smith travel research presentation
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US and MarylandLodging Overview
Steve Hood, Senior VP
SMITH TRAVEL RESEARCH
Agenda
• Total US Overview
• Maryland Overview
• US Projections
Total US Overview
Europe €H1 08 YE 08 09 YTD -0.4% -5.1% -20.0%
ME & A $H1 08 YE 08 09 YTD25.7% 14.8% -18.2%
Asia Pacific $H1 08 YE 08 09 YTD12.5% 2.9% -26.0%
Americas $H1 08 YE 08 09 YTD 4.2% -0.4% -20.6%
UK £H1 08 YE 08 09 YTD 2.5% -0.4% -11.1%
Global - RevPAR Percent Change July 2009 YTD
USA $H1 08 YE 08 09 YTD 1.7% -1.8% -18.2%
98.41
67.4062.5
107.90
143.3147.9
55.1256.0
25
50
75
100
125
150
Supply (millionrooms)
Occupancy YTD ADR YTD RevPAR YTD
Jul-08 Jul-09
Total US - Key Performance IndicatorsJuly 2008 versus July 2009 YTD
As of July 2009
-10.4
2.5
-1.8
-4.2
-1.8
2.63.2
-8.8-7.5
-18.2-20
-15
-10
-5
0
5
Supply Demand Occ ADR RevPAR
2008 Annual YTD 2009
Total US - Key Performance Indicators Percent ChangeFull Year 2008 versus July 2009 YTD
-8
-6
-4
-2
0
2
4
6
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Supply % Change
Demand % Change
Total US - Historic Supply & Demand Percent ChangeTwelve Month Moving Average – 1989 to July 2009
2008 Smith Travel Research, Inc.
3.1%
- 6.0%
-1.1%
- 4.8%
▼▼
▼▼
▼▼ ▼
▼▼▼
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2003 2004 2005 2006 2007 2008 JFMAMJJ
Total US - Room Supply Percent ChangeMonthly Jan 2003 – July 2009
Stuck at 3.2
352
507
729
506
843
683
350
280
359
669
542
309
215217135
125
0100200300400500600700800900
1000
Number of Hotels Rooms (hundreds)
2002 2003 2004 20052006 2007 2008 2009E
Total US - Closed HotelsAnnual 2002 through 2009
2009 Smith Travel Research, Inc.
66,946 rooms in 2005 to 13,500 rooms in 2009
JQH: “not over developed, just under demolished”
855
698630 605
742827
1031
903
727 735823
998
1520
1379
1550
1400
0
200
400
600
800
1000
1200
1400
1600
1800
Number of Hotels Rooms (hundreds)
2002 2003 2004 20052006 2007 2008 2009E
Total US - Opened HotelsAnnual 2002 through 2009
2009 Smith Travel Research, Inc.
152,001 rooms in 2008,155,000 rooms in 2009 estimated
-10
-5
0
5
10
2003 2004 2005 2006 2007 2008 JFMAMJJ
Total US - Room Demand Percent ChangeMonthly January 2003 – July 2009
-10
-5
0
5
10
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Occ % Chg
ADR % Chg
Total US – Historic Occupancy & ADR % ChangeTwelve Month Moving Average – 1989 to July 2009
-3.4%
-6.8%-8.9%
-5.1%-4.7%
0.1%
Occ goes negative and ADR drops
Occ turns around and ADR follows(approx. 3 months)
50
60
70
80
90
100
110
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Occupancy (%)
ADR ($)
Peak $107.23 Sep 2008
$101.27July 2009
Peak 64.7%Jan 1997 56.6%
July 2009
Total US - Historic Occupancy & ADRTwelve Month Moving Average – July 2009
2008 Smith Travel Research, Inc.
86.41 91.16 104.08 106.7284.0785.30 98.0082.9682.82
$87.73$89.11
$91.15
$93.57
$96.74
$99.86
$106.65
$85.30
$102.71
80
90
100
110
2000 2001 2002 2003 2004 2005 2006 2007 2008
Actual ADRYr 2000, Grown by CPI
If year 2000 ADR had increased by CPI each year…
Total US Historic Room Rates - Actual vs. Inflation AdjustedAnnual 2000 - 2008
-12
-10
-8
-6
-4
-2
0
1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29
Demand
ADR
Total US - Demand & ADR Percent ChangeRunning 28 Day (Daily Data) - January 1 to August 29, 2009
-30
-20
-10
0
10
20
1/31/08 4/1/08 5/31/08 7/30/08 9/28/08 11/27/08 1/26/09 3/27/09 5/26/09 7/25/09
Group Demand
Transient Demand
Total US - Group & Transient Demand % Change Running 28 Day – January 31, 2008 to August 29, 2009
Oct 2008
Jul 2009
66.9
42.8
53.1
58.6 59.4
56.1
61.8
64.3
68.467.7
48.4
67.4
61.5
64.0
35
45
55
65
75
Sun Mon Tue Wed Thur Fri Sat
July 2008July 2009
Total US – Occupancy by Day of WeekJuly 2008 YTD vs. July 2009 YTD Less of a gap on the weekend,
