Lodging Industry Update Year End 2015 Pinkowski & Company - - PowerPoint PPT Presentation

18th Annual Lodging Industry Update Year End 2015

Pinkowski & Company Metropolitan Memphis Hotel & Lodging Association HotelNewsNow.com STR

February 12, 2016 Memphis, Tennessee

18th Annual Lodging Industry Update

Presented by:

Lodging Industry Update

Program

Invocation - John Rucker, Key Magazine Introduction Wayne Tabor – President MMHLA Chuck Pinkowski – Pinkowski & Company Economics of the Hospitality Industry Isaac Collazo –VP Performance Strategy & Planning InterContinental Hotels Group Health of Hotels in Memphis Chuck Pinkowski – Pinkowski & Company State of the National Lodging Market Jeff Higley – HotelNewsNow.com An Interview with Lee Hunter Chief Operating Officer – Hunter Hotel Advisors

Invocation

John Rucker

Key Magazine

Wayne Tabor

President MMHLA

Thank You to Our Sponsors

Chuck Pinkowski

Economics of the Hospitality Industry

Isaac Collazo VP Performance Strategy & Planning InterContinental Hotels

10

Economic and Lodging Industry Update

February 2016

11

RevPAR

6.6% 5.2% 8.1% 6.3% 2012 2013 2014 2015

United States

Oxford Economics

(20%) (10%) 0% 10% 20% 30% Brazil China France Australia Canada UK India World US Germany Eurozone Spain Japan Italy Mexico

Key Countries

2015

12

GDP

2.2% 1.5% 2.4% 2.4% 2012 2013 2014 2015

United States

Oxford Economics

(5%) 0% 5% 10% Brazil Japan Italy France Canada Germany Eurozone UK Australia US World Mexico Spain China India

Key Countries

2015

13

GDP Trends

(6%) (4%) (2%) 0% 2% 4% 6% 8% 10% 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15

Global Real GDP

Year Over Year Change World Advanced Emerging Markets

Oxford Economics

14

World Trade

(20%) (15%) (10%) (5%) 0% 5% 10% 15% 20% 25% 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15

Imports, goods, constant prices and exchange rate, US$

Oxford Economics

15

BRICs World Trade Contribution

(3%) (2%) (1%) 0% 1% 2% 3% 4% 5% 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 Brazil China India Russia

Oxford Economics

16

China’s GDP

0% 2% 4% 6% 8% 10% 12% 14% 16% 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15

Quarterly Results

Year-Over-Year Change

Oxford Economics

17

China’s Consumer Spending

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15

Quarterly Results

Year-Over-Year Change

Oxford Economics

18

China’s Imports

(20%) (10%) 0% 10% 20% 30% 40% 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15

Quarterly Results

Year-Over-Year Change

Oxford Economics

19

Commodity Prices

(50%) (40%) (30%) (20%) (10%) 0% 10% Nickel Natural Gas Oil Iron Ore Jet Fuel Beef Copper Tin Rubber Aluminum Coal Gold Plywood Sugar Cotton

12-Month Change as of February 6, 2016

IndexMundi

20

Countries At Risk From A China Slowdown

(20) (10) 10 20 30 40 India Eurozone UK Mexico Canada Japan Korea US Russia Brazil Chile Australia

Rank Based On Simple Average of Ranking Of Each Indicator

Net Commodity Exports, % of GDP Exports To China, % of Total

Oxford Economics

21

Oil Prices

20 40 60 80 100 120 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Indexed to 1Q2012

Oxford Economics

22

Oil Supply and Demand

92 94 96 98 100 102 104 106 108 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Indexed to 1Q2012

Demand Supply

Oxford Economics

23

Dollar Strength

(50%) (40%) (30%) (20%) (10%) 0% 10% 20% 30% Russia Brazil Turkey Canada Mexico Australia Japan Sweden Eurozone Singapore S Korea UK China US

Effective Exchange Rates

4Q 2015 versus 4Q 2013 Year Over Year Change

Oxford Economics

24

World Stock Markets

80 100 120 140 160 180 200 220 240 Feb-15 Mar-15 May-15 Jun-15 Aug-15 Oct-15 Nov-15 Jan-16

