Lee County Tourist Development Council

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1 Lee County Tourist Development Council April 11 th, 2019 Emmy Hise Senior Consultant, Consulting & Analytics 2019 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.

2 Agenda Total U.S. Overview State of Florida Lee County Performance Comparable Counties Pipeline Forecast

3 Total U.S. Overview

4 Records Still being Broken Highest Ever? % Change Room Supply 2.0% Room Demand 2.5% Occupancy 66.2% 0.5% ADR $ % RevPAR $88 2.9% Room Revenue 5.0% Total US Results, 2018

5 February 2019 Update Total US Results, February 2019

6 Demand Growth Trajectory Slows. Supply Growth Still At 2% Supply % Change Demand % Change Total U.S., Supply & Demand % Change, 12 TTM 1/ /2019

7 Occupancy Growth Still Positive Nine Years Into the Cycle Occ % Change ADR % Change Total U.S., ADR & OCC % Change, 12 TTM 1/ /2019

8 Real ADR Growth (ADR% minus CPI%) Now Hovers Around 0% Total U.S., Real ADR % Change (ADR minus CPI), by quarter, Q1/1990 Q4/2018

9 RevPAR Growth: The Beginning Of A Long Slow Winter 5 Monthly 12TTM *Total U.S., RevPAR % Change by month and 12 TTM, 1/ /2019

10 RevPAR Growth: Positive in 107 out of 108 last months (= Nine Years!) Months 56 Months 107 Months Gulf War 9/11 Housing / Banking Crisis Total U.S., RevPAR % Change, 1/ /2019

11 This Expansion Cycle Fueled by High Demand, Low Supply Cycle Period: Dec Mar Mar Dec Length (months): Avg. Monthly Supply Growth: Avg. Monthly Demand Growth: Avg. Monthly ADR Growth: Avg. Monthly RevPAR Growth:

12 Number of I/C Rooms: Slight Acceleration, But Not Of Concern Rooms (000s) Rooms ('000s) (LHS) % Change YoY (RHS) *Total U.S Pipeline, Rooms In Construction and % Change from Same Month Prior Year, 1/ /2019 % Change

Limited Service Construction Is The Name Of The Game 72% 60.8 64.5 10.7 24.1 12.8 4.1 20.

13 Limited Service Construction Is The Name Of The Game 72% Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Unaffiliated *US Pipeline, Rooms In Construction, 000s Rooms, by Scale, February 2019

14 Many Economic Indicators Remain Strong Robust Job Growth/Low Unemployment GDP Growth in Excess of 3.0% Consumer Spending Still Growing 5% to 6%* Manufacturing on the Rise *

15 State of Florida

16 Revenue is high, while demand is slowing Highest Ever? % Change Room Supply 1.9% Room Demand 0.8% Occupancy 72.8% -1.1% ADR $ % RevPAR $ % Room Revenue 5.2% State of Florida Results, YE 2018

17 Florida Markets Make Waves in 2018 Big Waves (Top 25 Markets): Miami/Hialeah had the second highest RevPAR growth Tampa had one of the lowest RevPAR gains Little Waves (all Markets): Florida Panhandle had a 10.6% RevPAR growth Sarasota/Bradenton had second worst RevPAR result of -5.5% Florida by Market RevPAR Results, YE 2018

18 Demand Impact of Hurricanes are Significant October 2017 October 2018 Lee County Lee County Florida Demand % Change, October 2017 & October 2018

19 If not Hurricanes, Red Tide? June 2018 November 2018 January 2019 NOAA Harmful Algal BloomS Observing System; June 2018-January 2019

20 Demand Declines without Hurricane Impact, Red Tide? August 2018 Sarasota County Lee County Collier County Florida Demand % Change, August 2018

21 Florida A Glimpse into 2019 Actual % Change Room Supply 2.9% p Room Demand 2.3% p Occupancy 76.1% -0.5% q ADR $ % p RevPAR $ % p State of Florida YTD February 2019

22 Lee County Performance

23 Lee County At A Glance Actual % Change Room Supply 0.8% p Room Demand -3.3% q Occupancy 68.9% -4.1% q ADR $ % p RevPAR $ % q Lee County, FL 2018

24 Lee County A Glimpse into 2019 Actual % Change Room Supply 1.3% p Room Demand -1.9% q Occupancy 80.7% -3.2% q ADR $ % q RevPAR $ % q Lee County, FL YTD February 2019

25 Previous Demand Growth is Correcting Resulting in Decline 10 8 Supply % Change Demand % Change +8% % % Lee County., Supply & Demand % Change, 12 TTM 1/2013 2/2019

