Final Presentations - Dallas Hotel Conference

Transcription

Welcome Remarks and
Introductions
Cliff Risman
Partner
Gardere Wynne Sewell LLP
Market Update
Dan Lesser
President and CEO
LW Hospitality Advisors LLC
U.S. LODGING FUNDAMENTALS
2013 Dallas Hotel Conference
Presented by:
Daniel Lesser, President & CEO
LW Hospitality Advisors
570 Seventh Avenue, Suite 805
New York, NY 10018
USA
(212) 300-6684 X101
daniel.lesser@lwhadvisors.com
www.lwhospitalityadvisors.com
November 14, 2013
U.S. Lodging Industry - Summary
Economic Environment
• Tepid growth which appears to be losing steam
Lodging Fundamentals
• Demand is strongly rebounding
• 7/13 Highest monthly rooms rev EVER RevPAR is growing
 Construction accelerating

Investor Interest
• Public REITs
• Private Equity Funds
• Sovereign Wealth Funds 

Non‐traded REITs
Family Offices
Capital Markets
• Robust lending environment has led to more refinancing than transaction activity
• Lower cost of debt at higher leverage has increased equity returns
• Near term outlook is favorable as far as cost and availability of capital
Transaction Activity
• Capitalization rates and discount rates have reached a point of stabilization
• Values expected to continue to rise at moderate rate primarily due to RevPAR gains
• New supply and/or economic factors are starting to impact cap rates and values in some markets
LW Hospitality Advisors | Page 2
U.S. Lodging Industry - Bright Future
Supply Growth: Below Average through 2016
Demand Growth: Above Average through 2016
Occupancy: Above Average through 2016
ADR Growth: 2X Average through 2016
RevPAR Growth: 2.5X Average through 2016
Source: PKF Consulting USA
U.S. Lodging Industry - SWOT Analysis
Strengths
•
•
•
•
•
•
Construction financing limited
Emerging U.S. energy markets
Developing overseas middle classes
Foreign investor perception of relative U.S. safety
Rising hotel investment market
Rapidly changing technology
Weaknesses
•
•
•
•
•
Opportunities
•
•
•
•
•
Industry well positioned to react to any inflationary increases
Ancillary revenue opportunities similar to airline industry
Hotel brands morph into experiential identities expanding into retail goods and other services
No shortage of old functionally obsolete hotel product situated on excellent sites/locations Rapidly changing technology
Labor unrest
Increasing costs of employee benefits
Low growth U.S. economy
Brands forcing execution of delayed PIP’s
Continued room pricing pressure from OTA’s (Rapidly changing technology)
Threats
•
•
•
•
•
•
•
Event risk
Labor unrest
Rising interest rates
Rising inflation
Economic recession
Brand standard changes
Rapidly changing technology
Macro Overview
1/1/2009
1/1/2011
11/1/2012
11/1/2013
Contracting
Expanding
Expanding
(Slowly)
Expanding
(Still Slowly)
Jobs
Declining
Declining
Increasing
(Slowly)
Increasing
(Still Slowly)
Consumer Spending
Declining
Expanding
Increasing
Increasing
Business Spending
Declining
Expanding
Increased
(Now Stagnant)
Accelerating
Accelerating
Stabilized
Muted
Accelerating
(Modestly)
Declining
Growing
Record Levels
Continued
Record Levels
Economy
Supply Growth
Room Night Demand
U.S. Hotel
Performance
2008
2009
2010
2011
2012
Projected Projected
2013
2014
Supply
▲ 2.6%
▲ 3.2%
▲ 2.0%
▲ 0.6% ▲ 0.5% ▲ 0.8% ▲ 1.1%
Demand
▼ 1.9% ▼ 5.8%
▲ 7.8%
▲ 5.0% ▲ 3.0% ▲ 2.2% ▲ 2.4%
Occupancy
▼ 4.4% ▼ 8.7%
▲ 5.7%
▲ 4.4% ▲ 2.5% ▲ 1.4% ▲ 1.3%
ADR
▲ 2.7% ▼ 8.8% ▼ 0.1%
▲ 3.7% ▲ 4.2% ▲ 4.2% ▲ 4.6%
RevPAR
▼ 1.8% ▼ 16.7% ▲ 5.5%
▲ 8.2% ▲ 6.8% ▲ 5.7% ▲ 6.0%
Source: (Data Only) Smith Travel Research
T 12 Moving Average through August 2013:
Demand Growth Back to Normal; RevPAR Driven by ADR
% Change
•
•
•
•
•
•
Room Supply*
Room Demand*
Occupancy
A.D.R.*
RevPAR*
Room Revenue*
1.8 bn
1.1 bn
62.0%
$109 $68
$121 bn
12 Months moving average August YTD 2013, Total US Results
* All Time High
Source: Smith Travel Research
0.7%
2.4%
1.7% 4.0% 5.8%
6.6%
Slowly Catching Up to Prior Peaks
U.S. Total Occupancy Percentage
64%
63%
63.20%
63.10%
62.80%
62.20%
62%
61.40%
59.80%
Volume ($B)
60%
59.90%
57.50%
58%
56%
54.60%
54%
52%
50%
2005
2006
2007
2008
2009
2010
Total U.S.: Occupancy Percentage
2011
2012
2013P
2014P
Favorable Supply/Demand Fundamentals for 2013
8.0%
8
4
2.4%
0
‐0.9%
-4
‐ 4.7%
Supply
‐6.9%
Demand
-8
1990
2000
Total U.S., Supply & Demand % Change, 12 MMA 1/1990 – 8/2013
2010
ADR Growth Stalls. Smooth Sailing From Here?