Daily Close—Indexed to October 1, 2013

Same Days DJIA STOXX Europe FTSE 100 Nikkei Shanghai

Wall Street Journal

25

US GDP

(10%) (8%) (6%) (4%) (2%) 0% 2% 4% 6% 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15

Quarterly Change

Annualized Q/Q Year-Over-Year

Oxford Economics

26

US Consumer Spending

(4%) (3%) (2%) (1%) 0% 1% 2% 3% 4% 5% 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15

Quarterly Change

Oxford Economics

27

US Consumer Spending Index

Bureau of Economic Analysis

Consumer Spending Gas Rec Services Airlines Food Lodging 65 70 75 80 85 90 95 100 105 110 115 120 125 130 135 2012 2013 2014 2015

2011 Index

28

US Labor Market

1 2 3 4 5 6 7 8 9 10 50 100 150 200 250 300 350 400 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Unemployment Rate New Jobs (000) Employment Additions Unemployment Rate

Oxford Economics

29

College Educated Employment Index

Bureau of Labor Stats

80 90 100 110 120 130 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 US Employment US College Employment

30

US Job Creation

Bureau of Labor Statistics

Ed/Health Leisure Professional Services Trade/Transp Financial Manufacturing Construction 70 80 90 100 110 120 130 2008 2009 2010 2011 2012 2013 2014 2015

2011 Base Year

31

US Household Wealth

(20%) (15%) (10%) (5%) 0% 5% 10% 15% 20% 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15

Quarterly Change

Oxford Economics

32

US Corporate Profits

(40%) (30%) (20%) (10%) 0% 10% 20% 30% 40% 50% 60% 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15

Quarterly Change

Oxford Economics

33

Lodging Demand

80 85 90 95 100 105 110 115 120 125

Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15

Seasonally-Adjusted Global United States

STR, Inc.; STR Global; IHG PS&P

34

US Demand and GDP

STR, Inc.; Oxford Economics

(8%) (6%) (4%) (2%) 0% 2% 4% 6% 8% 10% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

US Demand & GDP Annual Change

Demand GDP

35

US Net Demand

STR, Inc.

(10%) (8%) (6%) (4%) (2%) 0% 2% 4% 6% 8% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

36

US Occupancy

STR, Inc.

52% 54% 56% 58% 60% 62% 64% 66% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

37

US Occupancy Market Comparison

STR, Inc.; IHG PS&P

10 20 30 40 50 60 70 80 Under 60% 60%-64.9% 65%-69.9% 70%-74.9% 75%-79.9% 80%+

Number Of Markets By Year End Occupancy

2006 2015

38

US ADR Change

STR, Inc.; IHG PS&P

$60 $65 $70 $75 $80 $85 $90 $95 $100 $105 $110 (10%) (8%) (6%) (4%) (2%) 0% 2% 4% 6% 8% 10% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Real ADR ADR Change

ADR Change Real ADR

39

US ADR Weekly Trend

STR, Inc.

(4%) (2%) 0% 2% 4% 6% 8% 10% 7/4 7/18 8/1 8/15 8/29 9/12 9/26 10/10 10/24 11/7 11/21 12/5 12/19 1/2 1/16 1/30 Week Ending

Year-Over-Year Change

40

US ADR Change Market Comparison

STR, Inc.; IHG PS&P

10 20 30 40 50 60 70 80 90 100 Negative 0%-0.9% 1%-1.9% 2%-2.9% 3%-3.9% 4%-4.9% 5%-5.9% 6%+

Number Of Markets By Year End ADR Change

2006 2015

41

US Real ADR

80 85 90 95 100 105 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 Months From Trough

Real ADR Indexed To Prior Peak

2001 Recession 2009 Recession

STR, Inc.; IHG PS&P

42

Monthly Price Indices Of US Goods & Services

90 95 100 105 110 115 120 125 130 135 140 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

