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Hotel Industry Analytical Foundations The SHARE Center Supporting Hotel-related Academic Research and Education.

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1 Hotel Industry Analytical Foundations The SHARE Center Supporting Hotel-related Academic Research and Education

2 Table of Contents Who are the players? - Affiliations, Additional Companies Categorizations - Geographic, Non-geographic Industry Impact and Issues Benchmarking - Comp sets, Reporting Copyright 2011 Smith Travel Research

3 Who are the Players in the Hotel Industry? – Various Hotel Affiliations Copyright 2011 Smith Travel Research

4 Multiple Affiliations for a Single Hotel Chain Parent Company Operation: Corporate, Franchise, or Independent Management Company Owner Asset Management Company Membership or Marketing Groups Copyright 2011 Smith Travel Research

5 Chain The Chain represents the hotel brand This brand is clearly displayed to the public on the building and in all interactions with the customer There are 23 chains in the US with 50,000 rooms or more. WW chains are also available. In some cases, companies organize their hotels by different brands that may not be obvious to the consumer/traveler, i.e.: Hampton Inn vs. Hampton Inn & Suites, Best Western vs. Best Western Plus Copyright 2011 Smith Travel Research

6 Top 23 Chains in the US (by number of rooms) ChainPropertiesRooms Holiday Inn Express1,733146,966 Days Inn1,667129,092 Marriott323127,793 Holiday Inn660117,275 Hampton Inn1,192113,054 Courtyard801112,543 Super 81,851111,300 Comfort Inn1,419111,124 Hilton256104,517 Best Western*1,27297,337 Motel ,141 Quality Inn1,01388,363 La Quinta Inns & Suites80281,690 Residence Inn59772,075 Sheraton18568,556 Hilton Garden Inn48665,844 Best Western Plus70663,906 Hampton Inn Suites59160,399 Fairfield Inn66560,166 Americas Best Value Inn90556,067 Doubletree21455,572 Hyatt10552,612 Ramada46951,589 Copyright 2011 Smith Travel Research US chains w/ 50,000 rooms or more, * STR identifies Best Western as a Parent Company consisting of 3 chains: Best Western, Best Western Plus, and Best Western Premier

7 Copyright 2011 Smith Travel Research Top 24 Chains in the World (by number of rooms) ChainPropertiesRooms Holiday Inn1,200218,887 Best Western2,917206,947 Holiday Inn Express2,130198,622 Hilton551192,046 Marriott492177,274 Sheraton416145,666 Super 82,264143,428 Days Inn1,794140,225 Courtyard917135,308 Comfort Inn1,713128,216 Hampton Inn1,231117,768 Hotel ibis920112,183 Crowne Plaza396108,481 Quality Inn1,198104,495 Motel 61,03399,790 Ramada75792,420 Home Inn78590,005 Mercure71786,750 Best Western Plus93783,934 La Quinta Inns & Suites82083,329 Residence Inn61975,112 Novotel40574,691 Hyatt17274,443 Hilton Garden Inn54074,394 WW Chains with 74,000 rooms or more, notice different chains and different order

8 Parent Company Parent companies consist of multiple chains Often the parent company will have a variety of different types of chains A parent company may have a range of high-end, middle, and low-end chains; or they may concentrate in one area There are 20 parent companies in the US with 10,000 rooms or more Copyright 2011 Smith Travel Research

9 Top 20 Parent Companies in the US (by number of rooms) Parent CompanyPropertiesRooms Hilton Worldwide3,270491,621 Marriott Corp3,035486,678 Wyndham Worldwide5,885455,300 Choice Hotels Intl5,020394,680 InterContinental Hotels Group3,097374,385 Best Western International1,989162,496 Starwood Hotels & Resorts Worldwide471148,520 ACCOR1,070107,227 Hyatt Hotels Corp34090,793 La Quinta Inns80381,881 Extended Stay Hotels68275,764 Carlson Hospitality57664,939 Vantage Hospitality92458,481 Westmont Hospitality Group34836,215 Americas Best Franchising26818,052 Intown Suites Management13817,974 Preferred Hotels & Resorts6717,346 Drury Hotels11416,605 Omni Hotels3914,629 AmericInn International20611,378 Copyright 2011 Smith Travel Research US Parent Companies with 10,000 rooms or more, notice size differences (Starwood vs. Best Western)

10 Copyright 2011 Smith Travel Research Top 21 Parent Companies in the World (by number of rooms) Parent CompanyPropertiesRooms InterContinental Hotels Group4,485649,460 Hilton Worldwide3,816626,372 Marriott International Inc3,552616,758 Wyndham Worldwide7,219615,963 ACCOR4,229511,301 Choice Hotels Intl6,139494,226 Starwood Hotels & Resorts Worldwide Inc1,065314,590 Best Western International4,000307,922 Carlson Hospitality1,077165,129 Hyatt Hotels Corp244102,398 La Quinta Inns Inc82183,520 Extended Stay Hotels68576,264 Vantage Hospitality96861,276 NH Hoteles SA37455,712 Melia Hotels International14947,765 Whitbread PLC59545,808 Campanile Nederland BV58939,092 Westmont Hospitality Group36938,253 Fairmont Raffles Hotels International9937,373 Barcelo Gestion Hotelera S.L.9730,809 Shangri-La International Hotel Management Ltd7130,573 WW Parent Companies with 30,000 rooms or more, notice differences

11 US Parent Companies and Chains – Hilton and Marriott Parent CompanyChainScalePropertiesRooms Hilton WorldwideConradLuxury3860 Waldorf Astoria Hotels&ResortsLuxury137,172 Embassy SuitesUpper Upscale20449,579 HiltonUpper Upscale256104,517 DoubletreeUpscale21455,572 Hilton Garden InnUpscale48665,844 Homewood SuitesUpscale29832,821 Doubletree ClubUpper Midscale81,276 Hampton InnUpper Midscale1,192113,054 Hampton Inn SuitesUpper Midscale59160,399 Home2 Suites by HiltonUpper Midscale5527 Marriott CorpJW MarriottLuxury2112,096 Ritz-CarltonLuxury3811,346 Autograph CollectionUpper Upscale175,239 MarriottUpper Upscale323127,793 Marriott Conference CenterUpper Upscale103,127 RenaissanceUpper Upscale7928,707 CourtyardUpscale801112,543 Residence InnUpscale59772,075 Springhill SuitesUpscale28433,376 Fairfield InnUpper Midscale66560,166 TownePlace SuitesUpper Midscale19819,880 Copyright 2011 Smith Travel Research A list of WW Parent Companies and Chains is available

12 US Parent Companies and Chains – Wyndham and Choice Parent CompanyChainScalePropertiesRooms Wyndham WorldwideWyndham HotelsUpper Upscale5214,681 Ramada PlazaUpper Midscale337,765 Wyndham Garden HotelUpper Midscale193,676 Baymont Inns & SuitesMidscale25921,701 Hawthorn Suites by WyndhamMidscale736,939 Howard JohnsonMidscale909,868 RamadaMidscale46951,589 Wingate By WyndhamMidscale16214,771 Days InnEconomy1,667129,092 Howard Johnson ExpressEconomy21916,312 Knights InnEconomy33621,021 Microtel InnEconomy30221,402 Super 8Economy1,851111,300 TravelodgeEconomy34924,467 Choice Hotels IntlAscend CollectionUpscale474,252 Cambria SuitesUpscale192,215 ClarionUpper Midscale19127,895 Comfort InnUpper Midscale1,419111,124 Comfort SuitesUpper Midscale61747,473 Mainstay SuitesMidscale403,079 Quality InnMidscale1,01388,363 Quality SuitesMidscale353,398 Sleep InnMidscale39328,499 Econo LodgeEconomy79849,597 Rodeway InnEconomy38821,580 Suburban Extended Stay HotelsEconomy607,205 Copyright 2011 Smith Travel Research Some of these Parent Companies have additional WW Chains

13 US Parent Companies and Chains – Intercontinental, Best Western and Starwood Parent CompanyChainScalePropertiesRooms InterContinental Hotels GroupInterContinentalLuxury249,766 Crowne PlazaUpscale16145,874 Hotel IndigoUpscale303,652 Staybridge SuitesUpscale18019,685 Holiday InnUpper Midscale660117,275 Holiday Inn Express HotelUpper Midscale1,733146,966 Holiday Inn SelectUpper Midscale81,810 Candlewood SuitesMidscale30029,260 Best Western InternationalBest Western PlusUpscale70663,906 Best Western PremierUpper Midscale111,253 Best WesternMidscale1,27297,337 Starwood Hotels & ResortsLuxury CollectionLuxury133,920 St RegisLuxury92,061 W HotelLuxury268,371 Le MeridienUpper Upscale71,959 Sheraton HotelUpper Upscale18568,556 WestinUpper Upscale9642,740 aloft HotelsUpscale426,096 elementUpscale91,432 Four PointsUpscale8413,385 Copyright 2011 Smith Travel Research Notice scale stratification: IHG – Luxury through Midscale, BW – Upscale through Midscale, Starwood – Luxury though Upscale)

