER49 Upper 7,02766 Lower 6,679

TIMELINE8 No Dates 718

10 Open by YE 2018 1,24636 Open by YE 2019 3,452 61 Open 2020 and Beyond 8,290


04SUBMARKET PERFORMANCE


AUSTIN GEOGRAPHIC SUBMARKETS



Central Business District



Central Business District / DowntownSUBMARKET PERFORMANCE


78.4%

79.3%

77.5%

76.5% 76.5%76.1% 75.9%

70.0%

71.0%

72.0%

73.0%

74.0%

75.0%

76.0%

77.0%

78.0%

79.0%

80.0%

2013 2014 2015 2016 2017 2018 2019

Occupancy

$188.39

$203.71

$214.88$217.97

$219.66$223.10

$226.20

$188.00

$193.00

$198.00

$203.00

$208.00

$213.00

$218.00

$223.00

$228.00

2013 2014 2015 2016 2017 2018 2019

ADR

6,674 6,746

7,974

9,0229,437

10,015

10,543

6,500

7,000

7,500

8,000

8,500

9,000

9,500

10,000

10,500

11,000

2013 2014 2015 2016 2017 2018 2019

Supply

$147.64

$161.56

$166.58 $166.76$168.12

$169.67$171.66

$145.00

$150.00

$155.00

$160.00

$165.00

$170.00

$175.00

2013 2014 2015 2016 2017 2018 2019

RevPAR


Northwest / Arboretum





Northwest / Arboretum

77.6%

75.1%

77.7%

75.4%75.1%

74.7% 74.5%

72.0%

73.0%

74.0%

75.0%

76.0%

77.0%

78.0%

2013 2014 2015 2016 2017 2018 2019

Occupancy

$103.56

$112.56

$117.27

$121.60$123.62

$125.56$127.30

$100.00

$105.00

$110.00

$115.00

$120.00

$125.00

$130.00

2013 2014 2015 2016 2017 2018 2019

ADR

4,9635,210

5,3875,646

6,097

6,470

6,811

4,800

5,300

5,800

6,300

6,800

7,300

2013 2014 2015 2016 2017 2018 2019

Supply

$80.37

$84.54

$91.10 $91.66$92.88 $93.74 $94.84

$75.00

$80.00

$85.00

$90.00

$95.00

$100.00

2013 2014 2015 2016 2017 2018 2019

RevPAR


Round Rock / Georgetown





65.4%

67.8%

69.0% 68.9%

67.9%67.5% 67.4%

64.0%

65.0%

66.0%

67.0%

68.0%

69.0%

70.0%

71.0%

72.0%

2013 2014 2015 2016 2017 2018 2019

Occupancy

Round Rock / Georgetown

$82.73

$87.61

$91.09$92.08

$93.49$94.95

$96.28

$80.00

$85.00

$90.00

$95.00

$100.00

2013 2014 2015 2016 2017 2018 2019

ADR

3,502 3,5033,657

3,905

4,210

4,468

4,703

3,400

3,600

3,800

4,000

4,200

4,400

4,600

4,800

5,000

2013 2014 2015 2016 2017 2018 2019

Supply

$54.10

$59.40

$62.89 $63.48 $63.53 $64.11$64.86

$50.00

$52.00

$54.00

$56.00

$58.00

$60.00

$62.00

$64.00

$66.00

2013 2014 2015 2016 2017 2018 2019

RevPAR


San Marcos Surrounding





San Marcos Surrounding

59.0%

61.7% 61.7%

58.2%

55.9% 55.6% 55.4%

52.0%

54.0%

56.0%

58.0%

60.0%

62.0%

2013 2014 2015 2016 2017 2018 2019

Occupancy

$83.18

$87.66$86.96

$90.71$90.06

$91.46$92.74

$80.00

$85.00

$90.00

$95.00

2013 2014 2015 2016 2017 2018 2019

ADR

2,703 2,724 2,775

3,054

3,335

3,539

3,725

2,500

2,700

2,900

3,100

3,300

3,500

3,700

3,900

2013 2014 2015 2016 2017 2018 2019

Supply

$49.05

$54.10 $53.68$52.79

$50.35$50.82

$51.41

