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  • © 2018 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.

    U.S. & Oregon Market Hotel Industry Overview

    ORLA Hospitality Conference September 17, 2019

    Chase Oeser, CHIA Sr. Business Development Executive, Hotels

    [email protected]

  • © 2018 STR. All Rights Reserved.

    www.hotelnewsnow.com Data Dashboard>View All Data Presentations

  • © 2018 STR. All Rights Reserved. 3

    •  Total US Review •  Oregon Overview

    •  Oregon Markets •  Pipeline

    •  Forecast •  Odd & Ends •  Time for Q&A

    Agenda

  • The Center of the Hotel Industry Benchmarking Universe:

    Hendersonville, TN

  • © 2018 STR. All Rights Reserved. 5

    STR Building Blocks

    Supply (rooms available)

    Demand (rooms sold)

    Revenue (rooms revenue)

    OCC ADR RevPAR

  • © 2018 STR. All Rights Reserved.

    Total U.S. Review

  • © 2018 STR. All Rights Reserved. 7 July 2019, Total US Results

    RevPAR +1.1%

    July 2019

    Transient RevPAR +0.8%

    July Room Demand 122 Million

    In Construction Rooms 8.3%

    Group RevPAR -0.2%

    ADR +0.7%

  • © 2018 STR. All Rights Reserved.

    I don’t always like Calendar Shifts…

    …but when I do I prefer 5 Wednesdays

    July RevPAR +1.1%

  • © 2018 STR. All Rights Reserved.

    July 2019: Monthly RevPAR Hits

    $100 First Time Ever!

  • © 2018 STR. All Rights Reserved. 10

    July 2019: Growth is Growth (Even When It’s Small)

    % Change Room Supply 2.0% Room Demand 2.4% Occupancy 73.8% 0.4%

    ADR $135 0.7% RevPAR $100 1.1%

    Room Revenue 3.2%

    Total US Results, July 2019

  • © 2018 STR. All Rights Reserved. 11

    July YTD 2019: The No Growth / Slow Growth Story Continues

    % Change Room Supply 2.0% Room Demand 2.1% Occupancy 67.1% 0.1%

    ADR $132 1.1% RevPAR $88 1.2%

    Room Revenue 3.2%

    Total US Results, July YTD 2019

  • © 2018 STR. All Rights Reserved. 12

    Number of Months with Positive ADR % Change of Less Than 1%

    2011 – 2018

    0 YTD 2019

    5

  • © 2018 STR. All Rights Reserved. 13

    12 MMA July 2019: Persistent Weak ADR Change

    Highest Ever? % Change

    Room Supply þ 2.0% Room Demand þ 2.1% Occupancy ý 66.2% 0.1%

    ADR þ $131 1.5% RevPAR þ $87 1.6%

    Room Revenue þ 3.6%

    Total US Results, 12 MMA July 2019

  • © 2018 STR. All Rights Reserved. 14

    Quarterly RevPAR Growth: Results Positive, But Slowing

    0

    2

    4

    6

    8

    10

    Q1 '14 Q1 '15 Q1 '16 Q1 '17 Q1 '18 Q1 '19

    *Total U.S., Quarterly RevPAR % Change, Q1 2014 – Q2 2019

  • © 2018 STR. All Rights Reserved. 15

    Supply & Demand Growth In Equilibrium Will Drive 2019 /2020 Results

    -0.7

    -4.7

    -7.1

    7.8

    -8

    -4

    0

    4

    8

    1990 2000 2010

    Supply % Change

    Demand % Change

    Total U.S., Supply & Demand % Change, 12 MMA 1/1990 – 07/2019

  • © 2018 STR. All Rights Reserved. 16

    RevPAR Growth: Longest RevPAR Upcycle (with two small interruptions)

    -25

    -15

    -5

    5

    15

    1990 2000 2010

    Total U.S., RevPAR % Change, 1/1990 – 07/2019

    56 Months 111 Months (out of 113) 111 Months (out of 112)

  • © 2018 STR. All Rights Reserved. 17

    What Should Worry us? ~835,000 Open Positions in Accommodations /Food Service…

    0

    200

    400

    600

    800

    1,000

    1/1/2012 1/1/2014 1/1/2016 1/1/2018

    Total U.S., Accommodation and food services, Job openings, seasonally adjusted, https://www.bls.gov/data/#employment

    (‘000s)

  • © 2018 STR. All Rights Reserved. 18

    .. And The Fight For Talent Drives Up Hourly Wages

    $14.53

    $15.16

    $12

    $13

    $14

    $15

    $16

    Jan-12 Jan-14 Jan-16 Jan-18

    +4.3% YOY

    Total U.S., Leisure and hospitality, Accommodation, Average hourly earnings of production and nonsupervisory employees, not seasonally adjusted https://www.bls.gov/data CEU7072100008

  • © 2018 STR. All Rights Reserved.