7.5%
6.8%
5
4.1%
0
‐4.5%
-5
Demand % Change
ADR % Change
‐8.7%
-10
1990
2000
Total U.S., ADR & Demand % Change, 12 MMA 1/1990 – 8/2013
2010
Positive RevPAR Growth For The Foreseeable Future
9%
10
8.6%
5
112 Months
0
65 Months
36 Mo.
‐2.6%
-5
-10
‐10.1%
-15
‐16.8%
-20
1990
2000
Total U.S., ADR & Demand % Change, 12 MMA 1/1990 – 8/2013
2010
Inflation Adjusted ADRs Still Not Reached – Yet
$119
2008 ADR Grown By CPI
Nominal ADR
2000 / 2008 Grown by CPI
$107
$101
2000 ADR Grown By CPI
$85
$85
2000
$116
$104 $107
2002
2004
2006
2008
2010
Total U.S., ADR $ and Inflation Adjusted ADR $, 2000 – 2014F
2000 – 2012 CPI from bls.gov, 2013– 2014 CPI from Blue Chip Economic Indicators
2012
2014F
ADR Discounting at Twice The Speed of ADR Increases
110
Aug ‘13
$110
Sept ‘08
$108
105
Dec ‘11
$102
‐10%
100
+4.9%
Apr ‘10
$97
19 Months
19 Months
95
2008
2009
2010
2011
*Total US, ADR $, 12 MMA 1/07 – 8/13
2012
Scales: Strong Demand Growth, Supply Not An Issue
Supply
Demand
4.5
3.5
3.2
2.0
1.9
1.7
1.7
0.7
0.7
0.4
‐0.1
‐0.8
Luxury
Upper Upscale
Upscale
Upper
Midscale
*Supply / Demand % Change, by Scale, YTD July 2013
Midscale
Economy
ADR Growth > Occupancy Growth
Occupancy
5.9
ADR
4.4
4.4
3.8
3.2
2.7
1.9
Luxury
1.8
1.5
Upper Upscale
1.2
1.2
Upscale
Upper
Midscale
*OCC / ADR % Change, by Scale, YTD July 2013
Midscale
1.5
Economy
RevPAR Catches Up To Prior Record Highs
2007
$213$216
YTD August 2013
$113$117
$84
$89
$62 $66
$44 $44
Luxury
Upper Upscale
Upscale
Upper
Midscale
*RevPAR $, by Scale, YE 2007 & YTD August 2013
Midscale
$31 $31
Economy
YTD August Demand Compared to 2007: Transient
Drives Recovery
Transient
Group
23.6%
18.4%
13.9%
7.5%
0.2%
‐0.3%
‐0.6%
‐5.5%
‐2.7%
‐3.1%
‐9.2%
2008
‐17.1%
2009
2010
2011
2012
*Segmentation Demand % Change, August YTD 2008 through 2013 vs. July YTD 2007
2013
YTD August ADR Compared to 2007: The Worst Is
Behind Us
4.9%
4.1%
2.9%
0.7%
0.1%
‐2.1%
1.3%
‐2.8%
‐4.4%
‐7.1%
Transient
Group
‐11.9%
‐13.2%
2008
2009
2010
2011
*Segmentation ADR % Change
YTD July 2008 through 2013 vs. July YTD 2007
2012
2013
YTD August 2013 RevPAR:
Best / Worst Performing Markets
Market RevPAR % Change
Market RevPAR % Change
Long Island
20.5
Kansas
‐0.4
Oahu Island, HI
14.6
Washington, DC‐MD‐VA
‐0.9
Houston, TX
13.3
Pittsburgh, PA
‐0.9
Jackson, MS
13.2
New York State
‐0.9
San Jose‐Santa Cruz, CA
13.1
Indianapolis, IN
‐1.1
Florida Keys
12.4
Indiana South
‐3.3
Oakland, CA
12.1
Chattanooga, TN‐GA
‐3.9
San Francisco/San Mateo, CA
11.8
Pennsylvania Area
‐5.1
Miami‐Hialeah, FL
11.4
Louisiana North
‐7.4
Central New Jersey
11.3
North Dakota
‐13.8
US Pipeline: Construction Accelerates
Phase
2013
2012
% Change