$45.00$46.00$47.00$48.00$49.00$50.00$51.00$52.00$53.00$54.00$55.00

2013 2014 2015 2016 2017 2018 2019

RevPAR


South / Airport





South / Airport

71.6%

73.0%

74.4%

72.6%72.9%

72.5% 72.3%

70.0%

71.0%

72.0%

73.0%

74.0%

75.0%

2013 2014 2015 2016 2017 2018 2019

Occupancy

$123.33

$128.24

$134.90 $135.27

$131.18

$133.23$135.08

$120.00

$125.00

$130.00

$135.00

$140.00

2013 2014 2015 2016 2017 2018 2019

ADR

5,4535,576

5,7785,934

6,343

6,732

7,087

5,2005,4005,6005,8006,0006,2006,4006,6006,8007,0007,200

2013 2014 2015 2016 2017 2018 2019

Supply

$88.28

$93.63

$100.33$98.21

$95.66$96.54

$97.67

$85.00$87.00$89.00$91.00$93.00$95.00$97.00$99.00

$101.00$103.00$105.00

2013 2014 2015 2016 2017 2018 2019

RevPAR


US-290 / I-35





US-290 / I-35

68.1%

69.5%

72.8%

71.5% 71.3%70.8% 70.7%

66.0%

67.0%

68.0%

69.0%

70.0%

71.0%

72.0%

73.0%

74.0%

2013 2014 2015 2016 2017 2018 2019

Occupancy

$78.91

$83.53

$88.93

$91.20 $91.15$92.57

$93.86

$75.00

$80.00

$85.00

$90.00

$95.00

2013 2014 2015 2016 2017 2018 2019

ADR

6,8347,017 7,000

7,1247,297

7,743

8,151

6,5006,7006,9007,1007,3007,5007,7007,9008,1008,3008,500

2013 2014 2015 2016 2017 2018 2019

Supply

$53.71

$58.09

$64.74 $65.16 $64.95 $65.55 $66.32

$50.00$52.00$54.00$56.00$58.00$60.00$62.00$64.00$66.00$68.00$70.00

2013 2014 2015 2016 2017 2018 2019

RevPAR



Austin Summary

71.5%

72.4%

73.7%

72.2%71.8%

71.3% 71.1% 71.0% 71.1%70.9%

69%

70%

71%

72%

73%

74%

75%

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Occupancy

$118.98

$126.64

$134.77

$139.02 $139.23$141.40

$143.37 $144.81$146.67

$149.98

$115.00

$120.00

$125.00

$130.00

$135.00

$140.00

$145.00

$150.00

$155.00

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

ADR

30,42331,12032,956

35,07137,184

39,46341,546

43,03844,159

45,448

30,00032,00034,00036,00038,00040,00042,00044,00046,00048,00050,000

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Supply

$85.01

$91.66

$99.34 $100.36 $99.90 $100.82 $102.00 $102.84$104.35

$106.35

$80.00

$85.00

$90.00

$95.00

$100.00

$105.00

$110.00

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

RevPAR


LODGING FORECASTS


05AIRBNB UPDATE


AIRBNB UPDATE

Sources: Airbnb, Bookings.com, HomeAway, TripAdvisor

Airbnb Update


AIRBNB UPDATE

Year Hotel Rooms Hotel^ Airbnb Units Airbnb^ Airbnb+Hotels Airbnb+Hotels^

2012 4,849,352 0.30% 13,000 150% 4,862,352 0.50%

2013 4,875,064 0.50% 28,000 115% 4,903,064 0.8%

2014 4,905,305 0.60% 58,000 107% 4,963,305 1.2%

2015 4,953,177 1.00% 115,235 99% 5,068,412 2.1%

2016 5,027,238 1.50% 224,630 95% 5,251,868 3.6%

2017 5,119,907 1.80% 347,748 55% 5,467,655 4.1%

Source: CBRE Hotels’ Americas Research, Airdna, Google Trends, Dec 2017.

Average Daily Supply in the U.S.

