Hotel Performance Across Key European Markets Natalie Weisz Research & Analysis Manager NWeisz@STR.com 2018 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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Agenda 1. Global Overview 2. Europe continues to fly 3. Central & Eastern Europe positivity all around 4. Russian recovery continues? 5. Sun shining in Euro Med 6. Strong and steady Germany 7. Brexit means.. 8. Amsterdam boost 9. Looking ahead
Global Overview
Global RevPAR % Change USD, Europe in EUR, Constant Currency, Full Year 2017 North America +3.2% Europe +5.6% Central America +3.8% Northern Africa +37.9% Middle East -5.6% Asia +3.5% South America +2.7% Southern Africa +4.6% Australia & Oceania +3.7%
Significant demand growth across the world Global Supply & Demand % Change, Full Year 2017 Supply Demand 7.0% 6.2% 4.9% 5.2% 4.0% 2.8% 3.3% 2.6% 3.2% 3.3% 2.5% 1.9% 1.2% 0.8% 1.3% 1.6% North America & Caribbean Central America South America Europe Middle East Africa Asia Australia & Oceania
US Concerns Trumped Up 10% Supply % change Demand % change RevPAR % change 5% 0% 2011 2012 2013 2014 2015 2016 2017 2018 (F) 2019 (F)
Intra-APAC travel continues to drive demand Asia Pacific Supply, Demand, RevPAR % Change, USD, CC, Full Year 2015-2017 6% 4% Supply % change Demand % change RevPAR % change 2% 0% -2% 2015 2016 2017
Middle East supply growth has outpaced demand for the past 3 years USD, CC, Full Year 2011-2017 15% Supply % change Demand % change RevPAR % change 10% 5% 0% -5% -10% -15% 2011 2012 2013 2014 2015 2016 2017
Significant supply growth is still on the way across the Middle East Demand will need to grow significantly 105,616 more rooms by 2020 489 seats on A380 & 4 days Length of Stay 42 more A380s daily in the sky
Dubai has a pipeline of over 60k rooms Dubai supply and pipeline from AM:PM 2017 2022 Existing Hotel Pipeline Hotel
Europe continues to fly
Demand outpacing supply for 5 consecutive years Europe Supply, Demand, RevPAR % Change, EUR, CC, Full Year 2012 2017, Q1 2018 Supply % change Demand % change RevPAR % change 6% 5% 6% 5% 5% 4% 4% 3% 2% 2% 2% 2% 1% 0% 2012 2013 2014 2015 2016 2017 Q1 2018
2017 occupancies now almost 10% above previous peak Full Year 2008, 2016 & 2017 2017 2016 2008 85% 80% 75% 70% 65% 60% 55% 50% 45% 40% January February March April May June July August September October November December
Europe strong across the board in 2017 Europe RevPAR % Change, LC, Full Year 8 10 Helsinki St. Petersburg Edinburgh Amsterdam Dublin 8 London Brussels Zurich Paris Madrid Barcelona Lisbon 22 18 12 4 7 8 2 10 2 19 3-2 2 Rome 1 Copenhagen 11 15 20 10 Berlin Prague 9 35 19 Vienna Athens 4 Budapest Bucharest Belgrade Istanbul Warsaw Kiev Moscow
Dublin and Prague lead the way Top 5 growth markets compression nights 2007 vs 2017 # Compression Nights (>90% Occ) ADR Premium Market 2007 2017 2007 2017 Dublin 27 145 13% 23% Prague 24 126 21% 19% Lisbon 27 92 17% 29% Budapest 27 86 19% 21% Athens 28 87 17% 14%
Terror impact drives down performance Bottom 5 growth markets compression nights 2007 vs 2017 # Compression Nights (>90% Occ) ADR Premium Market 2007 2017 2007 2017 Brussels 64 37 53% 64% Rome 42 18 13% 15% Moscow 42 14 35% 25% Paris 48 2 14% 42% Istanbul 50 1 5% 12%
Hotels have shown increased resilience to terror attacks RevPAR indexed to month before terror, 12 months rolling, LC 1.10 1.05 1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.65 0.60 No Impact: London, Manchester, Barcelona, Berlin In Recovery: Paris (2+ years later) Recovered: Nice(1), Brussels (2), Istanbul (2) London Manchester Centre Barcelona Istanbul Brussels Paris Nice Berlin
Central & Eastern Europe positivity all around
Eastern Europe Euphoria Full Year 2017 RevPAR % Change Local currency 10 St Petersburg Gdansk/Gdynia/Sopot Tallinn Riga -2 4 7 16 Vilnus 4 Moscow 8 17 Nizhny Novgorod Kazan 14 Yekaterinburg Novosibirsk 9 Prague 9 Bratislava 4 Ljubljana Belgrade 11 3 15 18 20 15 Warsaw Krakow 19 Budapest 9 Sofia Bucharest Kiev 24 Tblisi 5 Voronezh Sochi 13 47 Baku Astana 36 Almaty 10
Eastern Europe Euphoria Full Year 2017 RevPAR % Change Local currency 10 St Petersburg Gdansk/Gdynia/Sopot Tallinn Riga -2 4 7 16 Vilnus 4 Moscow 8 17 Nizhny Novgorod Kazan 14 Yekaterinburg Novosibirsk 9 Prague 9 Bratislava 4 Ljubljana Belgrade 11 3 15 18 20 15 Warsaw Krakow 19 Budapest 9 Sofia Bucharest Kiev 24 Tblisi 5 Voronezh Sochi 13 47 Baku Astana 36 Almaty 10
Central & Eastern Europe Central Eastern Europe Supply, Demand, RevPAR % Change, Full Year 2007-2017, Q1 2018 15% Supply % change Demand % change RevPAR % change 10% 5% 0% -5% -10% -15% -20% -25% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018