Saturday highest occ day of week
104.43105.63
96.35
99.44100.72 100.35
98.3
95.6796.74
110.55
105.85
109.91109.16
107.45
80
100
120
Sun Mon Tue Wed Thur Fri Sat
July 2008July 2009
Total US - ADR by Day of Week July 2008 YTD vs. July 2009 YTD
Gap even for every day of the week
-15.9
-6.8
0.7
-16.0
-20
-15
-10
-5
0
5
Occupancy ADR
WeekdayWeekend
Total US - Transient Occupancy & ADR % ChangeWeekday / Weekend – August 29, YTD
2009 Smith Travel Research, Inc.
Transient occupancymuch less impactedon weekends
ADR almost the same
-4.7
-22.4
-16.3
-4.4
-25
-20
-15
-10
-5
0
Occupancy ADR
WeekdayWeekend
Total US - Group Occupancy & ADR % ChangeWeekday / Weekend – September 5, YTD
2009 Smith Travel Research, Inc.
Group occupancy less impacted on weekend
ADR almost the same
-11.1
-5.4
-11.1
-10.1
-11.4-10.5-9.7
-13.2
-5.4
-16.5
-9.7
-4.6
-20
-15
-10
-5
0
Luxury UpperUpscale
Upscale Mid w F&B Mid wo F&B Economy
OccupancyADR
US Chain Scales - Occupancy & ADR % ChangeJuly 2009 YTD
-8.7
-0.9
-9.4
-11.0
-8.8
-11.8
-10.1
-8.0
-9.8
-12.3
-2.2
-12.0
-15
-10
-5
0
Urban Suburban Airport Interstate Resort Small Town
OccupancyADR
US Location Segments – Occupancy & ADR % ChangeJuly 2009 YTD
US Regions – Occupancy, ADR, & RevPAR Percent ChangeJuly 2009 YTD
Occupancy: ▼ -11.1%ADR: ▼ -10.5%
RevPAR: ▼ -20.5 %
Occupancy: ▼ -13.4%ADR: ▼ -12.8%
RevPAR: ▼ -24.4 %
Occupancy: ▼ -8.1%ADR: ▼ -2.4%
RevPAR: ▼ -10.3 %
Occupancy: ▼ -11.4%
ADR: ▼ -3.8%
RevPAR: ▼ -14.7 %
Occupancy: ▼ -10.5%ADR: ▼ -7.3%
RevPAR: ▼ -17.1 %
Occupancy: ▼ -8.3%ADR: ▼ -3.1%
RevPAR: ▼ -11.0 %
Occupancy: ▼ -8.8%ADR: ▼ -7.2%
RevPAR: ▼ -15.3 %
Occupancy: ▼ -10.3%ADR: ▼ -14.5%
RevPAR: ▼ -23.3 %
Occupancy: ▼ -10.1%ADR: ▼ -7.2%
RevPAR: ▼ -16.5 %
2008 Smith Travel Research, Inc.
TOTAL USOccupancy: ▼ -10.4%
ADR: ▼ -8.8%
RevPAR: ▼ -18.2 %
-10.1-11.5
-8.0
-10.7
-21
3.1 3.2
-6.7-7.2
-16.2
-25
-20
-15
-10
-5
0
5
Supply Demand Occ ADR RevPAR
Top 25 Rest of U.S.
Top 25 Markets versus Rest of US – Percent ChangesJuly 2009 YTD
ADR for Top 25 more impacted
Maryland Overview
Maryland Key StatisticsJuly 2009 YTD
% Change
Number of Hotels 644
Number of Rooms 73,452
Room Supply 14,983,880 5.4% (5)
Room Demand 8,757,736 .6% (2)
Occupancy 58.4% (10) - 4.6% (6)
Average Daily Rate $113.60 (5) - 3.6%
RevPAR $66.40 (8) - 8.0% (9)
Room Revenue $995 million - 3.0% (6)