14 US Parent Companies and Chains – Accor, Hyatt, La Quinta, Extended Stay and Carlson Parent CompanyChainScalePropertiesRooms ACCORSofitel Luxury HotelsLuxury82,635 Motel 6Economy99897,141 Studio 6Economy636,971 Hyatt Hotels CorpAndazLuxury4834 Grand HyattLuxury118,211 Park HyattLuxury4933 HyattUpper Upscale10552,612 Hotel SierraUpscale172,572 Hyatt PlaceUpscale16120,382 Hyatt Summerfield SuitesUpscale385,249 La Quinta Inns IncLa Quinta Inns & SuitesMidscale80281,690 Extended Stay HotelsCrossland SuitesEconomy344,401 Extended Stay AmericaEconomy36640,535 Extended Stay DeluxeEconomy10510,549 HomesteadEconomy13116,728 Studio PlusEconomy463,551 Carlson HospitalityRadissonUpscale11126,494 Park InnUpper Midscale91,919 Country Inn & SuitesMidscale45536,317 Copyright 2011 Smith Travel Research

15 Operation: Corporate, Franchise or Independent A corporate hotel is a chain hotel owned/managed by the chain/parent company A franchise hotel is a chain hotel run by a third party where the chain receives some sort of franchise fee An independent hotel is not affiliated with a chain or parent company OperationPropertiesRooms Chain – Corporate4,541896,550 Chain - Franchise25,5202,469,127 Independent21,8931,494,662 Copyright 2011 Smith Travel Research The Census database includes an Operation field with three codes: 1=Corporate, 2=Franchise, 3=Independent

16 Top US 20 Parent Companies with Number of Corporate and Franchise Properties Parent CompanyCorporateFranchise Hilton Worldwide2852,985 Marriott Corp7132,322 Wyndham Worldwide285,857 Choice Hotels Intl05,020 InterContinental Hotels Group1812,916 Best Western International01,989 Starwood Hotels & Resorts Worldwide ACCOR Hyatt Hotels Corp La Quinta Inns Extended Stay Hotels6820 Carlson Hospitality20556 Vantage Hospitality17907 Westmont Hospitality Group Americas Best Franchising11257 Intown Suites Management1380 Preferred Hotels & Resorts067 Drury Hotels1140 Omni Hotels372 AmericInn International15191 Copyright 2011 Smith Travel Research Notice some Parent Companies have a high percentage of either Corporate or Franchise hotels (Hyatt vs. Choice)

17 Chain Hotels versus Independents in US & WW Percentages based on Number of Rooms 2011 Smith Travel Research, Inc. WW percentage (40/60) is based on hotels in STR database, much harder to find WW independents, probably closer to 30/70 or 20/80 US vs. Non-US - almost opposite!

18 Independent Hotels Copyright 2011 Smith Travel Research There are nearly 22,000 independent hotels in the US which consist of nearly 1.5 million rooms. (There are nearly 92,000 independent hotels in the world in the STR database with over 6.7 million rooms.) Independent hotels vary considerably in size, price level, location, amenities and other attributes Independent hotels can be managed or owned by companies listed on preceding pages. They may also be members of various marketing groups

19 Independent Hotels in US – Drill Down Copyright 2011 Smith Travel Research Number of RoomsProperties 25 or less6, , , , Greater than Class (Price Level)Properties Economy13,901 Midscale2,781 Upper Midscale1,834 Upscale1,589 Upper Upscale1,259 Luxury780 LocationProperties Urban2,190 Suburban5,083 Airport404 Resort2,525 Interstate2,290 Small Town9,652 High percentage of independents in Economy Scale, Small Town Location, and in 50 rooms or less Size group

20 Copyright 2011 Smith Travel Research Sample US Independent Hotels NameCitySTLocationRooms Hotel Del CoronadoCoronadoCAResort757 The Broadmoor HotelColorado SpringsCOResort744 The Sebastian VailVailCOResort100 Hay Adams HotelWashingtonDCUrban145 Turnberry Isle MiamiAventuraFLResort408 Fontainebleau Miami BeachMiami BeachFLResort1,504 Delano HotelMiami BeachFLResort194 The SetaiMiami BeachFLResort135 The BreakersPalm BeachFLResort540 The Sea IslandSea IslandGAResort198 HalekulaniHonolulu - OahuHIResort453 Coeur D Alene ResortCoeur D AleneIDResort338 Windsor CourtNew OrleansLAUrban316 Grove Park Inn ResortAshevilleNCResort512 The SagamoreBolton LandingNYResort384 The New York Helmsley HotelNew YorkNYUrban773 The PierreNew YorkNYUrban189 The MarkNew YorkNYUrban147 Hotel Plaza AtheneeNew YorkNYUrban142 The Rittenhouse HotelPhiladelphiaPAUrban98 The Peabody MemphisMemphisTNUrban464 The GreenbrierWhite Sulphur SpringsWVResort682 Random sample of independents in “Luxury Class” group, WW examples are available

21 Management Company A management company operates a hotel for another party The company has a management contract where it receives payment and/or some portion of profits There are 26 management companies in the US with 7,500 rooms or greater Some chains or parent companies manage their own hotels Management companies may manage a variety of different brands Copyright 2011 Smith Travel Research

22 Top 26 US Management Companies (by number of rooms) Mgt CompanyPropertiesRooms Starwood Hotels & Resorts14168,754 MGM Resorts1847,682 Caesars Entertainment3241,704 InterContinental Hotels19137,625 Interstate Hotels8326,603 Crossroads21025,886 White Lodging15623,447 Pillar Hotels & Resorts23223,282 Columbia Sussex4920,870 Highgate Hotels3318,042 The Procaccianti Group5614,872 Ocean8413,746 Davidson Hotel Company4813,637 GF Management9013,226 Remington Hotels6613,180 Aimbridge Hospitality6512,765 HEI Hotels and Resorts4011,053 Sage5310,931 Rim Corporation8010,903 John Q Hammons4310,544 Boyd Gaming139,554 Noble Investment Group519,455 Hersha Hospitality Management739,345 Kimpton Hotel Group448,336 Crescent Hotels & Resorts388,110 Fairmont Hotels & Resorts177,763 Copyright 2011 Smith Travel Research US Management companies with 7,500 rooms or more, WW examples are available

23 Owner Companies There are many companies that own multiple hotels There are 23 owner companies in the US with 10,000 rooms or greater Some chains or parent companies own their own hotels Owners may own hotels from a variety of different brands Copyright 2011 Smith Travel Research

24 Top 23 US Owner Companies (by number of rooms) OwnerPropertiesRooms Accor North America64072,620 Host Hotels & Resorts10560,658 MGM Resorts1847,682 Hospitality Properties Trust28341,478 Caesars Entertainment2939,653 Archon Hospitality34637,103 Clarion Partners17425,567 Walt Disney World Resorts1923,865 FelCor7822,510 Ashford Hospitality Trust9821,488 R L J Lodging Trust14020,794 Inland American Lodging Group10116,424 Morgan Stanley Real Estate3515,247 Tharaldson Lodging20013,566 JER Partners16413,548 Highgate Hotels2313,535 Cornerstone3913,095 Apple REIT Nine9812,317 Sunstone Hotel Investors3212,272 The Procaccianti Group4612,064 DiamondRock Hospitality Comp2511,326 Omni Hotels2911,109 Atrium4310,544 Copyright 2011 Smith Travel Research Owners with 10,000 rooms or more, WW examples are available

25 Asset Management Company An Asset Management Company represents the owner in the operation of a hotel A hotel may have both a Management Company and an Asset Management Company There are 25 Asset Management Companies in the US with 1,000 rooms or greater Copyright 2011 Smith Travel Research

26 Top 25 US Asset Management Companies (by number of rooms) Asset Mgt CompanyPropertiesRooms Pyramid Advisors, LLC6625,363 Capital Hotel Management1812,304 The Chartres Lodging AssetMgt139,840 IStar Financial198,531 Garfield Taub Development187,946 Host Hotels & Resorts AssetMgt537,611 Sceptre226,740 BetaWest234,653 Woodbine Development Corp73,561 Omni Hotels AssetMgt103,456 S C S Advisors AssetMgt83,409 Hotel Asset Value Enhancement113,052 Lodging Capital Partners, LLC82,992 TR Engel Group, LLC32,231 Wright Hotels, Inc AssetMgt21,599 Millennium Partners51,549 GF Management AssetMgt51,513 Supertel Hospitality AssetMgt111,354 CHIC Advisors31,352 Red Lion Hotels51,242 Bentall Kennedy41,125 Integrated Capital LLC51,083 TriMont Real Estate Advisors51,080 Carr Hospitality41,035 Ashford41,030 Copyright 2011 Smith Travel Research Asset management companies with 1,000 rooms or more

27 Membership and Marketing Groups Hotels can be members of various organizations that provide additional benefits These groups may provide marketing assistance They may provide reservation services They may have a focus on certain types of hotels There are several memberships groups that STR currently tracks Copyright 2011 Smith Travel Research