Central Eastern Europe strongest pipeline markets Top 10 Pipeline Cities Room count as at March 2018 Moscow Warsaw Tbilisi Budapest Gdansk/Gdynia/Sopot Saint Petersburg Sofia Bucharest Poznan Vilnius 0 1 2 3 4 5 6 Thousands Pipeline
Sun shining in Euro Med
2017 was a fantastic year across the Mediterranen Full Year 2017, RevPAR % change - constant currency 0 Cote D Azur / Provence Barcelona 10 Lisbon 22 5 Marbella 15 10 Algarve 17 Marrakech Balearic Islands 10 38 Tunis 15 Croatian Coast 34 Italian Islands 21 Greek Islands Istanbul 65 3 Bodrum Tel Aviv 5 Canary Islands 81 Cairo 1 Eilat 119 Sharm El Sheikh
Spain Main KPIs EUR, Full Year 2017 74.5% Occupancy +0.5% 114.44 ADR +7.8% 85.28 RevPAR +8.4%
A tale of two halves Daily Occupancy and ADR % change, April 2017 to March 2018 100% Occupancy % ADR % 80% 60% 40% 20% 0% -20% -40% -60% April May June July August September October November December January February March
2018 Forecast North Africa and Mediterranean to see double digit RevPAR growth Barcelona with flat RevPAR at best Recovery in Egypt & Turkey New highs in EuroMed Uncertainty in Barcelona
Brexit means
Growth widespread across the UK in 2017 Full Year 2017, RevPAR & Change Inverness 9-6 Aberdeen Glasgow 5 Belfast 17 13 Blackpool 8 12 Edinburgh 3 Newcastle Leeds 0 UK Total: +4.2% London: +4.4% Regional UK: +3.7% Liverpool 6 1 Birmingham 2 Manchester 5 Nottingham 1 Cambridge Cardiff 8 Bristol 4 6 Oxford 4 London 0 Southampton Plymouth 9
driven by Sterling weakness which is now used up London Exchange Rate Impact, January 2017 March 2018, GDP vs USD & EUR ADR ( ) ADR ($) ADR (EUR) 15% 10% 5% 0% -5% -10% -15% -20% -25% -30%
As a result occupancies have turned negative and ADR is following London, January 2017 March 2018, GBP 10% 8% 6% 4% 2% 0% -2% -4% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Occupancy % Chg ADR % Chg
occupancy likely to be negative in the short to medium term London Supply and Demand % Change, 12 month moving average 6% 5% Actual Forecast 4% 3% 2% 1% 0% -1% Supply Demand
Strong and stable Germany
Events drive strong and stable performance Germany Rooms supply, demand & RevPAR % Change, EUR, Full Year 2012-2017, Q1 2018 Supply % change Demand % change RevPAR % change 20% 15% 10% 5% 0% -5% -10% -15% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018
Dortmund and Dusseldorf on top Germany Pipeline/Existing % Data from AM:PM, 09 May 2018 + 24% Hamburg + 14% Hanover + 10% Berlin + 38% Dortmund + 28% Dusseldorf + 9% Dresden Cologne + 9% + 18% Frankfurt am Main Stuttgart + 12% + 20% Munich
High supply increase impacts markets differently German Markets RevPAR % Change, 12 month moving average 14% 12% Strong demand 10% 8% 6% 4% 2% 0% -2% -4% -6% Longer to stabilize -8% Dusseldorf Munich Hamburg
Amsterdam boost
Amsterdam on the up in 2017 Full Year 2012 2017, Q1 2018, Local Currency 12% 10% 8% 6% 4% 2017 117 144 2% 0% -2% -4% 2012 2013 2014 2015 2016 2017 Q1 2018 Occ % Chg ADR % Chg RevPAR % Chg 81%
Transient segment thrives in 2017, while 2018 sees boost in groups Amsterdam RevPAR by Segment % Change, LC, Full Year 2017, Q1 2018 Transient RevPAR % change Group RevPAR % change 23.9% 12.6% 9.9% 1.1% 2017 Q1 2018
Amsterdam s rooms & ancillary revenues on the up in 2017 Revenues by Departments, EUR Revenue Mix RevPAR Growth 3% 25% 72% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Rooms F&B Other 17% 10% 3% Rooms F&B Other
ADR % Chg Airport and Surrounding driving the growth Full Year 2017, RevPAR % Chg, Local Currency 8% 7% Amsterdam Centre Amsterdam Surrounding 6% 5% 4% 3% Museums Quarter & Vondelpark Behind Amsterdam Amsterdam Airport Schiphol Ahead 2% 1% 0% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% Occ % Chg
ADR % Chg Amsterdam on top in ADR growth, yet behind in occupancy Key Netherlands Cities - Full Year 2017, Occ & ADR % Chg, Local Currency 7% 6% 5% Amsterdam Utrecht The Hague 4% 3% Rotterdam Area 2% 1% 0% 0% 1% 2% 3% 4% 5% 6% 7% 8% Occ % Chg
Amsterdam leads in compression nights Compression Analysis 2016 vs 2017 # Compression Nights (>90% Occ) ADR Premium Market 2016 2017 2016 2017 Amsterdam 41 79 23% 22% Utrecht 53 61 17% 18% Rotterdam 11 10-2% 16% The Hague 28 42 7% 15%
Amsterdam s occupancy to remain positive moving forward Amsterdam Supply and Demand % Change, 12 month moving average 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Actual Forecast Supply Demand
Looking Ahead
STR s forecast overview for full year 2018 Forecast February 2018 Edition Recovery Continues Paris Moscow Brussels Strong Growth Amsterdam Athens Zurich Supply Challenges London Warsaw Hamburg
Thank You! Natalie Weisz NWeisz@STR.com 2018 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.