2008 Smith Travel Research, Inc.
4.3
4.1
3.3
2.9
1.6
1.1
4.5
5.4
0 2 4 6
Maryland
Delaware
New Jersey
Virginia
New York
North Carolina
Pennsylvania
West Virginia
Comparative States - Room Supply % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-6.7
-6.7
-4.4
-3.5
0.2
0.6
-9.1
-10.8
-12 -10 -8 -6 -4 -2 0 2
New Jersey
North Carolina
New York
Pennsylvania
Delaware
Virginia
West Virginia
Maryland
Comparative States - Room Demand % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-11.6
-9.6
-8.5
-8.1
-7.4
-4.6
-1
-14.4
-16 -14 -12 -10 -8 -6 -4 -2 0
New Jersey
North Carolina
New York
Delaware
Pennsylvania
Virginia
Maryland
West Virginia
Comparative States - Occupancy % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
51.5%
53.7%
56.5%
58.4%
61.3%
51.9%
50.4%
58.5%
-8.5
-6.4
-5.3
-4.8
-4.3
-3.7
-2
-19.6
-22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0
New York
New Jersey
Delaware
North Carolina
Pennsylvania
Virginia
Maryland
West Virginia
Comparative States - ADR Percent ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
104.36
99.99
79.95
98.40
113.60
99.04
76.25
153.77
-21.8
-16.3
-14.4
-12.6
-11.3
-8
-2.9
-27.3
-30 -25 -20 -15 -10 -5 0
New York
New Jersey
North Carolina
Delaware
Pennsylvania
Virginia
Maryland
West Virginia
Comparative States - RevPAR Percent ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
44.63
55.97
52.85
51.50
41.46
66.40
52.63
94.28
Baltimore Market4 tracts – City, Suburbs (County), Area (Howard, Carroll, Harford, Queen Anne’s), BWI/Annapolis (Anne Arundel)
Wilmington, DE (Cecil County)
Maryland Area Market2 tracts – West (Washington, Allegheny, Garrett), Chesapeake/Ocean City (Kent, Talbot, Caroline, Dorcester, Wicomico, Worcester, St. Marys)
Washington, DC Market3 MD tracts – Frederick/Rockville (Frederick, Montgomery), Bethesda/College Park, MD South/East (Prince Georges, Calvert, Charles)
Maryland Hotel Census Statistics by TractJuly 2009 YTD
2008 Smith Travel Research, Inc.
Market Tract Census Sample
Props Rooms Props Rooms
Baltimore Baltimore City 49 9,452 38 8,998
Baltimore Baltimore Suburbs 59 6,193 37 5,177
Baltimore Baltimore Area 73 6,215 55 5,528
Baltimore BWI Airport/Annapolis 71 9,824 65 9,205
MD Area West/Hagerstown 44 3,468 30 2,768
MD Area Chesapeake/Ocean City 166 13,903 58 6,698
Washington DC Frederick/Rockville 55 7,668 49 7,494
Washington DC Bethesda/College Park 40 5,796 38 5,731
Washington DC MD South/East 76 9,967 59 9,125
10.8
1.5
4.5
1.7 1.5 1.43.1
1.6
19.2
3.2 3.3
0
3
6
9
12
15
18
21
Maryland Tracts - Room Supply % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
2.8
-4.2
4.4
-1.8 -2.5
-5.7
-1.2 -1.8
12.8
-7.5-5.8
-10
-5
0
5
10
15
Maryland Tracts - Room Demand % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-7.2
-5.6
-0.1
-3.4-3.9
-7
-4.2-3.3
-5.3
-10.4
-8.8
-12
-10
-8
-6
-4
-2
0
Maryland Tracts – Occupancy Percent ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-8.4
-5.9
-9.2
-4.6
1.9
-1
-4.3
-7.6
7.3
-8.8-7.2
-12
-9
-6
-3
0
3
6
9
Baltimore City
Baltimore Suburb
s
BWI / Annapolis
Baltimore Area
MD West /
Hagerstown
Chesapeake / OC
Frederick / R
ockville
Bethesda / Colle
ge Pk
MD South & East
Total US
South Atla
ntic
Maryland Tracts – ADR Percent ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-15
-11.1-9.3
-7.9
-2.1
-7.9 -8.3
-10.7
1.6
-18.7
-15.3
-21
-18
-15
-12
-9
-6
-3
0
3
Baltimore City
Baltimore Suburb
s
BWI / Annapolis
Baltimore Area
MD West /
Hagerstown
Chesapeake / OC
Frederick / R
ockville
Bethesda / Colle
ge Pk
MD South & East
Total US
South Atla
ntic
Maryland Tracts – RevPAR Percent ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
0.9
-9.6-10.6
-15
-5.1
-14.5 -14
0
-3.6
-10.4-11.3
1.2
-9.1
-1.4
-12.3
-5.7
-18
-15
-12
-9
-6
-3
0
3
Maryland Counties – RevPAR % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
1.9
-11.7
-8.6 -8.9-7.1
0.8
-12.4
0.1
-18.5
-15.4
-6.1
-1.1
-5.4
-10.8
-13
-15.9
-9.8
-21
-18
-15
-12
-9
-6
-3
0
3
Maryland Smaller Cities – RevPAR % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
