GREATER TORONTO HOTEL ASSOCIATION PKF CONSULTING AND CBRE HOTELS - - PowerPoint PPT Presentation

GREATER TORONTO HOTEL ASSOCIATION PKF CONSULTING AND CBRE HOTELS’ OUTLOOK FOR THE CANADIAN LODGING SECTOR 2015/2016 September 15, 2015

Economic and Travel Outlooks

2.4% 1.4% 2.2%

National Economic Outlook - 2015/16

$1.58 $1.54 $1.59 $1.63 $1.66 $1.70 $1.74 $1.77 $1.80

• 3.0%
• 2.0%
• 1.0%

0.0% 1.0% 2.0% 3.0% 4.0% 1.45 1.5 1.55 1.6 1.65 1.7 1.75 1.8 2008 2009 2010 2011 2012 2013 2014 2015f 2016p % Change Real GDP % Change Source: Statistics Canada, Conference Board of Canada, Canadian Outlook Summer 2015, Scotiabank Group – Global Forecast Update 2015; CIBC World Markets – Monthly FX Outlook, 2015; RBC – Economic and Financial Market Outlook – 2015 Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Source: Canadian Tourism Research Institute, Conference Board of Canada, Fall 2015 Forecast

National Travel Outlook 2015/16

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Overnight Travel 2014 Actual 2015 Forecast 2016 Projection

Business Travel Domestic 2.5% 0.3% 2.7% Pleasure Travel Domestic 2.4% 2.7% 2.2% Total Domestic Travel 2.0% 2.1% 2.1% U.S. Travel 1.1% 7.5% 3.2% Overseas Travel 9.3% 5.0% 4.1% TOTAL OVERNIGHT TRAVEL 2.2% 2.7% 2.3% National Accommodation Demand Growth 3.2% 1.0% 2.4%

Regional Travel Outlooks - % Growth

Western Canada Central Canada Atlantic Canada

Source: Canadian Tourism Research Institute, Conference Board of Canada, Fall 2015 Forecast 1.7% 1.9% 1.6% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 2015f 2016f 2017f 3.0% 2.3% 2.6% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 2015f 2016f 2017f 2.4% 2.4% 2.7% 2.2% 2.3% 2.4% 2.5% 2.6% 2.7% 2.8% 2015f 2016f 2017f Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

National Outlook 2014/2015

National Supply & Demand Outlook

2014 2016f 2015p

0.6% 3.2% 1.5% 1.0% 1.3% 2.4% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% Supply Demand Percent Growth

Supply & Demand Growth

2014 2015p 2016f

National Occupancy

2014 Actual 64% 2015 Forecast 64% 2016 Projection 65%

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

National ADR, RevPar & Bottom Line Outlook

$10.8 $11.6 $12.5 $8.0 $8.5 $9.0 $9.5 $10.0 $10.5 $11.0 $11.5 $12.0 $12.5 $13.0 2014 2015p 2016f Adjusted Net Operating Income per Available Room ($000's)

ANOI Growth

National ADR Growth

2014 Actual 3.7% 2015 Forecast 3.9% 2016 Projection 3.5%

National RevPar

Growth

2014 Actual 6.3% 2015 Forecast 3.4% 2016 Projection 4.7%

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Regional Market and Financial Outlooks

Regional RevPar Outlook

4.1% 5.3% 4.4%

2014 2015f 2016p

2015 RevPar Growth

Western 0.9% Central 6.1% Atlantic 1.8%

2016 RevPar Growth

Western 4.1% Central 5.3% Atlantic 4.4%

$92 $86 $72 $94 $92 $73 $97 $96 $77

$50 $55 $60 $65 $70 $75 $80 $85 $90 $95 $100 West Central Atlantic RevPAR ($) Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Regional Bottom Line Outlook

6.0% 10.8%

2014 2015f 2016p

8.1%

2015 ANOI Growth

Western (0.2%) Central 16.7% Atlantic 5.4%

2016 ANOI Growth

Western 6.0% Central 10.8% Atlantic 8.1%

$14.5 $8.6 $7.1 $14.5 $10.1 $7.5 $15.4 $11.1 $8.1

$0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0

West Central Atlantic

Adjusted Net Operating Income per Available Room ($000's)

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Major Market Outlooks

Major Market Outlooks* RevPar Projection - 2016

> 5% RevPar Growth 4 - 5% RevPar Growth < 1% RevPar Growth

* ‘Major Markets’ refer to Greater Metro Areas

• 10.0%
• 8.0%
• 6.0%
• 4.0%
• 2.0%

0.0% 2.0% 4.0% 6.0% Vancouver Toronto Halifax Niagara Falls Ottawa Montreal Quebec City Winnipeg

• St. John’s

Saskatoon Calgary Edmonton Regina

2016 RevPAR Ranking

Vancouver $126 Ottawa $116 Montreal $114 Toronto $107

• St. John’s

$107 Quebec City $105 Calgary $104 Saskatoon $99 Niagara Falls $97 Halifax $87 Edmonton $83 Winnipeg $81 Regina $73

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Economic and Travel Outlook for the GTA

2014 Actual 2015 Forecast 2016 Projection

Manufacturing Employment (3.1%) 0.2% 2.1% Construction Employment (2.3%) 5.4% 4.6% Service Sector Employment 0.4% 1.9% 2.4% GDP Growth 2.9% 3.1% 3.2%

Source: Conference Board of Canada

GTA Economic Indicators

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2014 Estimate 2015 Forecast 2016 Projection