28 Top US Membership Groups Membership GroupPropertiesRooms Magnuson1,30071,814 Historic Hotels Of America23745,334 Preferred Lodging12028,422 Leading Hotels4016,541 World Hotels3912,945 K Hotels276,471 Carino Hotels & Resorts WW256,110 Summit315,746 Sterling Hotels184,916 Luxe Hotels464,458 Small Luxury Hotels382,575 AHMI - RES Hotel112,384 Design Hotels6929 Grand Tradition Hotels & Resorts5874 Avantgarde Hotels4773 Epoque4611 Copyright 2011 Smith Travel Research Membership groups 500 rooms or more; there are additional WW groups

29 Questions Review the six different types of players in the lodging industry What are some reasons that all these players exist? Why do parent companies create multiple brands? What are the advantages and disadvantages of having so many different players in the hotel industry? Contrast independent versus chain hotels in and outside of the US Copyright 2011 Smith Travel Research

30 Who are the Players? – Additional Companies and Organizations Copyright 2011 Smith Travel Research

31 Convention and Visitor Bureaus and Local Tourism Organizations Most cities and states have organizations that serve hotels and promote tourism STR provides Destination Reports to nearly 500 different organizations in the US These organizations may have different names: CVBs, Local Hotel Associations, Travel or Tourism Organizations, or Destination Marketing Organizations (DMOs) Copyright 2011 Smith Travel Research

32 Hotel-related Associations There are many large associations that represent the interests of hotels: –American Hotel and Lodging Association (AHLA) –US Travel Association (US Travel) –Hospitality Sales and Marketing Association Int’l (HSMAI) –Hospitality Financial & Technology Professionals (HFTP) –Tourism and Travel Research Association (TTRA) –Destination Marketing Association Int’l (DMAI) –American Resort Development Association (ARDA) Copyright 2011 Smith Travel Research

33 Additional Associations There are other associations that represent specific groups of hotel professionals: –Hotel Asset Management Association (HAMA) –Global Business Travel Association (GBTA) –Association of Corporate Travel Executives (ACTE) –International Society of Hospitality Consultants (ISHC) –Industry Real Estate Financing Advisory Council (IREFAC) –Hotel Electronic Distribution Network Assoc (HEDNA) –Meeting Planners International (MPI) Copyright 2011 Smith Travel Research

34 Special Associations There are associations that focus on ethnicities: –Asian American Hotel Owner Association (AAHOA) –National Association of Black Hotel Owners, Operators, and Developers (NABHOOD) –Latino Hotel Association (LHA) There are associations that focus on education: –International Council on Hotel, Restaurant, and Institutional Education (ICHRIE) –American Hotel & Lodging Educational Institute (AHLEI) Copyright 2011 Smith Travel Research

35 Financial/Wall Street Firms Wall Street firms have significant interests in the hotel industry. Here are samples: –Citigroup-- Goldman Sachs –Wells Fargo-- JP Morgan –UBS-- Nomura –Deutsche Bank-- American Express –Barclays-- Baird –Bank of America-- Standard & Poor’s Copyright 2011 Smith Travel Research

36 Developers, Consultants & Appraisers Many consulting firms have concentrations in the hotel industry. Here are samples: –PKF -- PWC –McKinsey-- Deloitte –Cushman & Wakefield-- HVS –Tourism Economics-- Y Partnership –Ernst & Young--- Jones Lang LaSalle Copyright 2011 Smith Travel Research

37 Hotel-related Media Samples of printed media (also online presence): –Lodging Magazine-- Hotel Business –Hotels-- Hotel Management –Business Travel News Samples of electronic media: –HotelNewsNow.com (HNN)-- Hotel-Online –AHLA Smart Brief-- Hospitality Business News –Daily Hotel Industry News-- Hospitality Net 360 –Hotel Interactive Daily e-News-- HotelMarketing.com Copyright 2011 Smith Travel Research

38 The US Government Many government departments are related to the hotel industry: –General Service Administration/Office of Management & Budget (GSA/OMB) – set per diems rates for federal travelers (used by others) –Defense Travel Management Office (DTMO) – responsible for travel for armed service members –Department of State (DOS) – responsible for international travel –Federal Emergency Management Agency (FEMA) - tracks US hotels including fire-safe designation –Bureau of Labor & Statistics (BLS) - tracks hotel industry stats –Commerce Department - reviews industry impact issues –Homeland Security – interested in hotels related to preparedness –National Park Service - there are hotels in many national parks –Federal Reserve Banks – interested in distressed hotels Copyright 2011 Smith Travel Research

39 Hotel-related Conferences There are many national hotel and tourism conferences. Here are samples: –New York Hotel and Restaurant Show-- ALIS –Lodging Conference-- NYU –Midwest Lodging Investment Summit-- Hunter Conference –AHLA Resort Conference-- HITEC/ROC –Marketing Outlook Forum-- ULI –HSMAI Revenue Optimization Conf –STR’s Hotel Data Conference Copyright 2011 Smith Travel Research

40 The Educational Community There are nearly 300 universities in the US that have some sort of hospitality or tourism undergraduate department. There are over 700 universities in the world. There are nearly 500 junior colleges, community colleges and post-secondary technical schools that have programs in hospitality or tourism. There are nearly 100 universities in the US that offer masters programs and nearly 25 that offer PHD programs in hospitality or tourism. Copyright 2011 Smith Travel Research

41 Questions Briefly describe some of the additional players in the hotel industry other than hotel companies What role do hotel-related associations serve? What is the value of hotel-related industry conferences? How does the US government use hotel data? Why is it important for the hotel-related educational community to be closely connected to the hotel industry? Copyright 2011 Smith Travel Research

42 Hotel Industry Categorization – Geographic Copyright 2011 Smith Travel Research

43 Continents and Sub-continents STR defines these related to the hotel industry There are 4 continents: Americas, Europe, Mideast/Africa and Asia Pacific Each continent includes three to four sub-continents STR is continually updating the census database of hotels to increase the numbers of properties around the world Copyright 2011 Smith Travel Research

44 Global Hotels by Continent and Sub-continent (as of Jan 2012) ContinentSub-ContinentPropertiesRooms AmericasCaribbean2,270246,102 Central America84748,738 North America63,1865,636,306 South America2,788299,409 Asia PacificAustralia & Oceania4,953298,358 Central & South Asia2,991198,599 Northeastern Asia9,4641,830,382 Southeastern Asia3,245486,755 EuropeEastern Europe3,819359,268 Northern Europe11,345795,884 Southern Europe15,8821,561,239 Western Europe21,5981,288,134 Middle East & AfricaMiddle East1,120199,008 Northern Africa1,300276,356 Southern Africa1,549146,575 TOTAL WORLD146,35713,671,113 Copyright 2011 Smith Travel Research

45 Americas - Countries & Sub-continents Sub-ContinentCountry CaribbeanAnguilla CaribbeanAntigua / Barbuda CaribbeanAruba CaribbeanBahamas CaribbeanBarbados CaribbeanBermuda CaribbeanBritish Virgin Islands CaribbeanCayman Islands CaribbeanCuba CaribbeanCuracao CaribbeanDominica CaribbeanDominican Republic CaribbeanGrenada CaribbeanGuadeloupe CaribbeanHaiti CaribbeanJamaica CaribbeanMartinique CaribbeanMontserrat CaribbeanNetherlands Antilles CaribbeanPuerto Rico CaribbeanSt Kitts / Nevis CaribbeanSt Lucia CaribbeanSt Vincent / the Grenadines CaribbeanTrinidad / Tobago CaribbeanTurks / Caicos Islands CaribbeanUS Virgin Islands Americas - Countries & Sub-continents Sub-ContinentCountry Central AmericaBelize Central AmericaCosta Rica Central AmericaEl Salvador Central AmericaGuatemala Central AmericaHonduras Central AmericaNicaragua Central AmericaPanama North AmericaCanada North AmericaGreenland North AmericaMexico North AmericaUnited States South AmericaArgentina South AmericaBolivia South AmericaBrazil South AmericaChile South AmericaColombia South AmericaEcuador South AmericaFrench Guiana South AmericaGuyana South AmericaParaguay South AmericaPeru South AmericaSuriname South AmericaUruguay South AmericaVenezuela Americas consists of 4 continents and 50 countries