In Construction
79
66
19%
Final Planning
125
106
17%
Planning
126
132
‐5%
Active Pipeline
330
305
8%
*Total US Pipeline, by Phase, ‘000s Rooms, August 2013 and 2012
Under Construction Rooms Mostly In Middle Segments
29.5
21.6
10.9
7.6
4.7
3.3
Luxury Upper Upscale Upscale Upper Midscale Midscale
1.1
Economy
Unaffiliated
*US Pipeline, Rooms Under Construction , ‘000s Rooms, by Scale, August 2013
Construction in Top 26 Markets
Market
Rooms UC
Las Vegas, NV
Minn‐St Paul, MN‐WI
Oahu Island, HI
Boston, MA
San Fran‐San Mateo, CA
Norfolk‐VA Beach, VA
Phoenix, AZ
Atlanta, GA
Detroit, MI
Dallas, TX
Seattle, WA
Chicago, IL
San Diego, CA
Tampa‐St Pete, FL
St Louis, MO‐IL
Philadelphia, PA‐NJ
Anaheim‐Santa Ana, CA
New Orleans, LA
Orlando, FL
Houston, TX
LA‐Long Beach, CA
Miami‐Hialeah, FL
Washington, DC‐MD‐VA
Denver, CO
Nashville, TN
New York, NY
52 174 168 474 881 431 968 543 1,492 813 614 585 781 996 722 2,572 1,814 2,422 1,272 2,861 1,675 1,938 12,610 *US Pipeline, Top 26 Markets, Rooms Under Construction as % of Existing Supply, August 2013
% Of Existing
0.0%
0.0%
0.0%
0.1%
0.3%
0.4%
0.8%
0.9%
1.0%
1.2%
1.3%
1.4%
1.4%
1.4%
1.5%
1.7%
1.8%
1.9%
2.1%
2.4%
2.5%
2.7%
2.7%
4.1%
5.3%
11.9%
Total United States
Key Performance Indicator Outlook (% Change vs. Prior Year)
2013F by Chain Scale
2013 Year End Outlook
Chain Scale
Occupancy
(% chg)
ADR (% chg)
RevPAR (%chg)
Luxury
2.3%
5.4%
7.8%
Upper Upscale
0.9%
4.2%
5.1%
Upscale
1.1%
4.4%
5.5%
Upper Midscale
0.9%
3.6%
4.5%
Midscale
1.1%
2.6%
3.7%
Economy
1.7%
3.2%
4.9%
Independent
1.9%
4.3%
6.3%
Total United States
1.4%
4.2%
5.7%
*As of September 6, 2013
Total United States
Key Performance Indicator Outlook (% Change vs. Prior Year)
2014F by Chain Scale
2014 Year End Outlook
Chain Scale
Occupancy
(% chg)
ADR (% chg)
RevPAR (%chg)
Luxury
2.7%
5.4%
8.3%
Upper Upscale
0.2%
4.6%
4.8%
Upscale
2.7%
5.0%
7.8%
Upper Midscale
0.2%
3.2%
3.4%
Midscale
1.2%
3.3%
4.5%
Economy
2.8%
3.7%
6.6%
Independent
0.6%
5.2%
5.8%
Total United States
1.3%
4.6%
6.0%
*As of September 6, 2013
YTD Q3 2013 Major
U.S. Hotel Transactions
Major Hotel Sales Transactions 1999-2012
$400,000
140
$279,000
35
100
$193,000
$217,000
75
$171,000
$185,000
$185,000
58
$182,000
$100,000
$158,000
$150,000
$162,000
51
$180,000
61
$189,000
$200,000
102
85
$222,000
$250,000
107
36
$265,000
$300,000
89
120
$344,000
113
$242,000
120
$350,000
130
126
80
60
40
20
$50,000
11
$0
0
Average Price Per Room
Number of Hotels Sold
Major U.S. Hotel Sales Quarterly Analysis
LW Hospitality Advisors: Select Major 2011-2013 U.S. Hotel Sales Survey
Quarter
Total
Trades
Total
Rooms
Average
Size
Property
Total $ Volume
Average Size
Deal
