Download - State of the Hotel Industry
-
September 24, 2015
2015 Texas Trends Hotel Industry Report Hotel & Lodging Association of Greater Houston
-
The Houston Story
Starting with Record High Occupancies/Rates with Minimum New Supply
Oil Price Drop Reducing Occupancies/Rates
New Supply Reducing Occupancies/Rates
Positive Factors Providing Some Relief
Temporary DownturnStill Above Long-Term Average
Stabilize in 2017
Redemption in 2018 and 2019
-
I. The Economy
II. Lodging Forecasts U.S.
III. Lodging Forecasts - Texas
IV. Houston Submarkets
Presentation Outline
-
Factors Affecting Economic Forecasts
Collapse in Energy & Other Commody Prices
Chinese Economic Slowdown
Value of U.S. Dollar
U.S. Monetary Policy Normalization
Iran Nuclear Deal
-
Source: Moodys Analytics, July 2015
United States: Economic Outlook
Employment
Personal Income
GDP
CPI (Inflation)
2014 1.9% 2.6% 2.4% 1.6%
2015 2.2% 4.2% 2.4% 0.4%
2016 2.2% 3.8% 3.0% 2.7%
2017 2.2% 4.1% 2.9% 2.8%
2018 1.6% 3.4% 2.7% 2.8%
2019 0.9% 2.0% 2.2% 2.6%
-
Houston: Economic Outlook
Employment
Personal Income
GMP
CPI (Inflation)
2014 3.5% 4.8% 5.4% 2.8%
2015 1.9% 4.3% 2.4% 0.0%
2016 1.6% 2.6% 2.3% 3.0%
2017 3.1% 4.7% 3.4% 3.0%
2018 2.6% 5.3% 3.8% 2.9%
2019 1.8% 3.6% 3.2% 2.6%
Source: Moodys Analytics, July 2015
-
June 2015
Source: Texas Work Force Commission
United States 6.3% 5.5%
Texas 5.5% 4.4%
Austin 4.4% 3.3%
Dallas/Fort Worth 5.4% 4.0%
Houston 5.4% 4.5%
San Antonio 5.1% 3.8%
June 2014
* Not seasonally adjusted
Unemployment Comparison*
-
Influence of Texas Oil Factor
-
Recovery of the Oil & Gas Industry
Oil Prices Remain Low Through 2016
Oil Markets Begin Rebalance in Mid-2016
Drilling Returns in Early 2017
Industry Rebounds in 2018 & 2019
-
I. The Economy
II. Lodging Forecast U.S.
III. Lodging Forecast - Texas
IV. Houston Submarkets
Presentation Outline
-
Hotel Horizons
Econometric Forecasting Model Smith Travel Research historical lodging data,
pipeline data
Moodys Economy.com economic forecasts
Five-Year Forecasts of Supply, Demand, Occupancy, ADR, RevPAR 59 Major U.S. Markets
Updated Quarterly
-
United States: 2nd Quarter 2015
= Below/Above Long Run Average
Long Term
Average 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F
Supply 1.9% 0.4% 0.4% 0.6% 0.8% 1.1% 1.8% 2.3% 2.5% 2.7%
Demand 2.0% 4.7% 2.7% 2.0% 4.3% 3.3% 2.2% 1.6% 1.4% 0.8%
Occupancy 62.0% 60.0% 61.4% 62.2% 64.4% 65.8% 66.1% 65.6% 64.9% 63.7%
ADR 3.0% 3.8% 4.2% 3.8% 4.5% 5.0% 5.9% 6.3% 5.3% 3.4%
RevPAR 3.2% 8.1% 6.6% 5.2% 8.2% 7.2% 6.3% 5.5% 4.1% 1.5%
Source: PKF Hospitality Research Hotel Horizons Report (2nd Quarter 2015), Smith Travel Research
-
New Hotel Additions 2015 - 2017
New York MSA 22,000 to 25,000
Houston MSA 8,000 to 10,000
Austin MSA 6,000 to 8,000