Maryland Hotel Census Statistics by BrandJuly 2009 YTD
Chain Census Props Census Rooms Sample Props Sample Rooms
Marriott 10 3823 10 3823
Holiday Inn 15 3038 15 3038
Comfort Inn 27 2925 27 2925
Courtyard 18 2649 17 2558
Hampton Inn 22 2555 22 2555
Hilton 8 2464 8 2464
Sheraton Hotel 8 2376 8 2376
Days Inn 22 2270 22 2270
Best Western 18 2059 13 1600
Gaylord Entertainment 1 2000 1 2000
Residence Inn 15 1861 15 1861
Holiday Inn Express Hotel 18 1675 18 1675
Hilton Garden Inn 11 1519 11 1519
Quality Inn 12 1515 12 1515
Red Roof Inn 11 1312 11 1312
Hyatt 3 1278 3 1278
Maryland Hotel Census Statistics by ScaleJuly 2009 YTD
2008 Smith Travel Research, Inc.
Scale Census Props Census Rooms Sample Props Sample Rooms
Luxury Chains 2 411 2 411
Upper Upscale Chains 43 14990 43 14990
Upscale Chains 79 11214 78 11123
Midscale W/ F&B Chains 61 9020 56 8561
Midscale W/O F&B Chains 135 13848 135 13848
Economy Chains 114 10106 106 9685
Independents 210 13863 18 2890
8.8
-1.0
7.0
9.2
-3.3
15.1
7.1
5.0
-1.5
1.4
-5
-2
1
4
7
10
13
16
Upper Upscale Upscale Mid w F&B Mid wo F&B Economy
MD US
Maryland by Scale - Supply Percent ChangeJuly 2009 YTD
-2.6
-5.4
3.32.5
-9.5
12.3
-4.8-5.5
-12.7
-8.4
-15
-10
-5
0
5
10
15
Upper Upscale Upscale Mid w F&B Mid wo F&B Economy
MD US
Maryland by Scale - Demand Percent ChangeJuly 2009 YTD
-10.5
-4.5
-3.5
-6.3-6.4
-2.5
-11.1
-10.1
-11.4
-9.7
-15
-12
-9
-6
-3
0
Upper Upscale Upscale Mid w F&B Mid wo F&B Economy
MD US
Maryland by Scale - Occupancy % ChangeJuly 2009 YTD
-9.7
-7.5
-6.8
-3.7-3.1
-5.5
-4.6
-11.1
-5.4 -5.4
-12
-10
-8
-6
-4
-2
0
Upper Upscale Upscale Mid w F&B Mid wo F&B Economy
MD US
Maryland by Scale – ADR Percent ChangeJuly 2009 YTD
-19.2
-11.7
-10.0 -9.7-9.3-7.8
-15.2
-20.0
-16.1
-14.5
-21
-18
-15
-12
-9
-6
-3
0
Upper Upscale Upscale Mid w F&B Mid wo F&B Economy
MD US
Maryland by Scale - RevPAR Percent ChangeJuly 2009 YTD
3.83.0
0.2
5.6
3.7
7.7
2.1
12.0
3.72.9 3.1
1.7
0
2
4
6
8
10
12
14
Urban Suburban Airport Interstate Resort Small Town
MD US
Maryland by Location - Supply Percent ChangeJuly 2009 YTD
-8.5
-6.1
-4.5
1.1
-0.9
8.6
-6.5
4.2
-5.5-6.7
-8.2-8.6
-10
-5
0
5
10
Urban Suburban Airport Interstate Resort Small Town
MD US
Maryland by Location - Demand Percent ChangeJuly 2009 YTD
-11.8
-8.7
-4.7-4.3 -4.4
0.8
-8.4-7.0
-8.8-9.4
-11.0-10.1
-15
-12
-9
-6
-3
0
3
Urban Suburban Airport Interstate Resort Small Town
MD US
Maryland by Location – Occupancy % ChangeJuly 2009 YTD
-8.0
-2.2
-0.9
-2.7
0.5
-8.2
-1.1
-9.1
-0.9
-12.3
-9.8
-12.0
-14
-12
-10
-8
-6
-4
-2
0
2
Urban Suburban Airport Interstate Resort Small Town
MD US
Maryland by Location - ADR Percent ChangeJuly 2009 YTD
-18.9
-10.9
-5.6-6.9
-3.9
-7.4
-9.4
-15.4
-9.7
-20.5-19.7
-20.9
-24
-21
-18
-15
-12
-9
-6
-3
0
Urban Suburban Airport Interstate Resort Small Town
MD US
Maryland by Location - RevPAR Percent ChangeJuly 2009 YTD
1.8
3.9
4.4
5.1
8.8
1.7
1.6
0 2 4 6 8 10
Atlanta, GA
Philadelphia, PA
Boston, MA
Washington, DC
New York
Baltimore, MD
Richmond, VA
Comparative Markets - Room Supply % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
Larger cities or geographic areas
-6.1
-6.3
-8.7
-10
-11.6
-0.3
1.1
-14 -12 -10 -8 -6 -4 -2 0 2
Baltimore, MD
Washington, DC
New York
Philadelphia, PA