Seasonally-Adjusted—2007 Index

Airlines Food Average Hourly Earnings New Cars Hotels

Bureau of Labor Statistics

43

GDP Forecast

2.4% 2.4% 2.0% 2.5%

2014 2015 2016 2017 United States

Oxford Economics

(4%) (2%) 0% 2% 4% 6% 8% Brazil Japan Italy France Canada Eurozone US Germany UK World Australia Mexico Spain China India

2016 Key Countries

44

Consumer Spending Forecast

2.7% 3.1% 2.5% 2.5%

2014 2015 2016 2017 United States

Oxford Economics

(4%) (2%) 0% 2% 4% 6% 8% Brazil Japan France Italy Canada Eurozone Germany US World Australia UK Spain Mexico India China

2016 Key Countries

45

Corporate Profits Forecast

1.7% (2.5%) (0.8%) 1.7%

2014 2015 2016 2017 United States

Oxford Economics

(5%) 0% 5% 10% 15% 20% China US France UK Germany Italy Canada Eurozone World Brazil Australia Mexico Japan Spain India

2016 Key Countries

46

Nights In Accommodations Forecast

5.4% 4.4% 4.4% 3.9%

2014 2015 2016 2017 United States

Oxford Economics

0% 2% 4% 6% 8% Brazil Germany India Italy Eurozone France UK Mexico Spain Japan Australia US World Canada China

2016 Key Countries

47

1.1 0.4 0.1 2015 2016 2017 Occupancy Change (pts)

US Lodging Industry Forecast

4.4% 4.4% 4.3% 2015 2016 2017 ADR Change

STR, Inc.; Tourism Economics

6.3% 5.0% 4.5% 2015 2016 2017 RevPAR Change

48

Conclusion

• Global headwinds pose a threat to the US economy and the

lodging industry.

• US remains fundamentally strong but confidence is fading.
• US lodging demand is expected to remain solid in 2016.

– Record occupancy. – ADR-driven RevPAR gains.

Chuck Pinkowski

Data Provided by

Health of Hotels in Memphis

Where is the Peak? What Experience Tells Us

• Experience is a Great Teacher, But She Sends

Terrific Bills

• The Best Way to Suppose What May Come is to

Remember What is Past

Memphis Lodging Market

Continuing the Positive Trend A Record Breaking Year

What Is On The Horizon For 2016 & Beyond 2013 2014 2015 2016p 2.2% 12.5% 5.1% 6.1% % RevPAR Change

P&C Forecast vs Actual – 2015

Definitely Not An Exact Science

Forecast Actual

• Occ

66.5% (2.5%) 64.6% (-0.7%)

• ADR

$88.00 (4.5%) $88.92 (5.9%)

• RevPAR

$58.52 (7.1%) $57.40 (5.1%)

Memphis Lodging Market

Every Day 59 more rooms sold Revenue up $77,088 For the Year 21,549 more rooms sold $28,136,973 more in revenue How good was 2015 vs 2014 Most Rooms Ever Sold Room Supply still below 2010 level

(8,201,348 vs. 8,381,013)

Revenue Highest on Record ADR Now $5 above 2007 peak

Memphis Lodging Market

Total Revenue

$300,000,000 $350,000,000 $400,000,000 $450,000,000 $500,000,000 $550,000,000 2009 2010 2011 2012 2013 2014 2015 2016P

Almost ½ Billion $ in 2016 45.6%

Memphis Lodging Market

Key Statistics

YE 2015 YE 2014 % Change Room Supply (Daily) 22,470 22,214 1.2% Room Demand (Daily) 14,505 14,446 0.4% Room Revenue (Daily) $1,289,765 $1,212,678 6.4% Occupancy 65.0% 64.6%

• 0.7%

ADR $88.92 $83.95 5.9% RevPAR $57.40 $54.59 5.1%

Memphis Lodging Market

Change in Room Night Demand by Month Over Prior Year

28,110 31,050 58,540 52,330 44,396 21,551 33,137 22,667 15,560 12,909

• 1,273

10,208

• 21,222
• 20,980
• 31,416
• 5,845
• 14,003

9,417 8,482 1,264 41,770 10,925 27,909 15,245

• 40,000
• 30,000
• 20,000
• 10,000

10,000 20,000 30,000 40,000 50,000 60,000 70,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2014 2015

Memphis Lodging Market

Change in Room Night Supply & Demand

• 111,491

418,421 65,313 94,674 60,234 329,185 21,549 339,982 208,375

• 183,559
• 175,436

83,264 6,528 93,260

• 300,000
• 200,000
• 100,000

100,000 200,000 300,000 400,000 500,000 2009 2010 2011 2012 2013 2014 2015

Demand Supply

Candlewood Southaven 86 rms Hampton Hernando 82 rms Hilton Garden Wolfchase 124 rms

Memphis Lodging Market vsTotal U.S.