$ Volume
Per Room
Q1 2011
36
14,368
399
$2,767,520,000
$76,875,556
$192,617
Q2 2011
42
12,828
305
$3,649,400,000
$86,890,476
$284,487
Q3 2011
21
4,538
216
$812,175,000
$38,675,000
$178,972
Q4 2011
31
9,072
293
$1,632,439,000
$52,659,323
$179,943
Q1 2012
26
7,271
280
$1,871,050,000
$71,963,462
$257,330
Q2 2012
27
5,401
200
$1,080,400,000
$40,014,815
$200,037
Q3 2012
28
7,464
267
$1,739,635,000
$62,129,821
$233,070
Q4 2012
26
6,572
253
$1,783,850,000
$68,609,615
$271,432
Q1 2013
26
7,389
284
$1,885,240,000
$72,509,231
$255,141
Q2 2013
38
10,927
288
$2,647,740,000
$69,677,368
$242,312
Q3 2013
38
11,330
298
$3,331,600,000
$87,673,684
$294,051
Source: LW Hospitality Advisors (LWHA) has compiled the above information from sources deemed reliable, and the information is thought to be correct, however LWHA cannot warrant absolute accuracy of all the data. Use of this information without verification from original sources is at your own risk.
YTD Q3 2013 Major U.S. Sales
Top 10 by Total Price
Qtr.
Property
No. of
Rooms
Location
Estimated
Sales Price
Estimated
Price/Room
Buyer
Seller
Q3
Peabody Orlando
Orlando
FL
1641
$717,000,000
$436,929
Hyatt Hotels Corp.
UST Hotel Joint Venture Ltd.
Q3
Park Lane Hotel
New York
NY
605
$650,000,000
$1,074,380
Witkoff Group
Estate of Leona Helmsley
Q2
Hyatt Regency
Waikiki Beach Resort Honolulu
and Spa
HI
1230
$450,000,000
$365,854
Blackstone Group
JV Whitehall Street Real
Estate Funds & Hyatt Hotels
Corp.
Q1
Atlanta Marriott
Marquis
Atlanta
GA
1663
$293,000,000
$176,188
N/A
Host Hotels & Resorts, Inc.
Q2
Boston Park Plaza
Hotel & Towers
Boston
MA
1053
$250,000,000
$237,417
Sunstone Hotel Investors,
Inc.
JV Rockpoint Group &
Donald Saunders
Q3
Setai Fifth Avenue
New York
NY
214
$229,000,000
$1,070,093
Great Eagle Group
Bizzi & Partners
Development
Q3
Westin Galleria &
Westin Oaks
Houston
TX
893
$220,000,000
$246,361
Inland American Lodging
Group
Walton Street Capital
Q3
London West
Hollywood
West
Hollywood
CA
200
$195,000,000
$975,000
Northwood Investors LLC
Blackstone Group LP
Q1
Flatotel
New York
NY
289
$180,000,000
$622,837
JV Chetrit Group LLC &
Clipper Equity LLC
JV Rockpoint Group, Atlas
Capital Group & Procaccianti
Group
Q1
Liberty Hotel
Boston
MA
298
$170,000,000
$570,470
LaSalle Hotel Properties
JV Carpenter & Co. Inc. &
HEI Hotels & Resorts
1
So urce: LW Ho spitality A dviso rs has co mpiled the abo ve info rmatio n fro m so urces deemed reliable, and the info rmatio n is tho ught to be co rrect, ho wever LWHA canno t warrant abso lute accuracy o f all the data. Use o f this
info rmatio n witho ut verificatio n fro m o riginal so urces is at yo ur o wn risk.