-
U.S. Hotel Markets - Supply
0.1% 0.3%
0.3%
0.7%
0.9%
1.8%
6.2%
7.4%
7.9%
8.4%
8.4%
0% 5% 10%
Tucson
Oakland
Hartford
Sacramento
Norfolk-VA
National Average
Cleveland
New York
Houston
Austin
Pittsburgh
Greatest and Least Change in Supply Forecast Change 2015 to 2016
Source: PKF Hospitality Research, a CBRE Company, October 2015 Hotel Horizons reports
-
U.S. Hotel Markets - Demand
Greatest and Least Change in Demand Forecast Change 2015 to 2016
Source: PKF Hospitality Research, a CBRE Company, October 2015 Hotel Horizons reports
0.5% 0.7% 0.7%
1.0% 1.0%
2.2% 4.7%
5.3% 5.6%
6.3%
6.4%
0% 4% 8%
San FranciscoNew Orleans
HartfordSan Diego
SacramentoNational
SavannahAustin
New YorkPittsburghCleveland
-
U.S. Hotel Markets - Occupancy
Greatest and Least Change in Occupancy Forecast Change 2015 to 2016
Source: PKF Hospitality Research, a CBRE Company, October 2015 Hotel Horizons reports
-5.6%
-2.8%
-2.8%
-2.0%
-1.7%
0.4%
1.5%
1.7%
1.9%
2.2%
2.5%
-8% -4% 0% 4%
Houston
Austin
Miami
Pittsburgh
Albany/New York
National Average
Oakland
Norfolk-VA Beach
Columbia
Richmond
Tucson
-
I. The Economy
II. Lodging Forecast U.S.
III. Lodging Forecast Texas
IV. Houston Submarkets
Presentation Outline
-
56.7% 60.6%
63.6% 66.2% 68.6% 69.0% 67.5% Occupancy
$89.47 $91.75 $94.11
$99.25 $103.67 $107.00 $110.00
$50.69 $55.63 $59.81
$65.65 $71.13 $73.99 $74.41 ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
250,312 254,399 257,474 259,228 261,475 268,234
281,918
Supply
Texas Summary
-
Austin: 2nd Quarter 2015
= Below/Above Long Run Average
Long Term
Average 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F
Supply 3.2% 2.4 0.7% 2.8% 2.2% 7.6% 8.4% 5.9% 3.6% 2.4%
Demand 4.3% 6.9% 3.2% 7.4% 3.6% 6.7% 5.3% 4.5% 2.9% 2.5%
Occupancy 66.5% 66.7% 68.3% 71.4% 72.4% 71.8% 69.8% 68.8% 68.4% 68.4%
ADR 4.1% 5.9% 7.7% 5.4% 6.6% 5.9% 4.6% 3.5% 2.2% 2.3%
RevPAR 5.4% 10.5% 10.4% 10.2% 8.0% 5.1% 1.7% 2.1% 1.5% 2.3%
Source: PKF Hospitality Research Hotel Horizons Report (2nd Quarter 2015), Smith Travel Research
-
Austin: Upper-Priced
= Below/Above Long Run Average
Long Term
Average 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F
Supply 4.1% 2.8% 0.2% 2.0% 2.5% 12.7% 11.8% 9.4% 4.3% 2.0%
Demand 5.4% 6.8% 2.6% 5.1% 3.5% 9.5% 7.4% 6.5% 3.2% 3.1%
Occupancy 70.4% 72.6% 74.3% 76.5% 77.3% 75.1% 72.1% 70.2% 69.5% 70.2%
ADR 4.3% 6.4% 8.2% 6.2% 6.3% 5.6% 4.3% 3.0% 2.1% 2.1%
RevPAR 5.7% 10.5% 10.8% 9.3% 7.3% 2.6% 0.3% 0.3% 1.0% 3.3%
Source: PKF Hospitality Research Hotel Horizons Report (2nd Quarter 2015), Smith Travel Research
-
Dallas: 2nd Quarter 2015
= Below/Above Long Run Average
Long Term
Average 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F
Supply 2.4% 0.8% 1.4% 0.3% 0.2% 1.6% 4.3% 5.0% 4.1% 3.7%