26 ADR Growth Exceeds Total U.S. Growth in Occupancy % Change 7 5 ADR % Change 3.8% Lee County, Occ & ADR % Change, 12 TTM 1/2013 2/2019

27 Rate Growth in All Classes Occ ADR 6% 4% 2% 0% -2% -4% -6% -8% Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Lee County, FL Classes, Occ and ADR Percent Change, 2018

28 Transient vs. Group Occupancy Trends Transient Group 50.9% 52.7% 52.1% 54.2% 51.4% 51.0% 41.3% 44.8% 13.3% 14.3% 13.6% 16.0% 15.9% 16.4% 16.2% 16.1% TTM 2019 Lee County, FL Customer Segmentation Occ (Luxury and Upper Upscale) Full Year , TTM Feb 2019

29 Transient vs. Group ADR Trends Transient Group $154 $158 $158 +$7 $165 $164 $136 $138 $142 $127 $131 $132 $132 $103 $108 $112 $ TTM 2019 Lee County, FL Customer Segmentation ADR (Luxury and Upper Upscale) Full Year , TTM Feb 2019

30 Comparable Counties

31 Broward Collier Lee Miami-Dade Monroe Palm Beach Pinellas Sarasota Florida Stagnant Demand Growth or Declines Across Most Counties Supply % Chg Demand % Chg 10% 8% 6% 4% 2% 0% -2% -4% Supply / Demand Percent Change by County; YTD December 2018

32 Broward Collier Lee Miami-Dade Monroe Palm Beach Pinellas Sarasota Florida ADR is Driving County Growth 8% 6% 4% 2% 0% -2% -4% -6% -8% Occ ADR Occupancy and ADR Percent Change by County; YTD December 2018

33 Miami-Dade Palm Beach Collier Florida Broward Pinellas Lee Monroe Sarasota RevPAR Growth in Most Counties RevPAR 6.3% 4.7% 4.6% 3.2% 3.0% 1.1% -0.4% -0.4% -7.4% RevPAR Percent Change by County; YTD December 2018

34 Pipeline

35 Lee County Supply Continues to Rise Phase # of Properties # of Rooms In Construction Final Planning Planning 15 1,562 Total Pipeline 23 2,754 Lee County Pipeline, by Project Phase March 2019

36 What: Upper Midscale Dominates New Supply Chain Scale Number of Properties Number of Rooms % of New Supply (rooms) Luxury % Upper Upscale % Upscale % Upper Midscale 11 1, % Midscale % Economy % Independent % Lee County Pipeline, by Chain Scale March 2019

37 Where: New Supply is Spread among County Lee County Pipeline AM:PM March 2019

38 Current Supply with New Supply Map Lee County Supply & Pipeline AM:PM March 2019

39 When: Historic Records of Supply Growth Year # of Properties # of Rooms , Unknown Lee County Pipeline, by Projected Opening Date March 2019

40 Who: Upcoming Openings Springhill Suites Estero 100 Rooms U/C Open Date: Oct 2019 Autograph Collection Fort Myers Downtown 248 Rooms U/C Open Date: Oct 2020 Staybridge Suites Fort Myers 90 Rooms Open Date: Jul 2020 Fairfield Inn & Suites Bonita Springs 114 Rooms Final Planning Open Date: Sep 2020

41 Forecast

42 Notable Calendar Shifts Impacting US Lodging Performance Data in 2019: Easter: Passover: Hanukkah: Weekend Night: Shift from March to April (also affects Q1/Q2) Shift from March to April (also affects Q1/Q2) Shift from 12/3 to 12/23, impacting weekly results Jun/Sept/Dec loose. May/Aug/Nov gain. Notable Market Level Events / Comps: Super Bowl: From Minneapolis to Atlanta North Carolina: Hurricane Florence 9/14/2018 and thereafter Florida: Hurricane Michael 10/10/18 and thereafter California: Wildfires 11/8 through 11/25/2018 and thereafter

43 Total United States Key Performance Indicator Outlook (% Change vs. Prior Year) 2019F Outlook Metric 2019 Forecast Supply 1.9% Demand 1.9% Occupancy 0.0% ADR 2.3% RevPAR 2.3%

44 Lee County Seasonality Q1 is Critical RevPAR ($) January February March April May June July August September October November December

45 2019 is Stabilization Year STR Lee County Forecast 2019 Forecast % Change Occupancy 69.2% 0.5% ADR $ % RevPAR $ %

Questions? Presentation is available for download. To view this presentation, click STR Data Presentations from the drop-down menu on www.hotelnewsnow.com. 2019 STR, Inc. All Rights Reserved.

46 Questions? Presentation is available for download. To view this presentation, click STR Data Presentations from the drop-down menu on 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.

47 Thank You! Emmy Hise 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.

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