1 B uyer
plans to co nvert ho tel to extended stay co rpo rate suites
YTD Q3 2013 Major U.S. Hotel Sales
Top 10 by Number of Rooms
CITY
STATE
NO. OF ROOMS
ESTIMATED SALES PRICE
Atlanta
GA
1,663
$293,000,000 $176,188 Q3 Peabody Orlando Orlando
FL
1,641
$717,000,000 $436,929 Hyatt Hotels Corp. UST Hotel Joint Venture Ltd.
Hyatt Regency Q2 Waikiki Beach Resort and Spa
Honolulu
HI
1,230
$450,000,000 JV Whitehall Street Real $365,854 Blackstone Group Estate Funds & Hyatt Hotels Corp.
2013
Q1
PROPERTY
Atlanta Marriott Marquis
ESTIMATED PRICE/ROOM
BUYER
SELLER
N/A
Host Hotels & Resorts, Inc.
Q2
Boston Park Plaza Hotel & Towers
Boston
MA
1,053
$250,000,000 $237,417 Sunstone Hotel JV Rockpoint Group & Donald Investors, Inc. Saunders
Q3
Westin Galleria & Westin Oaks
Houston
TX
893
$220,000,000 $246,361 Inland American Lodging Group
Walton Street Capital
Q3 Hacienda Hotel
El CA
Segundo 640
$26,900,000 $42,031 Rubicon Cos.
N/A
Q3 Park Lane Hotel
New York NY
605
$650,000,000 $1,074,380 Witkoff Group
Q3 Crown Reef Resort
Myrtle Beach
SC
514
$16,100,000 $31,323 Crown Reef Resort LLC
Jordan Properties
Q2
San Jose Marriott Hotel
San Jose
CA
506
$83,000,000 $164,032 CBRE Global Investors
Prudential Real Estate Investors
Q3
Hyatt Regency Santa Clara Santa Clara CA
501
$95,000,000 $189,621 Inland American Lodging Group Inc.
Hyatt Corporation
Source: LW Hospitality Advisors has compiled the above information from sources deemed reliable, and the information is thought to be correct,
however LWHA cannot warrant absolute accuracy of all the data. Use of this information without verification from original sources is at your own
risk.
Top 10 by Price Per Room
Qtr.
Q3
Property
Park Lane Hotel
No. of
Rooms
Location
New York
NY
605
Estimated
Sales Price
Estimated
Price/Room
$650,000,000 $1,074,380 Buyer
Seller
Witkoff Group
Great Eagle Group Bizzi & Partners Development
Q3
Setai Fifth Avenue
New York
NY
214
$229,000,000 $1,070,093 Q3
London West Hollywood
West Hollywood
CA
200
$195,000,000 $975,000 Northwood Investors LLC Blackstone Group LP
$85,000,000 Prudential Real Estate $745,614 Investors
Brack Capital Real Estate
Q2
James New York
Q2
Pier House Resort and Caribbean Spa
Q2
Lake Placid Lodge
NY
114
Key West
FL
142
$90,000,000 $633,803 Ashford Hospitality Trust, Inc. Lake Placid NY
30
$19,000,000 $633,333 Ocean Properties
Richard E. Jacobs Group
Ramsfield Hospitality Finance
New York
NY
289
$180,000,000 JV Rockpoint Group, JV Chetrit Group LLC & Atlas Capital Group & $622,837 Clipper Equity LLC
Procaccianti Group
y p
Viceroy Hotel
New York
NY
241
$148,500,000 $616,183 New York Recovery REIT, Inc.
Ark Partners
Redbury Hotel
Hollywood
CA
57
$34,000,000 $596,491 Pebblebrook Hotel Trust
sbe Hotel Group
$570,470 LaSalle Hotel Properties
JV Carpenter & Co. Inc. & HEI Hotels & Resorts
Q1
Flatotel
Q3
Q3
Q1
New York
1
Liberty Hotel
Boston
MA
298
$170,000,000 So urce: LW Ho spitality A dviso rs has co mpiled the abo ve info rmatio n fro m so urces deemed reliable, and the info rmatio n is tho ught to be co rrect, ho wever LWHA canno t warrant abso lute accuracy o f all the data.
Use o f this info rmatio n witho ut verificatio n fro m o riginal so urces is at yo ur o wn risk.