46 Copyright 2011 Smith Travel Research Asia Pacific - Countries & Sub-continents Sub-ContinentCountry Australia & OceaniaAmerican Samoa Australia & OceaniaAustralia Australia & OceaniaCook Islands Australia & OceaniaFiji Australia & OceaniaFrench Polynesia Australia & OceaniaGuam Australia & OceaniaMarshall Islands Australia & OceaniaMicronesia Australia & OceaniaNew Caledonia Australia & OceaniaNew Zealand Australia & OceaniaNorthern Mariana Islands Australia & OceaniaPalau Australia & OceaniaPapua New Guinea Australia & OceaniaSamoa Australia & OceaniaSolomon Islands Australia & OceaniaTonga Australia & OceaniaVanuatu Central & South AsiaBangladesh Central & South AsiaBhutan Central & South AsiaIndia Central & South AsiaMaldives Central & South AsiaNepal Central & South AsiaPakistan Central & South AsiaSri Lanka Asia Pacific - Countries & Sub-continents Sub-ContinentCountry Northeastern AsiaChina Northeastern AsiaJapan Northeastern AsiaMongolia Northeastern AsiaSouth Korea Northeastern AsiaTaiwan Southeastern AsiaBrunei Southeastern AsiaCambodia Southeastern AsiaEast Timor Southeastern AsiaIndonesia Southeastern AsiaLaos Southeastern AsiaMalaysia Southeastern AsiaMyanmar Southeastern AsiaPhilippines Southeastern AsiaSingapore Southeastern AsiaThailand Southeastern AsiaVietnam Asia Pacific consists of 4 continents and 40 countries

47 Copyright 2011 Smith Travel Research Europe - Countries & Sub-continents Sub-ContinentCountry Eastern EuropeArmenia Eastern EuropeAzerbaijan Eastern EuropeBelarus Eastern EuropeBulgaria Eastern EuropeCzech Republic Eastern EuropeGeorgia Eastern EuropeHungary Eastern EuropeKazakhstan Eastern EuropeKyrgyzstan Eastern EuropeMoldova Eastern EuropePoland Eastern EuropeRomania Eastern EuropeRussia Eastern EuropeSlovakia Eastern EuropeTajikistan Eastern EuropeTurkmenistan Eastern EuropeUkraine Eastern EuropeUzbekistan Northern EuropeDenmark Northern EuropeEstonia Northern EuropeFinland Northern EuropeIceland Northern EuropeIreland Northern EuropeLatvia Northern EuropeLithuania Northern EuropeNorway Northern EuropeSweden Northern EuropeUnited Kingdom Europe - Countries & Sub-continents Sub-ContinentCountry Southern EuropeAlbania Southern EuropeAndorra Southern EuropeBosnia / Herzegovina Southern EuropeCroatia Southern EuropeCyprus Southern EuropeGibraltar Southern EuropeGreece Southern EuropeIsrael Southern EuropeItaly Southern EuropeMacedonia Southern EuropeMalta Southern EuropeMontenegro Southern EuropePortugal Southern EuropeSan Marino Southern EuropeSerbia Southern EuropeSlovenia Southern EuropeSpain Southern EuropeTurkey Western EuropeAustria Western EuropeBelgium Western EuropeFrance Western EuropeGermany Western EuropeLiechtenstein Western EuropeLuxembourg Western EuropeMonaco Western EuropeNetherlands Western EuropeSwitzerland Europe consists of 4 continents and 55 countries

48 Copyright 2011 Smith Travel Research Mideast Africa - Countries & Sub-continents Sub-ContinentCountry Middle EastAfghanistan Middle EastBahrain Middle EastIran Middle EastIraq Middle EastJordan Middle EastKuwait Middle EastLebanon Middle EastOman Middle EastQatar Middle EastSaudi Arabia Middle EastSyria Middle EastUnited Arab Emirates Middle EastYemen Northern AfricaAlgeria Northern AfricaBurkina Faso Northern AfricaChad Northern AfricaDjibouti Northern AfricaEgypt Northern AfricaEritrea Northern AfricaLibya Northern AfricaMali Northern AfricaMauritania Northern AfricaMorocco Northern AfricaNiger Northern AfricaSudan Northern AfricaTunisia Mideast Africa - Countries & Sub-continents Sub-ContinentCountry Southern AfricaAngola Southern AfricaBenin Southern AfricaBotswana Southern AfricaBurundi Southern AfricaCameroon Southern AfricaCape Verde Southern AfricaCote D`Ivoire Southern AfricaDemocratic Republic Of Congo Southern AfricaEquatorial Guinea Southern AfricaEthiopia Southern AfricaGabon Southern AfricaGambia Southern AfricaGhana Southern AfricaGuinea Southern AfricaKenya Southern AfricaLesotho Southern AfricaMadagascar Southern AfricaMalawi Southern AfricaMauritius Southern AfricaMozambique Southern AfricaNamibia Southern AfricaNigeria Southern AfricaRepublic Of Congo Southern AfricaReunion Southern AfricaRwanda Southern AfricaSao Tome / Principe Southern AfricaSenegal Southern AfricaSeychelles Southern AfricaSouth Africa Southern AfricaSwaziland Southern AfricaTanzania Southern AfricaTogo Southern AfricaUganda Southern AfricaZambia Southern AfricaZimbabwe Mideast Africa consists of 3 continents and 61 countries

49 Countries STR uses the WTO definition when it comes to recognizing countries Territories such as the Virgin Islands would appear as separate countries There are 206 countries with one or more hotels. There are a small handful of countries without any hotels (in the STR Census database). There are 26 countries with 75,000 rooms or greater Copyright 2011 Smith Travel Research

50 Top Countries in the World (by number of rooms) CountryPropertiesRooms United States51,9544,860,339 China6,8721,326,242 Germany8,855544,482 Spain4,279532,975 United Kingdom7,910491,114 Canada7,888438,442 France6,932417,784 Japan2,078404,523 Mexico3,340337,233 Italy5,388329,348 Australia3,913232,498 Turkey1,446224,896 Brazil1,365174,871 Greece1,895168,547 India2,678166,687 Egypt595153,289 Thailand823137,018 Portugal1,328111,652 Switzerland2,373106,235 Indonesia896103,284 Malaysia421102,348 United Arab Emirates46589,555 Austria1,40285,612 Sweden88981,628 Russia52479,747 Netherlands1,14078,677 Copyright 2011 Smith Travel Research Countries with more than 75,000 hotel rooms

51 This map identifies hotels that submit performance data to STR

52 The United States There are nearly 52,250 hotels in the US at the current time. STR organizes these hotels into many different geographic and non-geographic categories. Examples will follow in this presentation. STR also tracks performance information for the total US as well as all other countries. A top level US summary will follow in this presentation. STR also provides detailed overviews of US lodging performance. Copyright 2011 Smith Travel Research

53 Hotels in the US Notice where the concentrations of hotels are located

54 Regions Within a Country STR organizes larger countries into Regions The nine regions in the US correspond to the government Census regions The US regions have varying numbers of hotels and behave differently when it comes to metrics such as ADR Other countries such as Canada, UK, and Germany also have regions Copyright 2011 Smith Travel Research

55 Nine US Regions Nine geographic regions corresponding to the government Census areas

56 US Regions based on the Government Census RegionPropertiesRoomsADR New England2,102177,784$ Middle Atlantic3,991415,864$ South Atlantic10,8381,117,814$97.41 East North Central6,033544,714$85.28 East South Central3,720310,502$75.29 West North Central4,194329,095$77.92 West South Central6,853595,450$82.51 Mountain5,177576,006$89.53 Pacific7,854720,726$ Copyright 2011 Smith Travel Research South Atlantic and Pacific are the two largest regions, Middle Atlantic has the highest ADR

57 States (and Provinces) Many countries have geographic divisions of states or provinces Hotel data by state or province is very popular States vary widely when it comes to number of hotels and metrics such as ADR or Occupancy The next couple of slides show top US states by various metrics. WW data is also available (i.e.: Canada by Province). Copyright 2011 Smith Travel Research

58 Top States (by number of rooms) StatePropertiesRooms California5,493500,341 Florida3,574409,094 Texas4,524401,352 Nevada573196,236 New York1,791190,401 Georgia1,966178,726 Illinois1,433157,693 Virginia1,453150,078 North Carolina1,617141,249 Pennsylvania1,333127,252 Ohio1,336121,095 Tennessee1,400120,401 Arizona1,118110,681 Michigan1,245105,094 Missouri1,117103,930 Colorado1,151102,798 South Carolina1,061102,193 New Jersey86798,211 Washington99186,018 Louisiana81885,243 Copyright 2011 Smith Travel Research Three largest states (by far) are CA, FL and TX

59 Top States (by ADR) StateADR Washington DC$ New York$ Hawaii$ Massachusetts$ Alaska$ Rhode Island$ Vermont$ California$ Maryland$ New Jersey$ Florida$ Colorado$ New Hampshire$ Illinois$ Delaware$ Pennsylvania$99.75 Connecticut$98.17 Washington$98.05 Virginia$96.26 Maine$95.72 Top States (by Occupancy) StateOccupancy Washington DC74.1% Hawaii70.7% New York69.3% North Dakota68.0% Alaska65.1% California63.2% Massachusetts62.3% West Virginia61.8% Louisiana60.7% Rhode Island60.3% Washington60.1% Maryland59.4% Pennsylvania59.4% Florida59.2% Illinois58.6% Nevada58.0% New Jersey57.3% Minnesota57.1% Vermont57.0% New Mexico56.8% Copyright 2011 Smith Travel Research DC, NY, and HI on top for both

60 Markets in the US The US is broken up into 162 geographic areas called markets. There are 94 metro markets (cities) and 68 non-metro markets (rural areas). The metro markets are sometimes separated into major cities and secondary cities. Many industry publications display metrics for the “Top 25 Markets”. These markets are roughly based on Number of Rooms and exclude Las Vegas. Markets roughly correspond to government MSAs and sometimes cross state borders. Copyright 2011 Smith Travel Research An example of an exception - the Miami MSA includes Ft. Lauderdale. STR uses two markets, one for Miami and another for Ft. Lauderdale.

