Lodging Industry Update The Pulse of the Hospitality Industry - PowerPoint PPT Presentation

21 st Annual Lodging Industry Update The Pulse of the Hospitality Industry Pinkowski & Company Metropolitan Memphis Hotel & Lodging Association HotelNewsNow.com STR February 22, 2019 Memphis, Tennessee

21 th Annual Lodging Industry Update Presented by:

Wayne Tabor President/CEO MMHLA

Lodging Industry Update Program Introduction Wayne Tabor – President MMHLA Doug Browne – Chairman MMHLA Memphis Lodging Market Chuck Pinkowski – Pinkowski & Company Convention Center Update/Memphis Tourism Rebranding Kevin Kane, CEO – Memphis Tourism State of the National Lodging Market Jeff Higley – HotelNewsNow a division of STR, Inc. Keynote Speaker Mitch Patel -President & CEO, Vision Hospitality Group, Inc

Thank You to Our Sponsors

Doug Browne Chairman MMHLA President, Peabody Hotels & Resorts

Chuck Pinkowski Pinkowski & Company

In Case You Missed it Memphis

In Case You Missed it Memphis • Travel Lemming called Memphis “the next hot Southern City” • Travel Channel – “Hottest Southern Destination of 2019” • Trip Savvy named Memphis the Best Overall Travel Destination of 2019”

Source: Bureau of Labor Statistics

Memphis Development Activity • Brooks Museum • Riverfront Park • Loews Convention Center Hotel • St Jude Expansion • Union Row • One Beale • FedEx Logistics/Gibson Guitar • Grove @ GPAC • Pink Palace Reopening • Sports – Football/Soccer

Big Things Are Happening In Memphis BICENTENNIAL MEMPHIS MAKES FROMMER’S LIST OF PLACES TO VISIT IN 2019 AIRPORT IMPROVEMENTS CONVENTION CENTER RENOVATION OVER $8.0 BILLION CAPITAL INVESTMENT

Data Provided by

What Makes a Healthy Hospitality Market

Economic Impact At a Glance • 11.7 million visitors • $3.5 billion annual visitor expenditures • 67,900 hospitality/leisure jobs • $1.51b MSA wages • $514 average nightly spending • 67% first time visitors

Memphis Lodging Market

Continuing the Positive Trend (just barely) Another Record Breaking Year What Is On The Horizon For 2019 & Beyond 2014 2015 2016 2017 2018 12.5% 4.2% 4.3% 5.1% 0.1% % RevPAR Change

P&C Forecast vs Actual – 2018 Definitely Not An Exact Science Forecast Actual • Occ 65.0% (-0.3%) 64.9% (0.4%) • ADR $99.25 (3.6%) $96.38(0.5%) • RevPAR $64.52 (3.2%) $62.56(0.1%) What happened to ADR ?

Memphis Lodging Market How good was 2018 vs 2017 2018 Recap Room Supply Continues to Every Day Grow (+120,124) 157 more rooms sold Revenue up $22,049 Rooms Sold - Most Ever Sold For the Year Revenue - Highest on Record 57,226 more rooms sold* ADR +0.5% over 2017 $8,047,818 more in revenue** OCC -0.4% over 2017 *¼ the increase of 2017 **21% of 2017 increase

Memphis Lodging Market Key Statistics YE 2018 YE 2017 % Change Room Supply (Daily) 23,421 23,092 1.4% Room Demand (Daily) 15,204 15,046 1.0% Room Revenue (Daily) $1,465,308 $1,443,259 1.5% Occupancy 64.9% 65.2% -0.4% ADR $96.38 $95.92 0.5% RevPAR $62.56 $62.50 0.1%

Memphis Lodging Market Total Revenue $550,000,000 Revenues Stagnating? $500,000,000 $450,000,000 +58% $400,000,000 $350,000,000 $300,000,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market % Change Key Indicators 15.0% 12.4% Supply Demand Revenue ADR 10.0% 7.6% 6.4% 6.3% 5.6% 5.6% 5.4% 4.1% 3.6% 3.4% 5.0% 2.7% 2.4% 2.2% 1.8% 1.5% 1.4% 1.4% 1.1% 1.0% 0.5% 0.5% 0.3% 0.0% -0.2% -0.7% -5.0% 2013 2014 2015 2016 2017 2018

Memphis Lodging Market Change in Room Night Demand by Month Over Prior Year 50,000 40,000 30,000 20,000 10,000 0 -10,000 -20,000 2016 2017 2018 -30,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Memphis Lodging Market Monthly for 2018 $110 $108.18 Memphis ADR Occ 95% in May $105 $101.22 85% $100 $98.82 $98.20 $97.51 $95.46 75% $95 $93.79 $92.88 $93.07 73.3% $91.79 $91.41 70.0% 69.8% 69.3% 68.7% $90.06 67.9% 67.8% 65% $90 65.5% 61.9% 58.0% 55% $85 54.8% 51.5% $80 45% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Memphis Lodging Market Monthly ADR Comparison 2018/2017 $110 2017 2018 $108.18 $105 $104.58 $101.22 $100 $98.82 $98.20 $98.15 $98.21 $97.74 $97.51 $97.40 $96.69 $96.32 $95 $95.46 $93.79 $93.38 $93.33 $93.07 $92.88 $92.23 $91.88 $91.79 $91.41 $90 $90.06 $86.59 $85 $80 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 4 of last 5 months in 2018 had lower ADR