1 B uyer
plans to co nvert ho tel to extended stay co rpo rate suites
Top 5 Markets
No. of
Sales
Location
No. of
Rooms
Estimated Sales
Price
Estimated
Price/Room
New York
NY
10
2,429
$1,779,700,000
$732,688
San Francisco
CA
6
1,650
$546,000,000
$330,909
Honolulu
HI
5
2,530
$866,000,000
$342,292
San Diego
CA
5
1,219
$293,700,000
$240,935
Boston
MA
4
1,719
$569,300,000
$331,181
So urce: LW Ho spitality A dviso rs has co mpiled the abo ve info rmatio n fro m so urces deemed reliable, and the info rmatio n is
tho ught to be co rrect, ho wever LWHA canno t warrant abso lute accuracy o f all the data. Use o f this info rmatio n witho ut verificatio n
fro m o riginal so urces is at yo ur o wn risk.
Hotel Ownership Increasingly Consolidated
Proportion of Rooms Owned by Investor Type for 10 Largest Hotel Owners
3%
100%
90%
20%
7%
13%
80%
15%
14%
4%
4%
Public Company
33%
70%
60%
C‐Corp
41%
Owner/Operator
(Public or Private)
32%
50%
67%
40%
REIT
30%
20%
59%
36%
10%
4%
0%
Late 1990s
Approximate share of U.S. institutional quality room stock owned by 10 largest owners
Source: Jones Lang LaSalle
14%
37%
12%
2000
27%
2005
44%
Today
44%
Private Equity
Off-Shore Investment into U.S. Hotel Market
Off‐Shore Investment into U.S. Since 2010
Other Off‐
Shore Regions, 2%
China and Hong Kong, 41%
Middle East, 32%
India, 15%
Investment Targets:
Southeast Asia, 11%
China and Hong Kong
Southeast Asia
India
Middle East
Other Off‐Shore Regions
Source: Jones Lang LaSalle
• Coastal gateway markets
• Urban locations and resorts
• Institutional quality assets, often unbranded
• Single assets
Hotel Capital Stack Returns/Price Movements
2005
Early
2006
Late
2006
Early
2007
(Peak)
Late
2007
Mid
2008
Late
2008
Late
2009
Late
2010
Mid
2011
Late
2012
Late
2013
DEBT
Debt To Value
60%
70%
75%
80%
75%
65%
55%
55%
65%
65%
65%
Interest Rate
6.00%
6.50%
6.20%
5.75%
6.50%
7.10%
8.00%
8.00%
6.50%
5.50%
5.25%
70%
5.00%
Amortization
25
30
I/O
I/O
30
25
25
25
25
25
25
25
Debt Constant
7.73%
7.58%
6.20%
5.75%
7.58%
8.56%
9.26%
9.26%
8.10%
7.37%
7.19%
7.02%
EQUITY
Equity To Value
40%
30%
25%
20%
25%
35%
45%
45%
35%
35%
35%
30%
Equity Dividend
10.00%
10.00%
9.00%
8.00%
9.00%
10.00%
11.00%
11.00%
9.00%
8.00%
8.00%
7.00%
Weighted Average Cost Of Capital
(WACC)
8.64%
8.31%
6.90%
6.20%
7.94%
9.06%
10.04%
10.04%
8.42%
7.59%
7.47%
7.01%
Implied Value of $1,000 NOI
$11,575
$12,035
$14,493
$16,129
$12,597
$11,034
$9,956
$9,956
$11,881
$13,175
$13,379
$14,264
% Change WACC From Previous
Period
N/A
-3.80%
-17.00% -10.10% 28.00%
14.20%
10.80%
0.00%
-16.20% -9.82%
-1.53%
-6.20%
% Change WACC From 2005
N/A
N/A
-20.10% -28.20% -8.10%
4.90%
16.30%
16.30%
-2.60%
-12.14% -13.48%
-18.85%
% Change WACC From Peak
N/A
N/A
N/A
N/A
28.00%
46.20%
62.00%
62.00%
35.80%
22.42%
20.55%
13.07%
% Change Value From Previous
Period
N/A
4.00%
20.40%
11.30%
-21.90% -12.40% -9.80%
0.00%
19.30%
10.89%
1.55%
6.61%
% Change Value From 2005
N/A
N/A
25.20%
39.30%
8.80%
13.82%
15.58%
% Change Value From Peak
