U.S. Lodging Industry 2019 Navigating at Peak SWOT Analysis April - - PowerPoint PPT Presentation

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U.S. Lodging Industry 2019 Navigating at Peak SWOT Analysis April - - PowerPoint PPT Presentation

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U.S. Lodging Industry 2019 Navigating at Peak SWOT Analysis April 4, 2019 Daniel H. Lesser President & CEO (212) 300-6684 x101 daniel.lesser@lwhadvisors.com www.lwhospitalityadvisors.com U.S. Lodging Industry 2 Random Thoughts

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Daniel H. Lesser

President & CEO (212) 300-6684 x101 daniel.lesser@lwhadvisors.com www.lwhospitalityadvisors.com

U.S. Lodging Industry 2019 Navigating at Peak

SWOT Analysis

April 4, 2019

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U.S. Lodging Industry

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Random Thoughts

  • Yield sought in secondary and tertiary plus markets
  • OTA’s contribute to rising sector distribution costs
  • Industry needs to expand reach into home sharing
  • Technology allows for enhanced mobile connectivity and smart rooms
  • Local experiences are a top priority for travelers
  • Resort fees are not just for resorts anymore
  • Expect stricter cancellation policies
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U.S. Lodging Industry Macro Overview

1 / 1 / 2 0 0 9 1 / 1 / 2 0 1 3 1 / 1 / 2 0 1 9 Econom y Contracting Expanding (Slowly) Expanding Jobs Declining Increasing (Slowly) Increasing Consum er Spending Declining Increasing Increasing Business Spending Declining Increasing Increasing Supply Grow th Accelerating Muted Stabilized Room Night Dem and Declining Record Levels Continued Record Levels

Supply ▲ 2.6% ▲ 3.2% ▲ 2.0% ▲ 0.6% ▲ 0.5% ▲ 0.7% ▲ 0.9% ▲ 1.1% ▲ 1.6% ▲ 1.8% ▲ 2.0% ▲ 1.9% Demand ▼ 1.9% ▼ 5.8% ▲ 7.8% ▲ 5.0% ▲ 3.0% ▲ 2.2% ▲ 4.5% ▲ 2.9% ▲ 1.7% ▲ 2.7% ▲ 2.5% ▲ 1.9% Occupancy ▼ 4.4% ▼ 8.7% ▲ 5.7% ▲ 4.4% ▲ 2.5% ▲ 1.5% ▲ 3.6% ▲ 1.7% ▲ 0.1% ▲ 0.9% ▲ 0.5% ▲ 0.0% ADR ▲ 2.7% ▼ 8.8% ▼ 0.1% ▲ 3.7% ▲ 4.2% ▲ 3.9% ▲ 4.6% ▲ 4.4% ▲ 3.1% ▲ 2.1% ▲ 2.4% ▲ 2.3% RevPAR ▼ 1.8% ▼16.7% ▲ 5.5% ▲ 8.2% ▲ 6.8% ▲ 5.4% ▲ 8.3% ▲ 6.3% ▲ 3.2% ▲ 3.0% ▲ 2.9% ▲ 2.3%

Projected 2019 2017 2018

U.S. Hotel Performance

2008 2009 2010 2011 2016 2015 2014 2013 2012

Source: STR, Inc.

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U.S. Lodging Industry

  • Continued industry record rooms revenue operating metrics
  • U.S. hotels operating at high level of efficiency

Strengths

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U.S. Lodging Industry Strengths

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U.S. Lodging Industry Strengths

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U.S. Lodging Industry

Nationwide new hotel supply increase is below room night demand growth due to limited availability of construction finance & building labor shortage

Strengths

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U.S. Lodging Industry

  • Copious availability of debt and equity
  • Continued relatively low interest and cap rate environment
  • Cross-border investment in U.S. hotels

Strengths

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U.S. Lodging Industry

Robust asset price > $1 million per unit

Strength

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U.S. Lodging Industry

Robust asset pricing > $200 million per property

Strength

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U.S. Lodging Industry Weaknesses

U.S. Travel & Immigration Bans Anti-Globalization & Populist Sentiments Trade Wars Domestic Political Polarizations

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U.S. Lodging Industry Weaknesses

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U.S. Lodging Industry Weaknesses

Labor Shortage Increasing Tax Burdens Rising Labor Costs Increasing Property Insurance Rates

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U.S. Lodging Industry Weakness

November 12, 2018 September 6, 2018

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U.S. Lodging Industry Weaknesses

Source: Lodging Magazine

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U.S. Lodging Industry Threats

October 13, 2018

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U.S. Lodging Industry Threats

September 29, 2018 October 22, 2018

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U.S. Lodging Industry Threats

Airbnb has twice as many downloads as 10 hotel apps combined

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U.S. Lodging Industry Threats

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U.S. Lodging Industry Opportunities

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U.S. Lodging Industry Opportunities

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U.S. Lodging Industry Opportunity

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U.S. Lodging Industry Opportunity

Acquisition & renovation of ± 35 year old full service hotels at all in basis equal to or less than new build select service

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U.S. Lodging Industry Opportunity

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U.S. Lodging Industry Opportunities

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U.S. Lodging Industry Opportunities

Technological advances = increased operating efficiencies

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U.S. Lodging Industry Opportunities

Blockchain: “A new internet for the travel industry” 3D printers: “forgetting things” will cease to be a problem anymore Interactive chatbots: virtual concierge Neuro- Dreaming: choose your

  • wn dream
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U.S. Lodging Industry Opportunities

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U.S. Lodging Industry Opportunities

  • Mergers & Acquisitions and spinoffs
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U.S. Lodging Industry Opportunities

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U.S. Lodging Industry Opportunities

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U.S. Lodging Industry Favorable Outlook

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Daniel H. Lesser

President & CEO (212) 300-6684 x101 daniel.lesser@lwhadvisors.com www.lwhospitalityadvisors.com

U.S. Lodging Industry 2019 Navigating at Peak

SWOT Analysis

April 4, 2019