Boston, MA
Richmond, VA
Atlanta, GA
Comparative Markets - Room Demand % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-7.8
-10.1
-10.3
-13
-17.3
-4
-3.8
-21 -18 -15 -12 -9 -6 -3 0
Baltimore, MD
Washington, DC
Philadelphia, PA
New York
Boston, MA
Atlanta, GA
Richmond
Comparative Markets - Occupancy % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-7.3
-7.5
-9.4
-9.8
-24.9
-4.2
-3.4
-27 -24 -21 -18 -15 -12 -9 -6 -3 0
Washington, DC
Richmond, VA
Baltimore, MD
Atlanta, GA
Philadelphia, PA
Boston, MA
New York
Comparative Markets – ADR Percent ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-16.5
-19.1
-19.5
-20.8
-32.5
-10.9
-7.3
-35 -30 -25 -20 -15 -10 -5 0
Washington, DC
Baltimore, MD
Philadelphia, PA
Boston, MA
Atlanta, GA
Richmond, VA
New York
Comparative Markets – RevPAR Percent ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
1.7
3.1
4
6.4
19.2
1.6
0
0 3 6 9 12 15 18 21
Fairfax/TC
Bethesda/CP
DC CBD
Rockville/Fred
Alexandria
Dulles
MD South/East
Comparative DC Tracts - Supply % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-1.2
-0.8
-0.3
0.3
12.8
-1.8
-6.1
-9 -6 -3 0 3 6 9 12 15
Fairfax/TC
Bethesda/CP
Rockville/Fred
Alexandria
Dulles
DC CBD
MD South/East
Comparative DC Tracts - Demand % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-5.3
-4.6
-4.2
-3.3
-1.3
-6.1
-6.3
-8 -6 -4 -2 0
Dulles
Fairfax/TC
MD South/East
Alexandria
Rockville/Fred
Bethesda/CP
DC CBD
Comparative DC Tracts - Occupancy % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-7.6
-4.3
-2.4
-1.8
7.3
-7.9
-12.7
-15 -12 -9 -6 -3 0 3 6 9
Dulles
Fairfax/TC
Bethesda/CP
Rockville/Fred
DC CBD
Alexandria
MD South/East
Comparative DC Tracts – ADR Percent ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-10.7
-8.3
-6.4
-3.7
1.6
-13.5
-18.2
-21 -18 -15 -12 -9 -6 -3 0 3
Dulles
Fairfax/TC
Bethesda/CP
Rockville/Fred
Alexandria
DC CBD
MD South/East
Comparative DC Tracts - RevPAR % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
1.4
1.3
0.8
0
2.5
6.1
0 2 4 6 8
Delaware Area
Myrtle Beach N
Chesapeake/OC
VA Beach
Jersey Shore
NC Coast
Comparative OC Tracts - Supply % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-4.2
-4.7
-5.7
-7.1
-1.8
6.7
-8 -6 -4 -2 0 2 4 6 8
Delaware Area
VA Beach
Jersey Shore
Myrtle Beach N
Chesapeake/OC
NC Coast
Comparative OC Tracts - Demand % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-4.9
-7
-7
-7.1
-3.2
0.8
-8 -6 -4 -2 0 2
Delaware Area
VA Beach
Jersey Shore
Myrtle Beach N
Chesapeake/OC
NC Coast
Comparative OC Tracts - Occupancy % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-2.9
-2.3
-1
0.6
-3.9
-4.1
-6 -4 -2 0 2
Myrtle Beach N
VA Beach
Jersey Shore
Delaware Area
Chesapeake/OC
NC Coast
Comparative OC Tracts - ADR % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-7.7
-6.8
-6.6
-1.7
-7.9
-10.9
-12 -10 -8 -6 -4 -2 0
Myrtle Beach N
Chesapeake/OC
Jersey Shore
VA Beach
NC Coast
Delaware Area
Comparative OC Tracts - RevPAR % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-13.5
-8.3
-7.9
-2.1
0.4
-17
-23
-25 -20 -15 -10 -5 0 5
Wilmington, DE
Suburban VA
Harrisburg/Hershey, PA
York, PA
Baltimore Area
Western MD
West Virgina North
Comparative MD Tracts - RevPAR % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