61 WW Markets Countries outside the US contain varying numbers of markets depending upon the number of hotels and the participation. Smaller countries may consist of just a single market. Countries that are slightly larger may consist of a market for the major city and then a second market for all of the other hotels, named something like “Country Name Area” or “Country Regional”. Larger countries will have many markets just like the US. Copyright 2011 Smith Travel Research The number of markets will increase as hotels and participation increase

62 Top 25 US Markets (roughly related to Supply, excluding Las Vegas) Market Properties Rooms Orlando, FL ,842 Chicago, IL ,606 Washington, DC-MD-VA ,654 New York, NY ,616 Los Angeles-Long Beach, CA ,138 Atlanta, GA ,673 Dallas, TX ,866 Houston, TX ,689 Phoenix, AZ ,094 San Diego, CA ,149 Anaheim-Santa Ana, CA ,697 San Francisco/San Mateo, CA ,509 Boston, MA ,086 Miami-Hialeah, FL ,879 Tampa-St Petersburg, FL ,279 Philadelphia, PA-NJ ,572 Detroit, MI ,128 Seattle, WA ,552 Denver, CO ,052 Norfolk-Virginia Beach, VA ,357 St Louis, MO-IL ,044 Minneapolis-St Paul, MN-WI ,841 New Orleans, LA ,635 Nashville, TN ,390 Oahu Island, HI 89 29,125 Copyright 2011 Smith Travel Research These are the ones that are tracked in the US Monthly and Weekly Hotel Reviews

63 Copyright 2011 Smith Travel Research Top 25 WW Markets (based upon number of rooms) MarketPropertiesRooms East China excl Hangzhou1,800296,190 South Central China Regional1,159246,742 Turkey1,448222,997 Shanghai926175,576 Beijing889170,028 Las Vegas, NV372169,195 Central Mexico1,974161,232 Western China827153,192 Greece1,695145,223 Regional Southern Germany2,907138,164 Western France2,371125,794 Orlando, FL469117,521 Red Sea Resorts400115,370 Portugal1,337112,040 Greater London1,173110,836 Malaysia468106,934 Chicago, IL712106,675 Washington, DC-MD-VA673104,778 Eastern Spain excluding Barcelona890102,248 Canary Islands462101,793 New York, NY548101,453 Los Angeles-Long Beach, CA98597,029 Brazil Area75795,292 Atlanta, GA78393,293 Regional Western Germany1,89692,842 Some of these markets are related to participation, i.e. Turkey (country)

64 Top US Metro Markets (by number of properties) Market Properties Rooms Los Angeles-Long Beach, CA ,138 Atlanta, GA ,673 Houston, TX ,689 Chicago, IL ,606 Washington, DC-MD-VA ,654 Dallas, TX ,866 New York, NY ,616 Riverside-San Bernardino, CA ,947 Orlando, FL ,842 San Diego, CA ,149 Tampa-St Petersburg, FL ,279 Phoenix, AZ ,094 Anaheim-Santa Ana, CA ,697 San Francisco/San Mateo, CA ,509 San Antonio, TX ,782 Las Vegas, NV ,171 Detroit, MI ,128 Norfolk-Virginia Beach, VA ,357 Philadelphia, PA-NJ ,572 Miami-Hialeah, FL ,879 Copyright 2011 Smith Travel Research Notice that markets such as Chicago, DC, and NY have larger hotels

65 Top US Metro Markets (by Occupancy) Market Occupancy Properties Rooms New York, NY 80.8% ,358 Oahu Island, HI 78.2% 88 29,076 San Francisco/San Mateo, CA 75.2% ,663 Miami-Hialeah, FL 70.4% ,435 Florida Keys 70.3% 167 8,841 Boston, MA 68.6% ,816 Maui Island, HI 68.1% ,922 Anaheim-Santa Ana, CA 67.8% ,549 Los Angeles-Long Beach, CA 67.8% ,680 Fort Lauderdale, FL 67.4% ,727 Washington, DC-MD-VA 67.0% ,624 Newark, NJ 66.6% ,692 Bergen-Passaic, NJ 66.5% 75 9,566 San Diego, CA 66.4% ,202 Pittsburgh, PA 66.2% ,237 Seattle, WA 65.5% ,556 Long Island 64.9% ,729 San Jose-Santa Cruz, CA 64.5% ,241 New Orleans, LA 64.4% ,192 Charleston, SC 64.1% ,692 Copyright 2011 Smith Travel Research Top markets by Occ – NY, HI, San Fran, Miami, Keys, and Boston

66 Top US Metro Markets (by ADR) Market ADR Properties Rooms New York, NY $ ,358 Maui Island, HI $ ,922 Hawaii-Kauai Islands $ ,559 Florida Keys $ ,841 Oahu Island, HI $ ,076 Miami-Hialeah, FL $ ,435 Washington, DC-MD-VA $ ,624 Boston, MA $ ,816 San Francisco/San Mateo, CA $ ,663 West Palm Beach-Boca Raton, FL $ ,559 San Diego, CA $ ,202 Long Island $ ,729 Fort Myers, FL $ ,088 Los Angeles-Long Beach, CA $ ,680 New Orleans, LA $ ,192 Chicago, IL $ ,024 Seattle, WA $ ,556 Scranton--Wilkes-Barre, PA $ ,139 Anaheim-Santa Ana, CA $ ,549 Philadelphia, PA-NJ $ ,343 Copyright 2011 Smith Travel Research Top markets by ADR – NY, HI, Keys, Miami, DC, Boston, and San Fran

67 US Tracts (also called Sub-markets) Tracts are geographic sub-divisions of a market. There may be anywhere from two to ten or more tracts in a market. In a metro market, there is usually a tract for the downtown area, sometimes called the CBD (Central Business District). There may be other tracts identified such as North/South/East/West, or Airport/Beach, or for suburban neighborhoods. In non-metro (rural) markets a tract may represent a small city. There are 622 tracts in the US. Copyright 2011 Smith Travel Research

68 WW Sub-markets Outside of North America, STR/STR Global uses the term “sub-market” instead of tract. The number of sub-markets depend upon the size of the market. Small markets may only consist of a single sub- market. Larger markets will be sub-divided just like the US. As the number of hotels and participation increases, additional sub-markets will be created. Copyright 2011 Smith Travel Research

69 Top Tracts (by ADR) TractADR PropertiesRooms Uptown/Midtown East$ ,684 Maui Area HI$ ,337 Times Square Area$ ,872 Lower Manhattan$ ,929 Colorado Ski Area$ ,261 Kaanapali/Lahaina/Kapalua$ ,585 Washington DC (CBD)$ ,431 Santa Monica/Marina Del Rey$ ,513 Hollywood-Beverly Hills$ ,846 Miami Beach$ ,458 Key West$ ,670 Boston Downtown/Airport$ ,201 Kauai$ ,789 Hawaii (Big Island)$ ,770 Arlington, VA$ ,205 Upper Florida Keys$ ,171 Chicago Downtown$ ,388 Naples MSA$ ,460 Fort Myers Beach/Sanibel Islan$ ,003 Monterey/Salinas MSA$ ,625 Copyright 2011 Smith Travel Research Notice differences between markets and tracts – Ski area, CA tracts

70 Top 20 Tracts (by Occupancy) TractOccupancy PropertiesRooms Times Square Area85.2%10832,872 Lower Manhattan82.4%14323,929 Uptown/Midtown East81.7%8320,684 Waikiki79.5%7425,331 Key West78.0%904,670 S F - Nob Hill/Wharf77.9%12915,479 San Francisco - Market St76.9%9218,531 Miami Airport-Civic Center76.8%7611,463 Santa Monica/Marina Del Rey76.6%585,513 New York City Area75.9%14213,237 Boston Downtown/Airport75.7%7218,201 Los Angeles Airport75.3%9815,691 Hollywood-Beverly Hills74.8%12812,846 Washington DC (CBD)74.1%11527,431 San Francisco Airport74.0%628,812 Lake Buena Vista73.7%4532,479 Cambridge/Waltham73.4%557,931 Arlington, VA73.4%4210,205 Shreveport MSA73.4%8310,322 Charleston/West Ashley73.2%506,120 Copyright 2011 Smith Travel Research Compare differences between markets and tracts, also occupancy and ADR

71 Other US Geographic Categories Counties –Hotels are organized into the standard county designations. –County data is often used for low-level impact analyses. –Participation is sometimes a factor for many counties. There are 2,773 counties in the US with one or more hotels. There are 1,309 counties with four or more reporting hotels (47%). Zip Codes –Zip code is the lowest geographic unit in the US. –Participation is frequently a factor for zip codes. There are 11,037 zip codes in the US with one or more hotels. There are 2,794 zip codes with four or more reporting hotels (25%). MSAs (available) Copyright 2011 Smith Travel Research Many countries have some sort of postal code