Memphis Lodging Market 12 Month Moving Average Supply/Demand 9,000,000 Peak Supply 12/2018 8,500,000 6.8 % increase 8,000,000 7,500,000 7,000,000 6,500,000 6,000,000 Peak Demand 12/2018 5,500,000 5,000,000 28.0% increase 4,500,000 4,000,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 Supply Demand

Memphis Lodging Market 12 Month Moving Average Supply/Demand 9,000,000 8,500,000 8,000,000 7,500,000 7,000,000 6,500,000 6,000,000 5,500,000 5,000,000 4,500,000 2014 2015 2016 2017 2018 Supply Demand

Memphis Lodging Market 12 MMA Demand 5,600,000 5,500,000 5,400,000 5,300,000 5,200,000 5,100,000 2015 2016 2017 2018 5,000,000 j f m a m j j a s o n d

Memphis Lodging Market Supply/Demand 9,000,000 8,426,113 8,377,658 8,500,000 8,000,000 7,500,000 7,000,000 6,500,000 6,000,000 5,494,494 5,500,000 5,000,000 4,304,951 4,500,000 Supply Demand 4,000,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market Monthly Room Nights 525,000 475,000 425,000 375,000 325,000 jan feb mar apr may june july aug sept oct nov dec 2013 2014 2015 2016 2017 2018

Memphis Lodging Market Change in Room Night Supply & Demand 418,421 425,000 312,101 325,000 215,374 208,375 200,130 225,000 120,124 110,120 94,805 90,957 86,966 65,313 57,226 125,000 25,239 24,637 25,000 -12,462 -35,514 -75,000 -175,000 -175,438 -183,559 Demand Supply -275,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 Supply outpaces demand growth

Memphis Lodging Market Average Daily Change - Supply/Demand 1,500 1146 932 855 1,000 724 600 571 541 444 500 329 302 260 249 238 179 157 69 68 55 0 -34 -97 -305 -500 -481 -503 -812 Supply Demand -1,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market vsTotal U.S. % Change 2018 vs 2017 Memphis U.S. Room Supply 1.4% 2.0% Room Demand 1.0% 2.5% Room Revenue 1.5% 5.0% Occupancy -0.4% 0.5% ADR 0.5% 2.4% RevPAR 0.1% 2.9%

Memphis Lodging Market % Change Occ ADR Demand Supply 6.5% 5.5% 4.5% What is 3.5% this trend? 2.5% 1.5% 0.5% -0.5% -1.5% -2.5% 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market % Change Key Indicators 11.5 9.7 9.5 7.5 6.5 6.4 7 6.3 5.6 5.5 4.2 4.1 4.1 3.7 3.7 3.3 2.6 3.5 2.4 2.2 1.8 1.7 1.4 2 1.4 1.4 1.1 0.7 1.5 0.5 0.5 1 0.3 0.3 0.2 -0.5 -0.07 -0.2 -0.4 -2.5 -2 -2.1 -2.2 -4.5 -5.2 -6.5 2010 2011 2012 2013 2014 2015 2016 2017 2018 Supply Demand Occupancy ADR

Memphis Lodging Market Average Rate $105.00 +$0.46 $100.00 $95.00 $90.00 $85.00 $96.38 $95.92 $80.00 $92.75 $89.52 $75.00 $84.15 $84.21 $81.91 $79.71 $78.82 $78.00 $76.20 $70.00 $74.90 $74.70 $69.16 $65.00 $60.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market Occupancy 70.0% 65.0% 60.0% 65.2% 65.0% 64.9% 64.1% 63.7% 63.4% 63.4% 62.3% 61.0% 60.9% 55.0% 58.4% 56.4% 56.4% 52.7% 50.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market RevPAR $70 +$0.06 $65 $60 $55 $62.50 $62.56 $50 $59.49 $57.01 $54.73 $45 $51.03 $48.64 $48.30 $47.46 $47.50 $43.86 $43.77 $42.12 $40 $41.54 $35 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market 12 Month Moving Avg Revenue Plateau? $525,000,000 $475,000,000 $425,000,000 57.6% -12.5% $375,000,000 $325,000,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market 12 MMA RevPAR $65.00 Stagnant $60.00 $55.00 +42.1% $50.00 $45.00 $40.00 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market RevPAR % Change 25.0% 20.0% 5 monthly declines in 2018 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market RevPAR Growth 25 20 15 10 5 0 -5 -10 -15 108 months with only 20 negative months of RevPAR Growth – 1/2010 thru 12/2018 (2 in 2017/5 in 2018) -20 2010 2011 2012 2013 2014 2015 2016 2017 2018

Memphis Lodging Market RevPAR Composition- % Change by Contribution 14 12 10 8 1.4 5.6 6 4.1 0.3 4 7 6.5 3.4 2 4.2 3.7 3.7 2.2 6.3 0.5 1.6 0.7 0.2 0 -0.4 -2 -2 -4 2010 2011 2012 2013 2014 2015 2016 2017 2018 Occ ADR