-17.7
-15.5
-14.2
-9.3
-8.3
-19.2
-28.1
-30 -25 -20 -15 -10 -5 0 5
Atlantic City, NJ
Wilmington, NC
Williamsburg, VA
Charleston, SC
Savannah, GA
Annapolis/BWI
Norfolk
Comparative Annapolis Tracts - RevPAR % ChangeJuly 2009 YTD
2008 Smith Travel Research, Inc.
62.3
43.6
57.7
64.3 64
56.4
60.6
63.865.3
67.2
45.1
67.7
60.9 60.8
40
45
50
55
60
65
70
Sun Mon Tue Wed Thur Fri Sat
July 2008July 2009
Maryland – Occupancy by Day of WeekJuly 2008 YTD vs. July 2009 YTD
112.45113.47
112.16
118.52
119.98
117.8
112.83
108.3 108.06
123.90
114.47
123.37
121.60
118.77
105
110
115
120
125
Sun Mon Tue Wed Thur Fri Sat
July 2008July 2009
Maryland - ADR by Day of Week July 2008 YTD vs. July 2009 YTD
-10
-5
0
5
10
15
1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29
Demand
ADR
Maryland - Demand & ADR Percent ChangeRunning 28 Day (Daily Data) - January 1 – August 29, 2009
-20
-15
-10
-5
0
5
10
1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29
Demand
ADR
Baltimore - Demand & ADR Percent ChangeRunning 28 Day (Daily Data) - January 1 – August 29, 2009
-15
-10
-5
0
5
10
15
20
25
30
35
1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29
Demand
ADR
DC - Demand & ADR Percent ChangeRunning 28 Day (Daily Data) - January 1 – August 29, 2009
-18
-15
-12
-9
-6
-3
0
3
1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29
Demand
ADR
Ocean City - Demand & ADR Percent ChangeRunning 28 Day (Daily Data) - January 1 – August 29, 2009
-20
-10
0
10
20
30
40
50
1/31/08 4/1/08 5/31/08 7/30/08 9/28/08 11/27/08 1/26/09 3/27/09 5/26/09 7/25/09
Group DemandTransient Demand
Maryland - Group & Transient Demand % ChangeRunning 28 Day – January 31, 2008 – August 29, 2009
90
100
110
120
130
140
1/31/08 4/1/08 5/31/08 7/30/08 9/28/08 11/27/08 1/26/09 3/27/09 5/26/09 7/25/09
Group ADR
Transient ADR
Maryland - Group & Transient Absolute ADR Running 28 Day - January 31, 2008 – August 29, 2009
$23
difference
$11
MD Pipeline – New Opens (last year, less 4) – 30 props, 4,005 roomsBaltimore Hilton 757 Aug-08
Oxon Hill Residence Inn 162 Aug-08
Hanover, Arundel Mills TownePlace Suites 109 Oct-08
Waldorf Courtyard 91 Dec-08
Clinton TownePlace Suites 115 Dec-08
Silver Spring Hampton Inn 149 Jan-09
Silver Spring Homewood Suites 90 Jan-09
Baltimore Country Inn & Suites 81 Mar-09
Oxon Hill aloft Hotels 190 Mar-09
Hanover, Arundel Mills Hilton Garden Inn 151 Mar-09
Hanover, Arundel Mills Homewood Suites 99 Mar-09
Baltimore Quality Inn 96 Mar-09
Bel Air Candlewood Suites 95 Mar-09
Hanover, Arundel Mills aloft Hotels 143 May-09
Hanover, Arundel Mills element 147 May-09
Elkridge Holiday Inn Express Hotel 98 Jun-09
Waldorf Residence Inn 98 Jun-09
Ocean City Courtyard 91 Jul-09
Bel Air Homewood Suites 92 Jul-09
Baltimore Kimpton 202 Jul-09
Lexington Park TownePlace Suites 87 Jul-09
Baltimore Fairfield Inn 154 Jul-09
Linthicum Heights aloft Hotels 155 Aug-09
Aberdeen Hilton Garden Inn 96 Aug-09
Cumberland Fairfield Inn 108 Aug-09
Columbia Springhill Suites 117 Aug-09
MD Pipeline – Under Construction, July 2009 – 22 props, 2,552 roomsHilton Garden Inn Aberdeen 96 Sep-09