72 Top 10 Counties (by Occupancy) CountyOccupancy Properties Rooms New York County, NY83.4% ,485 Honolulu County, HI78.2% 88 29,076 Ward County, ND77.8% 18 1,793 Queens County, NY77.7% 80 8,472 San Francisco County, CA77.3% ,061 Stark County, ND76.9% Lycoming County, PA76.4% 12 1,122 Washington County, PA75.4% 22 1,838 Suffolk County, MA75.3% 82 19,800 Top 10 Counties (by ADR) CountyADR Properties Rooms Pitkin County, CO$ ,716 New York County, NY$ ,485 Eagle County, CO$ ,866 Maui County, HI$ ,922 Napa County, CA$ ,312 Summit County, UT$ ,881 District of Columbia, DC$ ,431 Kauai County, HI$ ,789 Suffolk County, MA$ ,800 Copyright 2011 Smith Travel Research

73 Latitudes and Longitudes for Hotels Latitudes and Longitudes are available for hotels throughout the world These allow you to view hotels with various mapping programs. You can also perform radial queries, i.e.: select all hotels within two miles of the convention center. The lat/longs for North America are very accurate. Outside North America, some countries are very good. In smaller, developing countries lat/longs may be less reliable. Copyright 2011 Smith Travel Research

74 Hotel Industry Categorization – Non-Geographic Copyright 2011 Smith Travel Research

75 Scale The Scale category is one of the most popular ways the industry looks at different hotels There are seven Scale categories, six for chain hotels ranging from Luxury to Economy, and one Scale category for all Independent hotels Chains are positioned in Scale groups based upon the average annual ADR of all hotels in the chain. STR revaluates this every year. (STR revised the Scale categories in Midscale changed from “with and without F&B” to Upper Midscale and Midscale.) Copyright 2011 Smith Travel Research

76 US Scales ScaleOccupancyADRPropertiesRooms Luxury Chains66.5%$ ,185 Upper Upscale Chains67.4%$ ,494547,641 Upscale Chains66.8%$ ,652565,703 Upper Midscale Chains58.4%$91.427,674766,494 Midscale Chains51.7%$73.686,374563,582 Economy Chains51.6%$ ,271781,825 Independents54.7%$ ,9191,438,525 Copyright 2011 Smith Travel Research Notice the average ADRs for each Chain Scale group and Independents Notice the numbers of Props and Rooms and size differences

77 US Luxury Chains (with 5 or more properties sorted by number of rooms) Chain Properties Rooms JW Marriott 21 12,096 Ritz-Carlton 38 11,346 InterContinental 24 9,766 W Hotel 26 8,371 Grand Hyatt 11 8,211 Four Seasons 29 7,908 Loews 16 7,511 Waldorf Astoria Hotels & Resorts 13 7,172 Fairmont 17 7,155 Luxury Collection 13 3,920 Sofitel Luxury Hotels 8 2,635 Trump Hotel Collection 5 2,370 Affinia 7 2,064 St Regis 9 2,061 Mandarin Oriental Hotel Group 6 1,672 RockResorts 10 1,165 AKA Rosewood Copyright 2011 Smith Travel Research WW Chains by Scale are available

78 US Upper Upscale Chains (with 5 or more properties sorted by number of rooms) Chain Properties Rooms Marriott ,793 Hilton ,517 Sheraton Hotel ,556 Hyatt ,612 Embassy Suites ,579 Westin 96 42,740 Renaissance 79 28,707 Wyndham Hotels 52 14,681 Omni 38 14,530 Kimpton 49 9,496 Millennium Hotels 14 5,915 Autograph Collection 17 5,239 Joie De Vivre 29 3,681 Hard Rock 6 3,354 Marriott Conference Center 10 3,127 Club Quarters 11 2,866 Le Meridien 7 1,959 Dolce Hotels 7 1,684 Copyright 2011 Smith Travel Research

79 US Upscale Chains (with 5 or more properties sorted by number of rooms) Chain Properties Rooms Courtyard ,543 Residence Inn ,075 Hilton Garden Inn ,844 Doubletree ,572 Crowne Plaza ,874 Springhill Suites ,376 Homewood Suites ,821 Radisson ,494 Disney Hotels 20 24,082 Hyatt Place ,382 Staybridge Suites ,685 Four Points 84 13,385 aloft Hotels 42 6,096 Hyatt Summerfield Suites 38 5,249 Aston Hotels 26 4,416 Ascend Collection 47 4,252 Great Wolf Lodge 10 3,747 Hotel Indigo 30 3,652 Outrigger 17 2,897 Grand America Hotels & Resort 6 2,708 Hotel Sierra 17 2,572 Cambria Suites 19 2,215 Coast Hotels 12 1,758 element 9 1,432 Legacy Vacation Club8791 Copyright 2011 Smith Travel Research

80 US Upper Midscale Chains (with 5 or more properties sorted by number of rooms) Chain Properties Rooms Holiday Inn Express Hotel 1, ,966 Holiday Inn ,275 Hampton Inn 1, ,054 Comfort Inn 1, ,124 Best Western Plus ,906 Hampton Inn Suites ,399 Fairfield Inn ,166 Comfort Suites ,473 Clarion ,895 TownePlace Suites ,880 Drury Inn & Suites 73 11,142 Ramada Plaza 33 7,765 Wyndham Garden Hotel 19 3,676 Xanterra Parks & Resorts 23 3,280 Isle of Capri 9 3,171 Ayres 20 2,625 Lexington 19 2,414 Drury Inn 19 2,220 Park Inn 9 1,919 Holiday Inn Select 8 1,810 Chase Suites 13 1,693 Drury Plaza Hotel 5 1,391 Silver Cloud 10 1,383 Doubletree Club 8 1,276 Best Western Premier 11 1,253 Phoenix Inn Palms Hotels & Resorts Home2 Suites by Hilton Copyright 2011 Smith Travel Research

81 US Midscale Chains (with 5 or more properties sorted by number of rooms) Chain Properties Rooms Best Western 1,272 97,337 Quality Inn 1,013 88,363 La Quinta Inns & Suites ,690 Ramada ,589 Country Inn & Suites ,317 Candlewood Suites ,260 Sleep Inn ,499 Baymont Inns & Suites ,701 Wingate By Wyndham ,771 AmericInn ,644 Howard Johnson 90 9,868 Red Lion 44 8,487 Hawthorn Suites by Wyndham 73 6,939 Shilo Inn 41 4,565 Quality Suites 35 3,398 Mainstay Suites 40 3,079 Vagabond Inn 42 3,003 Oak Tree Inn 28 2,060 Settle Inn 15 1,060 InnSuites Hotels Crystal Inn Cabot Lodge GrandStay Residential Suites Vista ClubHouse Crossings by GrandStay America`s Best Suites Copyright 2011 Smith Travel Research

82 US Economy Chains (with 25 or more properties sorted by number of rooms) Chain Properties Rooms Days Inn 1, ,092 Super 8 1, ,300 Motel ,141 Americas Best Value Inn ,067 Econo Lodge ,597 Extended Stay America ,535 Red Roof Inn ,215 Travelodge ,467 Rodeway Inn ,580 Microtel Inn ,402 Knights Inn ,021 Value Place ,735 InTown Suites ,974 Homestead ,728 Howard Johnson Express ,312 Extended Stay Deluxe ,549 Jameson Inn 116 7,345 Suburban Extended Stay Hotels 60 7,205 Studio ,971 Country Hearth Inn 103 6,862 Budget Suites of America 18 6,848 Red Carpet Inns 122 6,764 Budget Host 159 5,902 America`s Best Inns 97 5,847 GuestHouse Inns 69 5,736 Crossland Suites 34 4,401 Scottish Inns 115 4,321 Studio Plus 46 3,551 National ,053 Copyright 2011 Smith Travel Research

83 Scales related to Geography High-end hotels tend to be concentrated in specific markets of the US Luxury hotels tend to be located in larger cities and resort locations Upper Upscale hotels tend to be located in larger cities and business locations There is a higher concentration of Economy and Midscale hotels in smaller metro and rural markets Copyright 2011 Smith Travel Research

84 Top 20 US Metro Markets for Luxury Hotels (by number of rooms) MarketProperties Rooms New York, NY39 13,945 Chicago, IL16 6,654 Washington, DC-MD-VA21 6,481 Orlando, FL8 6,265 San Francisco/San Mateo, CA18 5,807 Los Angeles-Long Beach, CA20 5,749 Miami-Hialeah, FL16 4,990 Phoenix, AZ13 4,934 Atlanta, GA12 4,116 San Diego,9 3,728 Las Vegas, NV6 3,559 Boston, MA14 3,506 New Orleans, LA8 3,367 Dallas, TX9 2,763 Maui Island, HI6 2,411 Hawaii-Kauai Islands7 2,356 San Antonio, TX3 2,104 Houston, TX5 1,925 West Palm Beach-Boca Raton, FL5 1,856 Anaheim-Santa Ana, CA61,817 Copyright 2011 Smith Travel Research Top markets – NY, Chicago, DC, Orlando, San Fran, LA and Miami