N/A
N/A
N/A
N/A
-21.90% -31.60% -38.30% -38.30% -26.30% -18.31% -17.05%
-4.70%
Source: LW Hospitality Advisors
-14.00% -14.00% 2.60%
23.23%
-11.56%
Hotel Price Changes (Implied Value Of $1,000 NOI)
Change in Weighted Cost of Capital
Early
2006
8.31%
Late 2006
6.90%
Early
2007
(Peak)
6.20%
25.00% $14,469
$15,043
$18,116
$20,161
$15,746
$13,793
$12,445
$12,445
$14,852
20.00% $13,891
$14,442
$17,391
$19,355
$15,116
$13,241
$11,947
$11,947
15.00% $13,312
$13,840
$166,678
$18,548
$14,486
$12,689
$11,450
10.00% $12,733
$13,238
$15,942
$17,742
$13,856
$12,138
5.00% $12,154
$12,636
$15,217
$16,935
$13,226
0.00% $1,575
$12,035
$14,493
$16,129
-5.00% $10,997
$11,433
$13,768
-10.00% $10,418
$10,831
-15.00% $9,839
Late
2012
7.47%
Late
2013
7.01%
$16,469
$16,724
$17,830
$14,258
$15,811
$16,055
$17,117
$11,450
$13,663
$15,152
$15,386
$16,404
$10,952
$10,952
$13,069
$14,493
$14,717
$15,691
$11,586
$10,454
$10,454
$12,475
$13,834
$14,048
$14,977
$12,597
$11,034
$9,956
$9,956
$11,881
$13,175 $13,379 $14,264
$15,323
$11,967
$10,482
$9,458
$9,458
$11,287
$12,517
$12,711
$13,551
$13,043
$14,516
$11,337
$9,931
$8,961
$8,961
$10,693
$11,858
$12,042
$12,838
$10,229
$12,319
$13,710
$10,707
$9,379
$8,463
$8,463
$10,099
$11,199
$11,373
$12,125
-20.00% $9,260
$9,628
$11,594
$12,903
$10,077
$8,827
$7,965
$7,965
$9,505
$10,540
$10,704
$11,411
-25.00% $8,682
$9,026
$10,870
$12,097
$9,447
$8,276
$7,467
$7,467
$8,911
$9,882
$10,035
$10,698
Change in NOI
2005
8.64%
Late 2007 Mid 2008 Late 2008 Late 2009 Late 2010 Mid 2011
7.59%
7.94%
9.06%
10.04%
10.04%
8.42%
Hotel Percent Price Change (Since Early 2007 Peak)
Change in Weighted Cost of Capital
Change in NOI
Early
2007
(Peak)
6.20%
Late 2007 Mid 2008 Late 2008 Late 2009 Late 2010 Mid 2011 Late 2012 Late 2013
7.94%
9.06%
10.04%
10.04%
8.42%
7.59%
7.47%
7.01%
25.00%
25.00%
-2.40%
-14.50%
-22.80%
-22.80%
-7.90%
2.11%
3.69%
10.55%
20.00%
20.00%
-6.30%
-17.90%
-25.90%
-25.90%
-11.60%
-1.97%
-0.46%
6.13%
15.00%
15.00%
-10.20%
-21.30%
-29.00%
-29.00%
-15.30%
-6.06%
-4.60%
1.70%
10.00%
10.00%
-14.10%
-24.70%
-32.10%
-32.10%
-19.00%
-10.14%
-8.75%
-2.72%
5.00%
5.00%
-18.00%
-28.20%
-35.20%
-35.20%
-22.70%
-14.23%
-12.90%
-7.14%
0.00%
0.00%
-21.90%
-31.60%
-38.30%
-38.30%
-26.30%
-18.31%
-17.05%
-11.56%
-5.00%
-5.00%
-25.80%
-35.00%
-41.40%
-41.40%
-30.00%
-22.40%
-21.19%
-15.98%
-10.00%
-10.00%
-29.70%
-38.40%
-44.40%
-44.40%
-33.70%
-26.48%
-25.34%
-20.41%
-15.00%
-15.00%
-33.60%
-41.80%
-47.50%
-47.50%
-37.40%
-30.57%
-29.49%
-24.83%
-20.00%
-20.00%
-37.50%
-45.30%
-50.60%
-50.60%
-41.10%
-34.65%
-33.64%
-29.25%
-25.00%
-25.00%
-41.40%
-48.70%
-53.70%
53.70%
-44.80%
-38.73%
-37.79%
-33.67%
U.S. LODGING FUNDAMENTALS
2013 Dallas Hotel Conference
Presented by:
Daniel Lesser, President & CEO
570 Seventh Avenue, Suite 805
New York, NY 10018
USA
(212) 300-6684 X101
daniel.lesser@lwhadvisors.com
www.lwhospitalityadvisors.com
November 14, 2013
The Capital Markets: Where are
we in the cycle?