% Change 2015 vs 2014

Memphis U.S. Room Supply 1.2% 1.1% Room Demand 0.4% 2.9% Room Revenue 6.4% 7.4% Occupancy

• 0.7%

1.7% ADR 5.9% 4.4% RevPAR 5.1% 6.3%

Memphis Lodging Market

Average Rate

$69.16 $76.20 $81.91 $84.15 $78.82 $74.70 $74.90 $78.00 $79.52 $83.95 $88.92

$65.00 $70.00 $75.00 $80.00 $85.00 $90.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Memphis Lodging Market

Occupancy

63.4% 63.4% 62.3% 56.4% 52.7% 56.4% 58.4% 60.9% 61.0% 65.0% 64.6%

50.0% 55.0% 60.0% 65.0% 70.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Memphis Lodging Market

RevPAR

$43.86 $48.30 $51.03 $47.46 $41.54 $42.12 $43.77 $47.50 $48.52 $54.59 $57.40

$40 $42 $44 $46 $48 $50 $52 $54 $56 $58 $60 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Memphis Lodging Market

Average Daily Change - Supply/Demand

• 4

444 724 932 571

• 503
• 207

228 18 256

• 6

55

• 812
• 305

1146 179 259 165 902 59

• 1000
• 500

500 1000 1500 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Supply Demand

Memphis Lodging Market

% Change Key Indicators

2.6

• 2.2
• 2.1

1 0.1 1.2 9.7 1.4 2 1.2 6.7 0.4 7 3.7 4.2 0.2 6.6

• 0.7
• 5.2

0.3 4.1 2 5.6 5.9

• 6
• 4
• 2

2 4 6 8 10 12 2010 2011 2012 2013 2014 2015

Supply Demand Occupancy ADR

Memphis Lodging Market

12 Month Moving Average Supply/Demand

4,000,000 4,500,000 5,000,000 5,500,000 6,000,000 6,500,000 7,000,000 7,500,000 8,000,000 8,500,000 9,000,000 2010 2011 2012 2013 2014 2015 Supply Demand

Peak Supply 12/2010 22,951 Peak Demand 12/2015 14,505 21,932 10/2012 22,470 12/2015 11,876 1/2010

Memphis Lodging Market

12 Month Moving Avg Revenue

$325,000,000.00 $345,000,000.00 $365,000,000.00 $385,000,000.00 $405,000,000.00 $425,000,000.00 $445,000,000.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

• 12.5%

38.7%

Memphis Lodging Market

Monthly for 2015

$82.43 $86.69 $86.37 $90.27 $95.63 $91.50 $89.29 $87.47 $91.65 $90.63 $87.76 $83.48 50.4% 59.6% 67.8% 69.5% 70.4% 71.8% 71.3% 64.8% 69.2% 66.9% 59.7% 53.0%

50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% $75 $80 $85 $90 $95 $100

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

ADR Occ

Memphis Lodging Market

RevPAR Growth

• 15
• 10
• 5

5 10 15 20 25 2010 2011 2012 2013 2014 2015

57 months with only 3 negative months of RevPAR Growth – 3/2011 thru 12/2015

Memphis Lodging Market

RevPAR Composition- % Change by Contribution

7 3.7 4.2 0.2 6.6

• 0.7

1.4 3.9 8.5 2.2 12.5 5.1

• 5

5 10 15 20 25 2010 2011 2012 2013 2014 2015 Occ ADR

Memphis Lodging Market

Weekday/Weekend for 2015

49.5% 61.0% 67.1% 67.9% 63.9% 70.0% 72.4% $80.17 $89.01 $92.48 $92.60 $88.72 $88.29 $88.85 $75.00 $80.00 $85.00 $90.00 $95.00 $100.00 $105.00 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% Sun Mon Tue Wed Thur Fri Sat Occ ADR

Occupancy Trend Comparison

Memphis/U.S.