    Class Review

  • © 2018 STR. All Rights Reserved. 20

    Class: Supply Growth Will Impact Results Going Forward

    2.7 2.5

    3.6 3.7

    1.1

    -0.4

    2.6

    1.7

    3.1 3.6

    1.0 0.7

    Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

    Supply % Change Demand % Change

    *Supply / Demand % Change, by Class, YTD July 2019

  • © 2018 STR. All Rights Reserved. 21

    Class RevPAR Results: Growth (But Barely)

    1.1

    0.7 0.4

    0.7

    0.2

    1.6

    Luxury Upper Upscale Upscale Upper Midscale Midscale Economy *RevPAR % Change, by Class, YTD July 2019

  • © 2018 STR. All Rights Reserved. 22

    Class Occupancy: Occupancy Will Remain Flat (Or Decline) In 2019

    71.9 73.7 72.5

    68.6

    60.8 60.3

    72.0 74.3

    72.8

    68.7

    60.8 59.6

    Luxury Upper Upscale Upscale Upper Midscale Midscale Economy

    2019 2018

    *OCC %, by Class, YTD July 2019 & 2018

  • © 2018 STR. All Rights Reserved.

    Segmentation

  • © 2018 STR. All Rights Reserved. 24

    Transient Performance: ADR Growth Now Below 2%

    0%

    1%

    2%

    3%

    4%

    Jan-18 Jan-19

    Demand % Change

    ADR % Change

    *Transient Demand and ADR % Change, 12 MMA, 1/2018 – 07/2019

  • © 2018 STR. All Rights Reserved. 25

    Group Performance: ADR Growth Holds Steady – For Now

    -2%

    -1%

    0%

    1%

    2%

    3%

    4%

    Jan-18 Jan-19

    Demand % Change

    ADR % Change

    *Group Demand and ADR % Change, 12 MMA, 1/2018 – 07/2019

    Easter Shift

    Easter Shift

  • © 2018 STR. All Rights Reserved. 26

    Segmentation ADR % Change: Transient ADR Growth Noticeably Weaker Than Group ADR Growth

    0.0%

    1.0%

    2.0%

    3.0%

    Jan-18 Jan-19

    Transient ADR % Change

    Group ADR % Change

    *ADR % Change, Transient & Group, 12MMA, 1/2017 – 07/2019

  • © 2018 STR. All Rights Reserved.

    Oregon Markets

  • © 2018 STR. All Rights Reserved. 28

    Portland, OR Submarkets

    Tucson/East

    North/West

    South/Airport

  • © 2018 STR. All Rights Reserved. 29

    Oregon Area Submarkets

    Tucson/East

    North/West

    South/Airport

  • © 2018 STR. All Rights Reserved. 30

    Oregon YTD July 2019: Demand Outpacing Supply

    Total OR Results, July 2019 YTD

    % Change Room Supply 2.6% Room Demand 2.9% Occupancy 65.9% 0.2%

    ADR $123 0.4% RevPAR $81 0.6%

    Room Revenue 3.3%

  • © 2018 STR. All Rights Reserved. 31

    Portland, OR YTD July 2019:

    Total Portland, OR Results, July 2019 YTD

    % Change Room Supply 4.5% Room Demand 3.4% Occupancy 72.7% -1.0%

    ADR $135 -0.2% RevPAR $98 -1.2%

    Room Revenue 3.2%

  • © 2018 STR. All Rights Reserved. 32

    Oregon Area YTD July 2019:

    Total Oregon Area Results, July 2019 YTD

    % Change Room Supply 1.7% Room Demand 2.4% Occupancy 61.2% 0.7%

    ADR $112 0.9% RevPAR $68 1.6%

    Room Revenue 3.3%

  • © 2018 STR. All Rights Reserved. 33

    Oregon Market Overview

    Oregon

    0.2%

    0.4%

    -1.0%

    -0.2%

    0.7%

    0.9%

    Occ

    ADR Oregon Markets, July 2019 YTD

    Portland Oregon Area

    San Jose/ Santa Cruz

  • © 2018 STR. All Rights Reserved. 34

    Portland, OR Submarkets:

    Portland, OR Submarkets, July 2019 YTD, Absolute and % Change

    Beaverton/Sunset Hwy West, OR 71.3% 1.5% $128 4.3% $91 5.9% Lake Oswego/I-5 South, OR 70.9% -0.2% $120 0.8% $85 0.6% Portland Airport/Vancouver, OR-WA 71.8% -2.2% $117 0.5% $84 -1.7% Portland CBD, OR 77.0% -2.2% $172 -2.5% $133 -4.6% Portland I-84/I-205 East, OR 67.0% 1.5% $95 -1.3% $64 0.2%

    Submarket Occ Change ADR Change RevPAR Change

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