Holiday Inn Express Baltimore 68 Sep-09
Hilton Garden Inn Bethesda 216 Oct-09
Country Inn & Suites Hanover 86 Oct-09
Residence Inn Hunt Valley 141 Nov-09
Country Inn & Suites California 84 Dec-09
Hotel Indigo Baltimore 135 Dec-09
Comfort Suites Elkton 83 Dec-09
Hilton Garden Inn St Charles 130 Jan-10
Hilton Garden Inn Rockville 112 Jan-10
Homewood Suites Rockville 87 Jan-10
Brexton Hotel Baltimore 30 Jan-10
Courtyard Hagerstown 96 Mar-10
Hilton Garden Inn Silver Spring 104 Apr-10
Staybridge Suites Baltimore 100 Jun-10
Hampton Inn Suites Edgewood 134 Jul-10
Four Points Baltimore 153 Sep-10
Residence Inn Landover 96 Sep-10
Hampton Inn Suites Camp Springs 117 Dec-10
Hampton Inn Suites Columbia 124 Apr-11
Courtyard Hyattsville 104 Apr-11
Four Seasons Baltimore 256 Dec-11
Maryland Pipeline – Planning w/ Proj. Open Date in 2010
2008 Smith Travel Research, Inc.
Holiday Inn Express White Marsh 96 Apr-10
Fairfield Inn Hanover 97 May-10
Holiday Inn Express Aberdeen 85 Jun-10
TownePlace Suites College Park 76 Jul-10
Homewood Suites Columbia 114 Aug-10
Fairfield Inn Linthicum Heights 107 Aug-10
Hampton Inn Owings Mills 101 Aug-10
Courtyard Hyattsville 162 Sep-10
Unnamed Boutique Hotel @ Penn Station Baltimore 72 Dec-10
Staybridge Suites Savage 120 Sep-10
Staybridge Suites Greenbelt 125 Sep-10
Holiday Inn Express Edgewood 90 Sep-10
Holiday Inn Express Cumberland 83 Oct-10
Hampton Inn Suites Baltimore 100 Oct-10
Candlewood Suites Hanover 99 Nov-10
Candlewood Suites Camp Springs 100 Nov-10
Holiday Inn Glen Burnie 130 Dec-10
Holiday Inn Express Linthicum 110 Dec-10
Totals - Final Planning: 12 props, 1,198 rooms; Planning: 48 props, 5,981 rooms; Pre-Planning: 15 props, 1,593 rooms
Total US Projections
US Economic Outlook - Blue Chip Economic IndicatorsJuly 2009
2008 2009F 2010F
Real GDP +1.1% -2.6% +2.0%
CPI +4.0% -0.6% +1.8%
Corporate Profits -8.5% -12.4% +6.7%
Disp Personal Income +1.1% +2.3% +1.6%
Unemployment Rate 5.8% 9.3% 9.9%
Total US - Consecutive Quarterly DeclinesKey Indicators during prior downturns
2008 Smith Travel Research, Inc.
1990/1991
2001/2002
Current(2008-9)
Estimate 2008-10
Demand 3 5 6 9
Occupancy 7 6 7 11
ADR 0 5 3 9?
RevPAR 5 5 4 9
Room Revenue 2 5 4 7
Total US - Active Development Pipeline - RoomsChange From Last Year
Source: STR / TWR / Dodge Construction Pipeline
Phase July 2009 July 2008 Difference % Change
In Construction 141,957 199,892 -57,935 -29.0%
Final Planning 71,116 100,201 -29,085 -29.0%
Planning 274,758 360,835 -86,077 -23.9%
Active Pipeline 487,831 660,928 -173,097 -26.2%
Pre-Planning 118,378 146,131 -27,753 -19.0%
Total 606,209 807,059 -200,850 -24.9%
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2003 2004 2005 2006 2007 2008 JASOND
Total US - Room Supply Percent ChangeJanuary 2003 – June 2009 / July – December Forecast
July: 3.2 vs. 3.1 to December: 2.6
-10
-5
0
5
10
2003 2004 2005 2006 2007 2008 JASOND
Total US - Room Demand Percent ChangeJanuary 2003 – June 2009 / July – December Forecast
1.01.8 1.9
1.0
-1.8
1.3 1.3
-0.1
0.41.3
0.2
3.02.6
4.0
1.3
-5.5
0.5
2.8
-8
-4
0
4
8
2003 2004 2005 2006 2007 2008 2009P 2010P 20 YrAverage
Supply % Chg
Demand % Chg
Total US – Annual Supply/Demand % Change2003 – 2010 Projected
-15
-10
-5
0
5
10
2003 2004 2005 2006 2007 2008 JASOND
Total US - Occupancy Percent ChangeJan 2003 – June 2009 / July – December Forecast
0.4
-0.6
0.3
-4.2
-0.2
3.62.9
-8.4
-10
-5
0
5
2003 2004 2005 2006 2007 2008 2009P 2010P
Total US – Annual Occupancy Percent Change2003 – 2010P
20 Year Average: -0.6%
Total US – Annual Absolute Occupancy 2003 – 2010P
59.2
61.4
63.1 63.3 63.1
60.4
55.4 55.1
50
60
70
2003 2004 2005 2006 2007 2008 2009P 2010P
-15
-10
-5
0
5
10
2003 2004 2005 2006 2007 2008 JASOND
Total US - Room Rate Percent ChangeJan 2003 – June 2009 / July – December Forecast
5.5
-9.7
-3.4
7.5
0.2
2.5
6.1
4.2
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
2003 2004 2005 2006 2007 2008 2009P 2010P
Total US – Annual ADR Percent Change2003 – 2010P
20 Year Average: 3.5%
$86.39$91.14
$97.96
$106.68
$96.43$93.16
$82.94
$103.97
$50
$75
$100
$125
2003 2004 2005 2006 2007 2008 2009P 2010P
Total US – Annual Absolute Average Daily Rate2003 – 2010P
-25
-20
-15
-10
-5
0
5
10
15
20
2003 2004 2005 2006 2007 2008 JASOND
Total US - RevPAR Percent ChangeJan 2003 – June 2009 / July – December Forecast
7.8
-4.0
-17.1
5.7
-1.8
8.57.9
0.5
-20
-15
-10
-5
0
5
10
2003 2004 2005 2006 2007 2008 2009P 2010P
Total US - Annual RevPAR Percent Change2003 – 2010P
20 Year Average: 2.9%
$53.02
$57.55
$62.03
$53.40$51.26
$65.62
$49.14
$64.44
$25
$50
$75
2003 2004 2005 2006 2007 2008 2009P 2010P
Total US - Annual Absolute RevPAR2003 – 2010P
-0.6
-9.7
-5.5
-8.4
-17.1
3.01.8
-3.4
1.3
-4.0
-20
-15
-10
-5
0
5
10
Supply Demand Occ ADR RevPAR
2009 F 2010 F
Total United StatesKey Performance Indicators Percent ChangeFull Year 2009 2010 Forecast
Takeaways
• Visibility remains difficult• Decline is global• Demand probably at or near bottom, September &
October will be critical• Turn around will be slow• “Less Worse” in 2nd half of 2009 (comps easier)• Marginal improvement in 2010• Time to earn “your keep”• Not time to have RMS on “auto pilot”
• Look for ways to create value• Change in the mix, maximize experience
615-824-8664 ext. 3315
www.strglobal.com
Presentation Available on
www.hotelnewsnow.com
“Industry Presentations”