50.0% 55.0% 60.0% 65.0% 70.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Memphis U.S. 19.1%

• 12.7%
• 16.9%

23.3%

• .06%

Memphis Lodging Market

Supply/Demand

4,000,000 4,500,000 5,000,000 5,500,000 6,000,000 6,500,000 7,000,000 7,500,000 8,000,000 8,500,000 9,000,000

2009 2010 2011 2012 2013 2014 2015

Supply Demand

8,201,348

5,294,327 5,272,778 4,304,951

8,377,293

Memphis Lodging Market

Geographic Regions

Memphis Lodging Market

Year End 2015 by Geographic Region

ADR Occ RevPAR # Rooms # Properties

West Memphis $63.64 57.3% $36.48 1,603 25 Poplar/East $96.84 70.3% $68.02 5,129 42 East/I-40 $68.79 60.4% $41.55 3,542 38 Airport/South $63.39 57.3% $36.33 4,559 49 Downtown/Midtown $134.63 69.2% $93.11 3,881 32 Mississippi $88.97 71.8% $63.85 2,902 39 Millington/North/Other $65.36 54.5% $35.65 1,033 19 Citywide $88.92 64.6% $57.40 22,544 244

Memphis Lodging Market

Change in Room Night Demand

43,985 78,447 54,942 77,032 66,806 31,780 54,004 5,393 29,049

• 45,565

3,119 40,768 16,408

• 15,811
• 60,000
• 40,000
• 20,000

20,000 40,000 60,000 80,000 100,000

West Mphs Dtwn/Mid Poplar/East I-40/East Airport South Mississippi Millington/North

2014 2015

Memphis Lodging Market

Change in Room Night Supply

• 4,522
• 7,507
• 6,346

25,515

• 612

24,511 28,875

• 396

36,269

• 12,760

45,754

• 118
• 20,000
• 10,000

10,000 20,000 30,000 40,000 50,000

West Mphs Dtwn/Mid Poplar/East I-40/East Airport South Mississippi Millington/North

2014 2015

RevPAR Composition

% Change by Contribution

5.9 6.3 4.5 11 7.1 5.2 6.9 5

• 0.7

1

• 3.3

5.3

• 2.4
• 2.2
• 2.6
• 7.1
• 10
• 5

5 10 15 20

Citywide Dtwn/Mid Poplar/East Airport/South I 40/East Mississippi West Mphs Millington North

ADR Occ

Memphis Lodging Market

Chain Scale

Memphis Lodging Market

Year End 2015 by Chain Scale

ADR Occ RevPAR # Rooms # Properties

Upper Upscale/ Upscale $120.74 70.7% $85.34 5,462 33 Upper Midscale $102.54 69.4% $71.15 4,608 47 Midscale $78.28 61.7% $48.27 2,247 27 Economy $46.29 58.2% $26.94 4,894 61 Citywide $88.92 64.6% $57.40 17,211 168

Memphis Lodging Market

Change in Room Night Demand

77,199 81,593 61,642 55,046

• 14,622

41,045

• 12,926
• 34,388
• 60,000
• 40,000
• 20,000

20,000 40,000 60,000 80,000 100,000

Upper Upscale/Upscale Upper Midscale Midscale Economy

2014 2015

Memphis Lodging Market

Change in Room Night Supply

• 334

24,118

• 10,910

37,334 54,440 14,968

• 1,568
• 20,000
• 10,000

10,000 20,000 30,000 40,000 50,000 60,000

Upper Upscale/Upscale Upper Midscale Midscale Economy

2014 2015

Downtown Memphis

Downtown Memphis Hotels

as of 12/31/15

• Madison Hotel
• Springhill Suites
• Hampton Inn & Suites
• River Inn
• Westin
• Residence Inn
• Courtyard
• Peabody
• Sheraton
• Sleep Inn
• Comfort Inn
• Doubletree
• Holiday Inn
• Crowne Plaza
• Big Cypress Lodge