Demand 3.5% 9.1% 4.7% 5.5% 5.8% 5.1% 3.6% 3.3% 3.1% 2.5%
Occupancy 61.0% 59.1% 61.1% 64.3% 67.8% 70.2% 69.7% 68.6% 67.9% 67.1%
ADR 2.2% 3.4% 1.1% 5.0% 3.4% 5.4% 5.5% 4.3% 3.7% 2.9%
RevPAR 3.4% 11.9% 4.5% 10.5% 9.1% 9.0% 4.7% 2.6% 2.7% 1.7%
Source: PKF Hospitality Research Hotel Horizons Report (2nd Quarter 2015), Smith Travel Research
-
Fort Worth: 2nd Quarter 2015
= Below/Above Long Run Average
Long Term
Average 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F
Supply 3.0% 1.3% 1.1% 0.4% 1.6% 0.5% 1.8% 3.6% 3.5% 3.6%
Demand 3.6% 7.1% 2.8% 4.0% 4.5% 4.1% 3.1% 3.3% 2.6% 2.2%
Occupancy 61.0% 59.4% 60.4% 62.6% 64.4% 66.7% 67.6% 67.3% 66.8% 65.8%
ADR 3.2% 1.1% -1.3% 1.2% 3.3% 3.6% 4.1% 3.4% 3.4% 3.0%
RevPAR 3.9% 6.9% 0.4% 4.8% 6.4% 7.3% 5.4% 3.1% 2.5% 1.5%
Source: PKF Hospitality Research Hotel Horizons Report (2nd Quarter 2015), Smith Travel Research
-
San Antonio: 2nd Quarter 2015
Source: PKF Hospitality Research Hotel Horizons Report (2nd Quarter 2015), Smith Travel Research
= Below/Above Long Run Average
Long Term
Average 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F
Supply 3.2% 2.5% 1.4% 0.3% 0.5% 0.2% 2.5% 3.0% 3.1% 3.1%
Demand 3.6% 7.2% 5.3% -0.5% 3.4% 2.5% 2.1% 2.3% 2.7% 2.0%
Occupancy 65.0% 61.2% 63.5% 63.0% 64.8% 66.3% 66.0% 65.5% 65.2% 64.6%
ADR 3.0% 0.1% 1.4% 4.6% 2.4% 3.1% 3.1% 2.7% 2.5% 1.7%
RevPAR 3.5% 4.7% 5.3% 3.8% 5.4% 5.5% 2.7% 1.9% 2.1% 0.7%
.
-
The Houston market is really complicated.
I had to upgrade my crystal ball to come up with the forecast.
-
New Hotel Supply - 8,000 to 10,000 rooms
Oil Price Decline - Exploration Rigs Bottom Out - Service Company Layoffs - Energy Corridor, Westchase,
Northwest, Galleria, CBD Hit Hardest
- Corporate Travel Down - Corporate Group Cancellations
Exxon Move to New Campus
Reduced Compression
Housing Market Deceleration
Petrochemical Plant Expansion - East Houston / Bay Area - Driven By Low Oil Prices - 100 Projects Worth $80 Billion
TMC Research & Development
2016 NCAA Final Four
2017 Super Bowl
Convention Activity - Marriott Marquis
Southwest International-Hobby
2018/2019 Oil/Gas Rebound
Houston Local Demand Factors
-
Houston: 2nd Quarter 2015
= Below/Above Long Run Average
Long Term
Average 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F
Supply 2.5% 1.9% 0.9% 0.6% 1.3% 2.8% 7.9% 4.9% 3.2% 2.1%
Demand 4.0% 10.9% 10.3% 6.3% 5.1% -1.8% 1.8% 2.9% 6.5% 4.8%
Occupancy 62.2% 60.0% 65.6% 69.3% 71.9% 68.7% 64.9% 63.6% 65.6% 67.4%
ADR 3.1% 2.5% 3.9% 7.8% 5.9% 1.0% -2.1% 1.4% 3.1% 4.2%
RevPAR 4.8% 11.6% 13.6% 13.9% 9.9% -3.5% -7.6% -0.5% 6.4% 6.9%
Source: PKF Hospitality Research Hotel Horizons Report (2nd Quarter 2015), Smith Travel Research
-
Houston: Upper-Priced
= Below/Above Long Run Average
Long Term