Previous Peak @ 3.1% Q1 2009

Airbnb Update


AIRBNB UPDATE

Hotel, Lodging and Private Accommodation Online Distribution Mix, 2017 and 2021

13%

41%

39%

7%

2017

19%

38%

37%

6%

2021

Private Accommodation Intermediaries OTA Hotel & Lodging (excluding private accommodation)Hotel & Lodging Branded Websites/Apps Property Manager Websites

• Sources: Phocuswright’s A Market Transformed: Private Accommodation in the U.S., U.S. Online Travel Overview Seventeenth Edition

Airbnb Update


AIRBNB UPDATE

171.9%

124.3%111.8%

92.5% 90.1%82.4%

74.6%66.5% 65.9% 65.8% 63.5%

57.9% 55.2% 52.0% 49.0%42.7% 40.6% 38.8% 34.6% 33.1% 30.7%

19.4%12.9%

7.1%

-1.1%-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

160.0%

180.0%

200.0%

Source: CBRE Hotels’ Americas Research, Airdna, Dec 2017.

Trends in Airbnb Unit Growth2017 Y-o-Y Change in Active Entire-Home Units

Airbnb Update


AIRBNB UPDATE

Meet local people

Interact with hosts

Experience local culture

49%Location

53%Value

• Source: Phocuswright’s A Market Transformed: Private Accommodation in the U.S.,

WHY THEY RENTED?

Airbnb Update


Morgan Stanley Survey & STR Report

Profile of Airbnb Demand

Source: STR, Airbnb, Q1, 2017

Airbnb Update


Business Travel on Airbnb?

11% of all Airbnb Guests are business travelers

30% of Airbnb Guests in Urban Markets are business travelers

Airbnb Update


Special events lead to surge in Airbnb supply

-

2,000

4,000

6,000

8,000

10,000

12,000

Active Airbnb Listings

Austin Washington DC

Inauguration &Women's March

SXSW

SXSW

SXSW

Source: Airdna, CBRE Hotels’ Americas Research, Q2 2017.Note: SXSW = South by Southwest Festival

Airbnb Update


AIRBNB UPDATE

Airbnb Update


AIRBNB UPDATE

“AIRBNB INSIGHTS” PUBLICATION Published Quarterly By CBRE

Hotels’ Americas Research

Top 60 Markets across the nation

Brief included in CBRE Hotels’ Hotel Horizons

Airbnb Update

TRENDS® IN THE HOTEL INDUSTRY

• Annual voluntary survey of thousands of U.S. hotel financial statements

• First survey conducted in 1937– Occ: 64.4%– ADR: $3.04

• Data converted to USALI to ensure comparability

• 2018 Survey Sample (2017 data)• 7,785 hotels across the U.S.• Occupancy: 75.6%• ADR: $179.25

Annual Benchmarking Survey – Origin: 1937

06CLOSING THOUGHTS


CLOSING THOUGHTS1. The fundamentals within the hotel industry remain solid; therefore attractive.

2. Austin economic indices consistently outperform state and nation, and is expected to continue.

3. Occupancies percentages will remain in the low 70’s, still above the long run average of 67.1%. Additions continue in 2018 and 2019, which will cause occupancies to decline.

4. Average Daily Room Rates are expected to decline from previous years, but below the long term average of 4.0%.

5. RevPAR increases continue to be driven by ADR, NOT Occupancy. (Drive Rate where you can!)

6. Hotel construction will continue; the threat of overbuilding is the exception and not the rule.

7. Creative revenue growth and staffing help cushion cost issues. Profit growth should remain good, not great.

8. Sharing economy will be more of a factor for traditional hotels, but no threat to Austin hotels . . . yet.

9. Create EXPERIENCES, market EXPERIENCES, sell EXPERIENCES.

Closing Thoughts

© Copyright 2018 CBRE Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of the CBRE Global Chief Economist.

2100 McKinney, Suite 700Dallas, Texas 75201 www.cbrehotels.com

JEFF BINFORDDirectorCBRE Hotels - ConsultingDallas, Texas+1 214 979 [email protected]

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