-15
-10
-5
0
5
10
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
RevPAR % Chg
-2.7%
Total US - RevPAR Percent ChangeTwelve Month Moving Average – 1989 to July 2009
2008 Smith Travel Research, Inc.
-10.5%-13.4%
-20
-15
-10
-5
0
5
10
1/31/09 4/1/09 5/31/09 7/30/09 9/28/08 11/27/08 1/26/09 3/27/09 5/26/09 7/25/09
Group ADR
Transient ADR
Total US - Group & Transient ADR % ChangeRunning 28 Day - January 31, 2008 – August 15, 2009
Transient ADR falling sharper
130
140
150
160
170
180
190
1/31/09 4/1/09 5/31/09 7/30/09 9/28/08 11/27/08 1/26/09 3/27/09 5/26/09 7/25/09
Group ADR
Transient ADR
Total US - Group & Transient Absolute ADR Running 28 Day - January 31, 2008 – August 15, 2009
Group ADRsurpassesTransient ADR
Top 25 Markets vs. Rest of US - Quarterly RevPar % Change1st Quarter 2007 – 2nd Quarter 2009
5.97.4
2.5 2.80.8
-10.7
-19.8
-22.6
-2.2
7.96.4
-17.2-16.1
-9.0
0.41.7
4.65.65.24.9
-25
-20
-15
-10
-5
0
5
10
1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09
Top 25
Rest of U.S.
Top 25 rise faster butalso fall farther
-32.5
-18.7
-40
-30
-20
-10
0
Top 25 Markets - RevPAR Percent ChangeJune 2009 YTD
Most of Top 25 markets below US average
0
500
1000
1500
2000
2500
-40% -10to -12.5
+ 2.5- 0
25%
Total US - Occupancy Percent ChangeNumber of Properties - June 2009 YTD
Industry average: - 10.9
0
500
1000
1500
2000
2500
3000
3500
-40% -7.5 --10.0
0 -2.5
25%
Total United States ADR Percent ChangeNumber of Properties - June 2009 YTD
Industry average: - 8.7
-12
-8
-4
0
4
8
1988q1 1991q1 1994q1 1997q1 2000q1 2003q1 2006q1 2009q1
Demand % Chg
ADR % CHG
Total US - Hotel Rooms Sold vs. ADR ChangeQuarterly Change – 1988 to Q4 2009E
86.41 91.16 104.08 106.72 96.37 94.3984.0785.30 98.0082.9682.82
$87.73$89.11
$91.15
$93.57
$96.74
$99.86
$105.90$107.81$106.65
$85.30
$102.71
80
90
100
110
Nominal ADRYr 2000, Grown by CPI
If year 2000 ADR had increased by CPI each year…
Total US Room RatesActual vs. Inflation Adjusted2000 – 2010E
3
-4.5
-7.3
2
0.2
-1.8
1.7
2.6
0.91.3
3
1.7
-0.8
-3.4
2.72.4
-3.3
-1.0
-10
-5
0
5
Supply Demand Occupancy
Total United StatesSupply, Demand & Occupancy ForecastQ3 2009 – Q4 2010
2008 Smith Travel Research, Inc.
-11
-17.5
-15
-4.4
-6.1
-4.2
-2.2-1.3
0.4
-1.5
0.2
1.5
-13.0
-10.6-9.9
-5.6-6.5
-8.7
-20
-15
-10
-5
0
5
ADR RevPar Revenue
Total United StatesADR, RevPar and Room Revenue ForecastQ3 2009 – Q4 2010
2008 Smith Travel Research, Inc.
• Budgets and forecasts impossible to manage
• Risk cannibalising existing business and damage to brand • In an upmarket, everyone follows the best practices of the market leader, in a downturn everyone follows the first person to panic
• Smaller properties cannot make up in volume what they lose in rate
• Decisions are based on competitors’ actions rather than hotel’s strategic initiatives and revenue needs
• Ability to manipulate behaviour using price severely limited in a falling market
• Discounting often ‘doubles up’ the loss of occupancy and rate
• Profitability is often overlooked and can be adversely affected by reductions
• Markets take years to recover
The Impact of Discounting