85 Top 20 US Metro Markets for Upper Upscale Hotels (by number of rooms) MarketProperties Rooms Chicago, IL68 30,412 Washington, DC-MD-VA79 29,599 Los Angeles-Long Beach, CA48 20,591 New York, NY43 19,327 Atlanta, GA43 18,473 Orlando, FL32 18,367 San Francisco/San Mateo, CA45 18,131 Dallas, TX38 16,305 Boston, MA37 14,540 Houston, TX34 12,798 Anaheim-Santa Ana, CA30 12,273 San Diego, CA27 11,652 Phoenix, AZ29 10,450 Las Vegas, NV10 10,151 Oahu Island, HI9 10,065 New Orleans, LA18 8,838 Fort Lauderdale, FL23 8,655 Denver, CO21 8,586 Philadelphia, PA-NJ26 8,466 St Louis, MO-IL21 8,356 Copyright 2011 Smith Travel Research Notice differences – Atlanta, Dallas, Houston

86 The “Class” Category The Class category is similar to Scale. Chain hotels are always in the same Class group as their Scale group. There is no “Independent” Class group. Independent hotels are slotted into the Scale categories (Luxury through Economy) at similar ADR levels Class is relied upon heavily outside North America. Class is also used in North America. Class appears with Scale on US STAR Reports Copyright 2011 Smith Travel Research

87 WW Hotels by Class ClassPropertiesRooms Luxury Class4,856779,467 Upper Upscale Class10,3251,847,046 Upscale Class21,3482,769,999 Upper Midscale Class25,9392,664,167 Midscale Class28,3282,416,445 Economy Class56,2123,264,979

88 Location Category STR distinguishes hotels by their Location. Detailed definitions are available –Urban - in large metro cities –Suburban - in the suburbs of the cities above –Airport – close to a major airport –Interstate – close to a major highway –Resort – primarily leisure destination hotels –Small Metro/Town – in smaller metro areas Copyright 2011 Smith Travel Research

89 US Locations LocationOccupancyADRPropertiesRooms Urban65.7% $ ,839752,785 Suburban57.3% $ ,4271,741,776 Airport63.6% $ ,205304,318 Interstate51.5% $ ,316496,593 Resort59.5% $ ,733592,881 Small Metro/Town51.7% $ ,242899,602 Copyright 2011 Smith Travel Research Notice highest occupancies in Urban & Airport, highest ADRs in Urban & Resort

90 Extended Stay Hotels Several chains are identified as Extended Stay chains Extended Stay is not a Scale category The Extended stay chains range in scale Chains are organized into two levels, Upper and Lower, related to price level Copyright 2011 Smith Travel Research

91 US Extended Stay Chains (by level and number of rooms) ChainLevelProps Rooms Residence InnUpper597 72,075 Homewood SuitesUpper298 32,821 Staybridge SuitesUpper180 19,685 Hawthorn Suites by WyndhamUpper73 6,939 Hyatt Summerfield SuitesUpper38 5,249 Club QuartersUpper11 2,866 Hotel SierraUpper17 2,572 Chase SuitesUpper13 1,693 elementUpper9 1,432 AKAUpper9 963 Extended Stay AmericaLower366 40,535 Candlewood SuitesLower300 29,260 Value PlaceLower175 20,735 TownePlace SuitesLower198 19,880 InTown SuitesLower138 17,974 HomesteadLower131 16,728 Extended Stay DeluxeLower105 10,549 Suburban Extended Stay HotelsLower60 7,205 Studio 6Lower63 6,971 Crossland SuitesLower34 4,401 Studio PlusLower46 3,551 Mainstay SuitesLower40 3,079 Crestwood SuitesLower21 2,846 Sun Suites HotelsLower22 2,841 Savannah SuitesLower13 1,843 InnSuites HotelsLower5 882 Affordable Suites of AmericaLower Home2 Suites by HiltonLower5 527 HomegateLower3 212 Copyright 2011 Smith Travel Research

92 Boutique Hotels Hotels that appeal to guests because of their unusual amenity and room configurations, normally independent and smaller than 200 rooms with a high average rate Several chains are indentified as Boutique: –Aloft (Starwood) -- Autograph (Marriott) –Dream (Wyndham)-- Exclusive –Hotel Indigo (IHG)-- Joie De Vivre –Kimpton-- Melia Boutique (Grupo Sol Melia) –Rosewood-- W Hotel (Starwood) There are nearly 700 Boutique hotels in the US Copyright 2011 Smith Travel Research Counts and lists of Boutique hotels are available around the world

93 Additional Hotel Types STR tracks several additional types of hotels The types are not exclusive, so a single hotel can be categorized as multiple types Certain types indicate that the hotel has a feature on-site (and on the P&L), not just nearby, i.e.: Golf, Ski, Spa and Waterpark Definitions are available for other types Copyright 2011 Smith Travel Research

94 Hotel Types TypePropertiesRoomsADROccupancy All-Suites6,368706,642$ Boutique66078,712$ Casino388227,651$ Conference15237,427$ Convention863580,689$ Destination Resort306154,689$ Golf448107,706$ Ski15822,398$ Spa1,147384,671$ Waterpark13229,282$ Copyright 2011 Smith Travel Research Notice the number of properties and the ADRs

95 Hotel Ratings There are various ratings that are used for hotels (stars, diamond) There are various companies that rate (or have rated) hotels (AAA, Mobil, Michelin, TripAdvisor, other online companies, hotel associations in countries) The ratings are based on a range of criteria. They can vary and can be inconsistent. STR rarely publishes data based on these ratings. Copyright 2011 Smith Travel Research

96 Questions Briefly describe the geographic categorization methods used by the hotel industry What is the value of consistent categorization? Briefly describe the non-geographic categorization methods used by the hotel industry Compare the Scale category to the Class category Copyright 2011 Smith Travel Research

97 Hotel Industry Impact and Issues Copyright 2011 Smith Travel Research

98 Total US - Key Statistics Annual 2010 and 2011 Copyright 2011 Smith Travel Research Metric Annual 2010 Annual 2011 % Change Number of Hotels51,90052, Rooms Available (Supply)1,751,926,0281,760,720, Rooms Sold (Demand)1,008,002,8201,057,506, Room Revenue$98,849,561,085$107,527,875, Total Revenue$127,699,576,789$137,510,880, Occupancy ADR$98.06$ RevPAR$56.42$

99 Total US Top-level Performance Summary The number of rooms sold for the US Hotel Industry in 2011 was a little over 1 billion. The amount of room revenue for the US Hotel Industry in 2011 was over 100 billion dollars. This does not include ancillary revenue (additional revenue spent elsewhere in the hotel). That was approximately 30 billion dollars. Copyright 2011 Smith Travel Research

100 US Performance Records – KPI’s The highest Occupancy since 1988 (Running 12- month number) was 64.9% in June, August, September, and October of More recently, Occupancy peaked at 63.5% in May, June, and July of The highest ADR (Running 12-month number) was $ in September The highest RevPAR (Running 12-month number) was $65.99 in July Copyright 2011 Smith Travel Research

101 More US Records – Raw Values The highest Supply, Demand, and Revenue numbers since 1988 (based upon Running 12-month data) was the most recent month, May 2012: Rooms Available (Supply) 1,763,043,277 Rooms Sold (Demand) 1,070,912,262 Room Revenue$110,710,637,383 All of these records are being set now as we speak! Copyright 2011 Smith Travel Research Data as of April 2012

102 Total US Historic Performance STR regularly conducts overviews of the US Lodging Industry These overviews look at the various metrics and the percent change numbers over time The overviews also drill-down and look at performance in the various categories These overviews are also available for states and cities/markets Copyright 2011 Smith Travel Research

103 Total US - Key Performance Indicators Annual 2007, 2008, 2009, 2010, and 2011 Occupancy back to 2008 level, ADR ½ way, RevPAR ⅔ way

104 Total US - Key Performance Percent Change Indicators Annual 2008, 2009, 2010, and 2011 Big Demand & Occ turn around; ADR negative in 2010, but positive in 2011

105 This downturn and recovery was different than previous ones 2010 saw strongest Demand increase in history and sharp Supply decrease Supply: 3.0% (Sep 09) 0.6% (Dec 11) Demand: -7.0% (Aug 09) 7.8% (Feb 11) 5.0% (Dec 11) -0.9% - 4.6% Total US - Supply and Demand Percent Change Twelve Month Moving Average, Jan 1989 to Dec 2011

106 Total US - Actual Monthly Room Supply Millions of Room Nights, Seasonally Adjusted, Jan 1998 to Dec 2011 Supply has levelled off, for the first time since 2004 – good news

107 Total US - Actual Monthly Room Demand Millions of Room Nights, Seasonally Adjusted, Jan 1998 to Dec 2011 Demand at record high level for most of 2011! – also good news

108 Occupancy leveling, ADR returning, very different recovery than 2002! % % Occupancy: -9.7% (Sep 09) 6.3% (Apr 11) 4.5% (Dec 11) ADR: -8.9% (Jan 10) 3.7% (Dec 11) % 0.0 % Total US – Occupancy and ADR Percent Change Twelve Month Moving Average, Jan 1989 to Dec 2011

109 Total US - Occupancy & ADR Actual Values Twelve Month Moving Average – Jan 1997 to Dec 2011 Major challenge for the industry – making up the lost ADR!