Downtown Memphis

2006 - 2015

58.0% 60.0% 62.0% 64.0% 66.0% 68.0% 70.0% 72.0% 74.0% 76.0% $80.00 $90.00 $100.00 $110.00 $120.00 $130.00 $140.00 $150.00 $160.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Occ ADR RevPAR

Downtown Memphis

% Change 2014-2015

9.9% 9.2%

• 2.1%

6.4%

• 3.6%

1.4% 4.1%

• 4.0%

5.0%

• 1.4%

3.6%

• 2.8%

3.3% 7.9%

• 0.2%

9.3% 7.3% 9.3% 5.9% 3.4% 7.4% 1.5% 14.6% 0.8%

• 5.0%

0.0% 5.0% 10.0% 15.0% 20.0% Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Occ ADR

Downtown Memphis

Key Statistics

YE 2015 YE 2014 % Change Room Supply (Daily) 2,913 2,808 3.7% Room Demand (Daily) 2,129 2,036 4.6% Room Revenue (Daily) $315,639 $287,243 9.9% Occupancy 73.7% 72.5% 1.7% ADR $148.40 $141.03 5.2% RevPAR $109.37 $102.29 6.9%

Memphis Lodging Market

Pipeline

Downtown

• Hilton Garden Inn
• Holiday Inn Express
• Fairfield Inn
• La Quinta
• Cambria Suites
• Ascend
• Curio by Hilton
• One Beale
• Ice House
• Extended Stay Hotel
• Homewood Suites
• Home2 Suites
• AC Hotel

Other Areas

• Hampton Suites

Germantown

• Hilton Garden Inn Germantown
• Home2 Suites Germantown
• Holiday Inn Germantown
• GuestHouse @ Graceland
• Holiday Inn Exp West Mphs

Memphis Lodging Market

CVB Competitive Cities

Occ ADR RevPAR Birmingham 63.2% $83.30 $52.65 Little Rock 55.7% $80.09 $44.61 Tampa/St Pete 71.8% $114.56 $82.28 Atlanta 69.9% $97.78 $68.40 Louisville 65.2% $103.75 $67.69 New Orleans 69.7% $148.20 $103.30 Charlotte 70.8% $99.01 $70.12 Knoxville 59.0% $86.61 $51.07 Memphis 64.5% $89.24 $57.53 Nashville 73.5% $126.67 $93.11 Chattanooga 64.9% $84.73 $54.95 mcvb

Memphis Lodging Market

CVB Competitive Cities - % Change

Occ ADR Supply Demand Birmingham 4.1% 2.9%

• 0.4%

3.7% Little Rock

• 1.5%

3.0% 2.9% 1.2% Tampa/St Pete 5.6% 7.7%

• 0.2%

5.5% Atlanta 2.7% 6.4% 0.7% 3.5% Louisville 2.0% 6.6% 2.6% 4.6% New Orleans 1.0% 2.3% 1.8% 2.9% Charlotte 2.7% 6.1% 0.3% 3.0% Knoxville 5.6% 8.5% 1.3% 6.9% Memphis

• 0.9%

6.3% 1.5% 0.6% Nashville 2.2% 8.7% 2.5% 4.7% Chattanooga 9.5% 5.5% 1.0% 10.6% mcvb

Memphis Lodging Market

What Does the Future Hold

Memphis Lodging Market 2016YE Projection

 Occupancy – 65.5% (+1.4%)

ADR - $93.00 (+4.6%)

RevPAR - $60.92 (+6.1%)

State of the National Lodging Market

Jeff Higley

VP, Digital Media & Communications/Editorial Director STR/STR Global/Hotel News Now

An Interview with Lee Hunter

Chief Operating Officer Hunter Hotel Advisors Atlanta, GA

Moderator – Kevin Kane

President Memphis Convention & Visitors Bureau

Presented by Pinkowski & Company and Metropolitan Memphis Hotel & Lodging Association

Memphis Cook Convention Center August 16 - 17, 2016