Average 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F
Supply 2.3% 3.3% 1.5% 1.1% 1.7% 3.8% 11.3% 6.2% 3.6% 2.3%
Demand 3.6% 11.3% 8.2% 4.0% 3.3% -1.4% 3.1% 4.1% 7.4% 5.8%
Occupancy 64.9% 65.7% 70.0% 72.0% 73.1% 69.4% 64.3% 63.0% 65.4% 67.6%
ADR 3.5% 3.0% 4.3% 8.9% 5.4% -0.5% -2.8% 1.1% 2.9% 3.8%
RevPAR 5.0% 10.9% 11.2% 12.0% 7.1% -5.6% -9.9% -1.0% 6.7% 7.3%
Source: PKF Hospitality Research Hotel Horizons Report (2nd Quarter 2015), Smith Travel Research
-
Houston: Lower-Priced
= Below/Above Long Run Average
Long Term
Average 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F
Supply 2.7% 0.9% 0.5% 0.3% 1.0% 2.1% 5.5% 3.9% 2.9% 2.0%
Demand 4.3% 10.6% 12.0% 8.1% 6.5% -2.0% 0.9% 2.0% 5.7% 4.0%
Occupancy 60.4% 56.1% 62.5% 67.4% 71.0% 68.2% 65.3% 64.1% 65.9% 67.2%
ADR 2.7% 1.3% 5.0% 8.1% 8.2% 2.9% -1.9% 1.0% 2.9% 4.2%
RevPAR 4.7% 11.0% 17.0% 16.5% 14.1% -1.1% -6.2% -0.8% 5.7% 6.2%
Source: PKF Hospitality Research Hotel Horizons Report (2nd Quarter 2015), Smith Travel Research
-
I. The Economy
II. Lodging Forecast U.S.
III. Lodging Forecast - Texas
IV. Houston Submarkets
Presentation Outline
-
Houston Summary
55.1% 60.0%
65.6% 69.3% 71.9% 69.0%
65.0% Occupancy
$87.97 $90.15 $93.64 $100.97
$106.96 $108.00 $105.50
$48.47 $54.13
$61.41 $69.92
$76.89 $74.26 $68.60
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
72,461 73,807 74,461 74,926 75,897 78,228
84,130
Supply
-
Houston CBD
61.2% 63.3%
67.6% 70.6%
73.3% 69.0%
64.0%
Occupancy
$144.10 $147.58 $155.30
$170.25 $174.05 $178.50 $175.00
$88.19 $93.42 $104.98
$120.20 $127.58 $123.17
$112.00
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
5,085 5,430 5,416 5,399 5,571
6,060 6,642
Supply
-
Galleria / Greenway Plaza
68.4% 73.0%
77.0% 77.4% 76.7% 74.0%
69.5%
Occupancy
$118.77 $126.31 $133.02
$148.53 $157.40
$150.00 $147.00
$81.24 $92.21
$102.43 $114.96 $120.73 $111.00
$102.17
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
8,116 7,963 7,835 7,798 7,800 7,801 8,403
Supply
-
Texas Medical Center / Reliant Park
58.4% 62.5%
65.8% 69.2% 69.9% 68.5% 66.5%
Occupancy
$96.43 $100.03 $104.94
$113.86 $121.74 $122.00 $119.00
$56.32 $62.52
$69.05 $78.79
$85.10 $83.61 $79.14
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
5,518 5,525 5,529 5,550 5,549 5,494 5,640
Supply
-
Bush Intercontinental Airport
53.5% 60.5%
66.6% 70.3% 73.5% 71.0%
67.0%
Occupancy
$68.07 $67.74 $70.84 $75.24
$81.56 $85.00 $83.00
$36.42 $40.98
$47.18 $52.89
$59.95 $60.35 $55.61
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
12,096 11,754 11,973 11,964 12,004 12,427 12,778
Supply
-
Bay Area / Hobby Airport
49.7% 53.0%
58.1% 62.4%
68.1% 67.5% 64.0% Occupancy
$70.47 $69.81 $71.54 $75.35
$80.54 $82.00 $79.50
$35.02 $37.00 $41.56
$47.02 $54.85 $55.35 $50.88