Moderator:
Chuck Bedsole, Managing Director,
Alvarez & Marsal Real Estate Advisory Services, LLC
Panelists:
Monty J. Bennett, Founder, Chairman and CEO, Ashford Hospitality Trust
John Bourret, Managing Director, HFF
Tom Corcoran, Chairman of the Board, FelCor Lodging Trust
Jonathan Wang, Managing Director, Northwood Investors
Transaction of the Year Award
Mike Rawlings
Mayor, City of Dallas
The Joule Dallas
Security & Safety In The
Hospitality Industry
Brad Bonnell, VP, Loss Prevention
Extended Stay America
Market Value of Security
Capability
Key accounts are now inquiring concerning hotel
security capability.
Managing Expectations
In order to meet those expectations a property
needs to be prepared to demonstrate an
intelligence led program aligned with the
historical legal principals that define the legal
and moral duties of an Inn Keeper concerning
safety and security.
Reasonable Care
The manner in which a prudent and responsible
person would respond to foreseeable and
predictable threats.
April 27, 1999
InterContinental Hotel Athens
State Department: Greece - Public
Announcement, April 29, 1999
On April 27, 1999, a terrorist group placed a
bomb at the Intercontinental Hotel in Athens,
killing one person and injuring one other.
Neither of the victims was a U.S. citizen..
Managing Expectations
• Fire Safety Planning & Emergency Response
• Evacuation/Shelter In Place/Lock Down
• Bomb Threat
• Active Shooter
• Access Control/Key Controls
• CCTV Systems
• Affiliation with intelligence/security agencies
• Crisis Management Planning/Communication
• Data Security/Privacy
Professional Affiliations
• Overseas Security Advisory Council (OSAC)
• American Hotel Lodging Association (AHLA)
• American Society of Industrial Security (ASIS)
• Hospitality Lawyer
• Association of Certified Fraud Examiners
(ACFE)
Fraud
REDUCING LOSS THROUGH STRATEGIC FRAUD RISK
MANAGEMENT
Vulnerabilities
• Renovation
• Loyalty/Frequency Marketing Programs
• Travel Agency Commission Programs
Loss
5% *
Annual gross revenue is lost to fraud
* ACFE Report to the Nations 2010 & 2012
* University of Portsmouth, Center for Counter Fraud Studies,
2012
Case Studies
Arrested 8 Dec 2011, for theft
of $192K through fraudulent
point redemptions.
Giddens had been depleting
legitimate accounts since 2004
using the computers at a
public library.
Case Studies
Moammar Barq, owner
of Moammar Travel Services,
Nablus Palestine Territory
indicted in US District Court
for generating actual loss of
$1.1M in fraudulent
travel agency commissions
Strategic Fraud Risk
Management
• Governance
• Prevention
• Detection
• Investigation
• Threat Assessment
Q&A
The Perspective of the Major
Brands
Moderator:
Dave Johnson, President and CEO, Aimbridge Hospitality L.P.
Panelists:
Jim Chu, Senior Vice President, Hyatt Hotels Corporation
Mike Deitemeyer, President, Omni Hotels & Resorts
G. Randle McCaslin, Vice President and Practice, PKF Consulting USA
Thomas D. Papelian, Senior Vice President, Marriott International, Inc.
Allison Reid, Senior Vice President, Starwood Hotels & Resorts Worldwide Inc.
Closing Remarks and Thanks
Cindy Nelson
Partner
Thank you for being our guest at the 2013 Dallas Hotel Conference.
For more information on the Dallas Hotel Conference Sponsors,
please see below.
For general conference questions, please contact Elizabeth Conroy (econroy@gardere.com).
David W. Johnson
President and CEO
Aimbridge Hospitality LP
www.aimbridgehospitality.com
Dave.Johnson@aimhosp.com
Clifford J. Risman
Partner
www.gardere.com
crisman@gardere.com
Chuck Bedsole
Managing Director
Alvarez & Marsal Real Estate Advisory Services, LLC
www.alvarezandmarsal.com
ebedsole@alvarezandmarsal.com
John Bourret
Managing Director
HFF
www.hfflp.com
jbourett@hfflp.com

Final Presentations - Dallas Hotel Conference

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