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Industry Landscape IHIF 2014

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Information about Industry Landscape IHIF 2014
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Published on March 4, 2014

Author: STR_Global

Source: slideshare.net

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The Industry Landscape Global Trends Elizabeth Winkle Managing Director, STR Global IHIF Berlin 3 March 2014 www.strglobal.com

• Global Overview • Top Trends to Watch for Europe • Outlook

RevPAR growth in most regions YE 2013, % change USD, Europe (€) + 5.3% + 1.7% € + 4.7% - 4.1%

Demand growth outpaced supply growth % change YE 2013 10% Supply Demand 8% 6% 4% 2% 0% -2% North America Central- South America Europe Middle East Africa Asia Australia & Oceania

Back to Peak? Revenue generator index on YE 2008 1.2 1.1 1 0.9 0.8 0.7 2007 2008 2009 Europe € 2010 2011 USA $ 2012 2013

Europe Demand Accelerating? 12 MMA % change 8% USA 6% 4% 2% 0% -2% -4% -6% Jan 10 Jan 11 Jan 12 Jan 13 Europe

Demand, demand and more demand www.strglobal.com

Demand growth for 46/49 months; since Dec ‘09 Monthly Demand % change 10 5 0 -5 -10 -15 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13

Limited Supply Growth; Strong Demand Growth 12 MMA Nov ‘10 +6.8% 8% 6% 4% 2% 0% -2% -4% -6% Supply % Chg Demand % Chg Dec ‘13 +3.3% 2010 2011 2012 2013

Similar Supply/Demand Trends by Class YE 2013 Supply % Chg 6% 5% 4% 3% 2% 1% 0% Demand % Chg Luxury Upper Upscale Upscale Upper Midscale Economy Midscale

Rate: the only way is Up? www.strglobal.com

Incongruence between Demand and ADR performance 12MMA Jan ‘11 5.4% 6% May ‘11 5.8% Dec ‘13 2.4% 3% 0% Dec ‘13 -1.0% -3% -6% Occ % Chg -9% -12% 2010 2011 2012 2013 ADR % Chg

Negative ADR limiting RevPAR 12MMA May ‘11 10.9% 12% 8% Dec ‘13 1.7% 4% 0% -4% -8% -12% -16% 2010 2011 2012 RevPAR % Chg 2013

Occ growth; ADR declines across all classes Actual Occ & ADR & YOY % change Occupancy 72% ADR 270 € 0.0% +4.1% 70% 220 € 68% +2.4% 66% 170 € +1.5% +2.5% 120 € 64% +2.0% +2.2% -1.5% 70 € -0.4% 62% -1.6% -0.4% -1.9% 60% 20 € Luxury Upper Upscale Upscale Occ 13 Upper Midscale ADR 13 Midscale Economy

Southern Europe Signs of Recovery YE 2013 Northern Europe Occ 73% +3.4% ADR € 96 -3.5% RevPAR € 70 -0.2% Western Europe Eastern Europe Occ 67% +1.1% Occ 61% +3.0% ADR € 108 +0.3% ADR € 85 -4.0% €72 +1.4% RevPAR € 52 -1.0% RevPAR Southern Europe Occ 64% +2.2% ADR € 104 +2.2% RevPAR € 66 +4.4%

Predominantly domestic demand Source: Quartz.com, European Commission

Limited Pipeline www.strglobal.com

Pipeline growth consistent with LTA +143k rooms +3% 2014-2016 6% 21% 15% Luxury Upper Upscale Upscale 11% Upper Midscale Midscale Economy Unaffiliated 23% 6% 18%

UK, Russia, Germany have largest pipelines Top 10 by rooms 11% 10% 21% 4% 4% 12% 38% 4% 3% 3% 2%

Outlook www.strglobal.com

Demand & GDP in step, GDP forecast more positive (GDP Source: Oxford Economics) 10% 5% 0% -5% -10% -15% 2004 2005 2006 2007 2008 2009 Demand 2010 2011 GDP 2012 2013 2014f 2015f

2013 Actual Markets telling an Occupancy Story

2014 Forecast: Time for rate growth Feb 2014 edition – local currency

Summary • Demand: Remains strong – increasing international arrivals; EU economic improvements • ADR: No real rate recovery, opportunities exist • Supply: Limited growth in most markets • Forecast: ADR growth across most markets

Elizabeth Winkle STR Global +44 (0)207 922 1930 info@strglobal.com www.strglobal.com You can follow us on Twitter, Facebook, LinkedIn STR Global, Ltd is the exclusive owner of all rights in this presentation and its content. Reproduction of all or a portion of this presentation for any purpose without prior approval of STR Global is strictly prohibited. This presentation is based on information compiled by STR Global Ltd. No strategic or marketing recommendations or advice are intended or implied.

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