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
6,314 6,464 6,573 6,670 6,645 6,669
7,145
Supply
-
Southwest Houston / Sugar Land
52.7% 55.7% 64.1%
72.2% 72.5% 70.5% 68.0% Occupancy
$68.80 $70.79 $72.72 $78.11
$84.89 $86.50 $84.50
$36.26 $39.43 $46.61
$56.40 $61.55 $60.98 $57.46
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
6,216 6,600 6,476 6,459 6,581 6,582 6,676
Supply
-
Katy Freeway / Westchase
55.8% 63.2%
68.1% 72.6% 73.1%
68.0% 62.5%
Occupancy
$85.60 $89.67 $95.61
$104.76 $112.96 $109.50 $106.00
$47.76 $56.67
$65.11 $76.06
$82.57 $74.46
$66.25
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
9,786 10,069 10,386 10,547 10,508 11,110
12,139
Supply
-
Northwest Houston
54.4%
61.9% 66.9% 69.5% 70.5%
64.0% 60.0%
Occupancy
$72.52 $73.86 $78.74
$86.43 $93.73 $95.50 $92.00
$39.45 $45.72
$52.68 $60.07
$66.08 $61.12
$55.20
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
6,590 6,560 6,670 6,899 7,147 7,574
8,181
Supply
-
East Houston / Baytown
45.4% 48.5% 58.2% 61.2%
71.6% 67.5% 67.0% Occupancy
$58.89 $58.48 $60.28 $63.58 $66.83
$71.00 $69.00
$26.74 $28.36
$35.08 $38.91
$47.85 $47.96 $46.23 ADRRevPAR
2010 2011 2012 2013 2014 2015F 2016F
6,938 7,290 7,384 7,382 7,448 7,561
7,628
Supply
-
Galveston
47.0% 52.5%
56.6% 57.7% 60.1% 59.5% 58.5%
Occupancy
$98.30 $103.69 $110.05 $113.09
$115.79 $120.00 $118.00
$46.20 $54.44
$62.29 $65.25 $69.59 $71.40 $69.03
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
6,171 6,407 6,402 6,549 6,651 6,658
6,808
Supply
-
North / The Woodlands
51.0% 55.9%
59.9% 63.8% 66.9% 66.0% 61.5% Occupancy
$99.34 $101.73 $105.62 $110.67
$118.35 $123.00 $120.00
$50.66 $56.87
$63.27 $70.61 $79.18 $81.18 $73.80
ADR
RevPAR
2010 2011 2012 2013 2014 2015F 2016F
5,802 6,152 6,219 6,258 6,644 6,950
8,898
Supply
-
For a Copy of This Presentation Please Visit
www.houstonhotels.org or
Contact: Randy McCaslin Email: [email protected]
713.621.5252 Ext. 21
Slide Number 1The Houston StorySlide Number 3Slide Number 4Factors Affecting Economic ForecastsUnited States: Economic OutlookHouston: Economic OutlookUnemployment Comparison*Slide Number 9Influence of Texas Oil FactorRecovery of the Oil & Gas IndustrySlide Number 12Hotel HorizonsSlide Number 14New Hotel Additions 2015 - 2017U.S. Hotel Markets - SupplyU.S. Hotel Markets - DemandU.S. Hotel Markets - OccupancySlide Number 19Slide Number 20Slide Number 21Slide Number 22Slide Number 23Slide Number 24Slide Number 25Slide Number 26Slide Number 27Slide Number 28Slide Number 29Slide Number 30Slide Number 31Slide Number 32Slide Number 33Slide Number 34Slide Number 35Slide Number 36Slide Number 37Slide Number 38Slide Number 39Slide Number 40Slide Number 41Slide Number 42Slide Number 43Slide Number 44Slide Number 45