Business Travel Overnight Domestic 1.8% 3.6% 1.7% Pleasure Travel Overnight Domestic 2.3% 7.0% 0.4% U.S. Overnight Travel 0.4% 5.7% 1.7% Overseas Overnight Travel 11.4% 7.1% 4.0% TOTAL OVERNIGHT TRAVEL

2.6% 4.3% 1.9% DEMAND GROWTH 2.5% 2.7% 2.2%

GTA Travel Indicators

Source: Canadian Tourism Research Institute, Conference Board of Canada, Spring 2015 Forecast Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Major Conventions 2016

Conventions* Occupied Room Nights

National Basketball Association (February) 27,720 Little Native Hockey League (March) 10,000 Government Finance Officers Association (May) 13,530 Confidential Corporate Meeting (May) 17,500 Confidential Meeting (June) 13,020 Microsoft Corporation 65,930

*Only lists conventions of 10,000+ ORN Source: Tourism Toronto

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

PanAm Games Impact Month of July

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Occupancy ADR RevPAR

Downtown Toronto (4.2) 9.0% 3.3% Toronto Airport 7.4 5.8% 16.9% GTA West 4.6 12.8% 20.0% GTA East/North 3.1 8.5% 13.4% Greater Toronto Area (GTA) 1.3 7.2% 9.1%

GTA Overall & Sub-Markets Market & Financial Outlooks

Note: Room supply is year round supply greater than 29 rooms.

GTA Accommodation Supply & Demand

2 4 6 8 10 12 14 16 18 2011 2012 2013 2014 2015 (f) 2016 (p) Room Supply and Demand (000s) Supply Demand

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2013 2014 2015F 2016P

TOTAL GTA Rooms Occupancy ADR RevPar 43,505 68% $134 $91 43,160 70% $139 $97 44,360 70% $145 $102 44,845 71% $151 $107

%chg 2013 2014 2015F 2016P

Supply Demand ADR RevPar 0.6% 3.0% 2.7% 5.2% (0.8%) 2.6% 3.7% 7.2% 2.8% 2.7% 4.3% 4.2% 1.1% 2.2% 4.5% 5.6%

Market Outlook – GTA Overall

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2013 2014 2015F 2016P

DOWNTOWN Rooms Occupancy ADR RevPar 16,770 74% $168 $125 16,816 75% $177 $132 17,350 74% $187 $137 17,754 74% $196 $144

%chg 2013 2014 2015F 2016P

Supply Demand ADR RevPar (0.4%) 0.0% 4.1% 4.5% 0.3% 0.7% 5.3% 5.7% 3.2% 1.6% 5.5% 3.9% 2.3% 2.5% 5.0% 5.2%

Market Outlook – Downtown Toronto

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2013 2014 2015F 2016P

AIRPORT Rooms Occupancy ADR Revpar 8,121 71% $107 $76 8,121 73% $112 $82 8,121 74% $117 $87 8,121 74% $122 $91

%chg 2013 2014 2015F 2016P

Supply Demand ADR Revpar 1.9% 5.4% (1.0%) 2.5% 0.0% 2.5% 4.6% 7.3% 0.0% 1.5% 4.5% 6.1% 0.0% 0.0% 4.5% 4.5%

Market Outlook – GTA Airport

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2013 2014 2015F 2016P

WEST Rooms Occupancy ADR Revpar 8,505 63% $106 $67 8,384 67% $108 $73 8,524 68% $113 $76 8,605 69% $117 $81

%chg 2013 2014 2015F 2016P

Supply Demand ADR Revpar 0.9% 5.1% 2.4% 6.6% (1.4%) 5.7% 1.8% 9.1% 1.7% 2.5% 4.0% 4.8% 1.0% 3.0% 4.0% 6.1%

Market Outlook – GTA West

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

2013 2014 2015F 2016P

EAST/NORTH Rooms Occupancy ADR RevPar 10,109 61% $115 $70 9,839 65% $116 $75 10,365 65% $118 $77 10,365 67% $122 $82

%chg 2013 2014 2015F 2016P

Supply Demand ADR RevPar 0.9% 5.8% 3.7% 8.7% (2.7%) 3.2% 1.1% 7.2% 5.3% 6.0% 2.2% 2.8% 0.0% 3.0% 3.0% 6.1%

Market Outlook – GTA East/North

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

$9.6 $10.9 $11.6 $12.5 $7.3 $8.6 $10.1 $11.2 $9.1 $9.8 $10.9 $12.2 $12.6 $13.8 $14.8 $16.5

• $1

$1 $3 $5 $7 $9 $11 $13 $15 $17 2013 (a) 2014 (a) 2015 (f) 2016 (p) Net Income Per Available Room ($000's)

National Central Canada GTA Downtown Toronto

Financial Outlook – GTA

Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to Disclaimer and Restrictions as detailed at www.pkfcanada.com

Concluding Remarks

PKF Consulting Canada

www.pkfcanada.com

PKF CONSULTING David Larone Brian Stanford Fran Hohol Erin O’Brien Rebecca Godfrey David Ferguson Kirstin Hallett Nicole Nguyen Robert Sedore Gregory Hives Lauren Arnold Kailey Gomez Carol Lopes JoAnne Orr CBRE HOTELS VALUATION & ADVISORY Brian Flood Cindy Schoenauer Vanessa Boland CBRE HOTELS BROKERAGE Bill Stone Greg Kwong Deborah Borotsik Karina Toome Marc-Aurele Mailloux- Gagnon