110 ADR Discounting at Twice the Speed of ADR Recovery Total US Actual ADR, 12 Month Moving Average, Apr ’10 $97 Sept ‘08 $108 Dec ‘11 $ % -10% 19 Months

111 2000 ADR Grown By CPI Total US Actual ADRs and Inflation Adjusted ADR, 2000 – 2013F 2000 – 2010 CPI from bls.gov, 2011 – 2013 CPI from Blue Chip Economic Indicators $85 $101 $104 $85 $107$109 $107 $117 Inflation Adjusted ADRs Currently Well Out Of Reach 2007 ADR Grown By CPI

112 Questions Briefly describe the US hotel industry from the perspective of annual nights sold and revenue What do you guess is the amount of ancillary revenue in addition to room revenue and why is this significant? Compare the 2011 versus 2010 performance of the US hotel industry Compare various records set in the US hotel industry, including key performance indicators and raw values What is the current good news in the hotel industry, and what are the current challenges? Copyright 2011 Smith Travel Research

113 Benchmarking in the Hotel Industry – Intro to Competitive Sets Copyright 2011 Smith Travel Research

114 Benchmarking 101: my hotel vs. the competition

115 Benchmarking in the Hotel Industry Individual hotels compare their performance to the performance of a “competitive set” of hotels. This information is carefully tracked by the subject hotel (owner of the comp set). Individual hotels can also compare their performance to hotels in pre-defined industry segments near their hotel, i.e. the market or tract (sub-market) where they are located. Companies compare their own properties to a variety of comparative groups of hotels to gauge the performance of their portfolio. This is valuable for corporate HQs. Copyright 2011 Smith Travel Research

116 What is a “Competitive Set”? A competitive set is a group of hotels used primarily for comparison against a subject property for performance benchmarking purposes The properties that comprise a comp set are competitive in nature; competing for the same guests and sharing similar qualitative and quantitative features Copyright 2011 Smith Travel Research

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118 How are Comp Sets used? Comp sets have an impact on several functions of a hotel from the day-to-day operations to managerial and top-level decisions Comp set uses include, but are not limited to the following: –compare to the subject property for performance benchmarking purposes –Aide the sales and marketing department –Use in management contracts for performance requirements (often determines the amount of compensation managers receive) –Use for internal and external analysis (microeconomic) Copyright 2011 Smith Travel Research

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120 Why are Comp Sets needed? Historically, hoteliers have relied on each other for performance information (price, quality, quantity etc.) Hotel staff would perform “call arounds” where they would talk to staff from competitive hotels They might also count cars in parking lots or windows with lights on There is no way of assuring whether entities are being honest with each other, or whether their information is pertinent or relevant to that of the seekers Copyright 2011 Smith Travel Research

121 Why Comp Sets? - continued In the late 1980s, STR began collecting performance data from hotels and coined the term “comp set” within the hotel industry. STR essentially became a safe place for hotels to get accurate aggregate information about their set of competitors Aggregating means finding the averages based on the data from a group of hotels so that each individual hotel is protected from exploitation of their specific data No individual property data is ever disclosed to another property Copyright 2011 Smith Travel Research

122 Why Comp Sets? - continued Despite attempts throughout history to prevent anti- competitive acts, such as the Sherman Antitrust Act as long ago as 1890, anti-competition actions are still committed today within the hotel industry Perhaps the most recent case involved five La Quinta hotels in Connecticut in April 2010: –The Attorney General released a statement describing how calling around to collect current prices and occupancy rates with the intent to adjust one’s own rates is illegal and must be stopped. The Attorney General commended La Quinta for formally halting their use of “call-arounds” across all of their hotels. During the investigation, it was found that “call-arounds” are common practice among many hotels within the industry. Copyright 2011 Smith Travel Research

123 Snapshot of a Press Release Regarding Hotel Call-Arounds

124 Why Comp Sets? - continued The same statement from the Attorney General recognized that STR Reports were a legitimate means of doing business: –The agreement to cease Call-Arounds shall not (i) limit the ability of the LQ Parties … to review, consult, and participate in commercially available industry reports e.g., Smith Travel Reports …. Copyright 2011 Smith Travel Research

125 When are Comp Sets created? Competitive sets are created by the time the hotel opens. Sometimes comp sets are created long before the hotel opens while it is still under construction. The hotel can select a competitive set and can receive an “Under Construction” STAR Report. That way the new hotel staff can track the performance of the comp set prior to the opening of the hotel. Copyright 2011 Smith Travel Research

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127 Who chooses the Comp Set? There are many stakeholders when choosing a comp set: –Management company –GM –Brand Company –The sales and marketing team As you can imagine, each of these different entities have different goals when it comes to comp sets: –For example: someone might choose to include a “dog” property in the set (a property of lower quality, chain scale and/or lower ADR or Occ) in order to inflate their property’s performance metrics (RevPAR Index, ADR Index) Copyright 2011 Smith Travel Research

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129 Who chooses the Comp Set? - continued In addition, some brands have a say in choosing comp sets by setting brand standards for comp sets. These standards may involve: Including/excluding specific brands Including/excluding different properties of the same brand choosing properties within specific radial distance choosing properties within specific chain scales Copyright 2011 Smith Travel Research

130 Rules related to creating Comp Sets STR has a set of rules when it comes to creating competitive sets The first rule relates to “sufficiency”. Comp sets must include three hotels in addition to the subject Hotels are encouraged to have four or more so that if a hotel does not report for a time period for some reason, the comp set data will still appear

131 Comp Sets Rules - continued The second set of rules relate to “percentage checks” and help to ensure that the data of a single hotel, brand or company is not isolated. When percentages are calculated the rooms of the subject hotel are excluded. –No single property or brand (e.g. Holiday Inn, Comfort Inn, etc.) can account for more than 40% of the total participating room supply of a competitive set (50% outside North America) –No single company (e.g. Starwood, Choice, Interstate, Host) can account for more than 60% of the total participating room supply of a competitive set

132 When are Comp Sets changed? Comp sets may need to be changed due to: –Changes in the subject hotel, i.e.: renovation, conversion, new mgtco or owner, contract changes –Changes in the market, i.e.: new competitive hotels open –Strategic changes, i.e.: repositioning, improving comp set strength Some companies make changes at specific times of the year Copyright 2011 Smith Travel Research

133 Rules related to changing Comp Sets STR has rules related to changes that address “isolation” issues. If a property wishes to change their comp set, they must do so by a net change of two properties. They can add two hotels, remove two (as long as they don’t go below three remaining hotels) or they could add one and remove one. The two properties must be in a different chain, parent company and management company from the subject hotel. Copyright 2011 Smith Travel Research

134 Changing Comp Sets Rules continued These rules ensure that a single property’s data is never isolated. The exceptions to the “rule of two” is that a hotel can add a brand new property which has been open less than six months Or a hotel can remove a property from its comp set that has stopped participating after three months. Copyright 2011 Smith Travel Research

135 Additional Comp Sets There are many cases where hotels have more than one comp set. Multiple comp sets can serve different benchmarking purposes. Hotels with multiple comp sets could have various key competitive features and/or unique qualities. When a hotel changes its comp set, they may elect to keep the old on for a period of time to provide perspective. A second comp set must differ from the primary comp set by at least two properties. The same rules apply as for changes. Copyright 2011 Smith Travel Research

136 Reasons for Additional Comp Sets There are a wide variety of reasons for additional comp sets: –Local versus Regional – one set nearby and another farther away –Subject hotel is between two markets or cities –Aspirational – second set for hotels of higher quality or performance level –Different sets focusing on different brands –Different set for special niche (conference, water park, boutique) –Index-focused (aiming to achieve a specific index) –Different sets for Weekday/Weekend or Group/Transient mix –Different entities may not agree – brand versus management company –An old comp set is linked to a prior contract –Hotel wants to be compared to a different industry segment

137 Benchmarking at the Corporate Level Companies benchmark the performance of their portfolio in a variety of manners Companies may compare their own hotels to all of their competitive sets They may compare the performance of a brand to the respective scale, i.e. all of the other similar brands in the same scale They may also create a “corporate comp set” and compare their brand to a user-defined group of brands that they feel they compete most closely with Copyright 2011 Smith Travel Research

138 Questions Briefly define benchmarking as it relates to the hotel industry Explain how hotels perform benchmarking Identify the rules related to creating a comp set Identify the rules related to changing a comp set Why do hotels have multiple comp sets? Briefly describe how companies perform benchmarking Copyright 2011 Smith Travel Research

139 Questions? Steve Hood , extension 3315


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