Slide 1: Hotel performance: holding onto gains, facing off economic pains?
Hotel performance: holding onto gains, facing off economic pains? All information is provided “as is” and only as of the date referenced and may change. While the information is believed to be accurate, neither CoStar Group nor STR guarantees that it is free from error, omission or misstatement. CoS
Slide 2: Some very important points to start with
Some very important points to start with Source: STR / 2020 © CoStar Realty Information, Inc..
Slide 3: In 2020, we forecast European RevPAR would recover by 2022
In 2020, we forecast European RevPAR would recover by 2022… March 2020 Forecast Source: STR. © 2023 CoStar Group
Slide 4: … and it did! (although the dip was way more than expected)
… and it did! (although the dip was way more than expected) 1.1 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2019 2020 2021 2022 Nov 22 Forecast Apr 20 Forecast Source: STR. © 2023 CoStar Group
Slide 5: So what next….
So what next…. COVID is behind us Recession risks Leisure pent-up is spent-up Business has bounced back Source: STR. © 2023 CoStar Group
Slide 6: 1. Occupancy & Rates
© 1. Occupancy & Rates
Slide 7: Global demand ended the year 8% below 2019
100 10 20 30 40 50 60 70 80 90 0 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 *Includes December 2022 prelim data Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Global demand indexed to 2019, comparable reporting hotels Oct-21 Nov-21 Global demand ended the y
Slide 8: One of the biggest missing pieces of the puzzle is coming back
One of the biggest missing pieces of the puzzle is coming back China outbound overnights, 2000 – 2025F 400 350 300 250 Miljontal 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: STR. © 2023 CoSt
Slide 9: 2023 European occupancy is approx. 5% behind 2019
2023 European occupancy is approx. 5% behind 2019 Europe Weekly Occ R7, December 2022 – January 2023, vs 2019 2022 - 2023 actuals 2019 actuals 80% 70% 60% 50% 40% 30% 20% 10% 0% 2022-12-03 2022-12-10 2022-12-17 2022-12-24 2022-12-31 2023-01-07 2023-01-14 2023-01-21 2023-01-28 2023-02-04 Source: STR.
Slide 10: Italy, Ireland, France, Italy, UK & Portugal 100% recovered
Italy, Ireland, France, Italy, UK & Portugal 100% recovered Occupancy R28 (Std) indexed to 2019, December 2022 to January 2023 120 115 110 105 100 95 90 85 80 75 70 01-dec 08-dec 15-dec 22-dec 29-dec 05-jan 12-jan 19-jan 26-jan Source: STR. © 2023 CoStar Group 10
Slide 11: In Germany Munich, Cologne and Stuttgart struggling the most
In Germany Munich, Cologne and Stuttgart struggling the most Occ R28 (Std) indexed to 2019, December 2022 to January 2023 110 100 90 80 70 60 50 40 01-dec 08-dec 15-dec 22-dec 29-dec 05-jan 12-jan 19-jan 26-jan Source: STR. © 2023 CoStar Group 11
Slide 12: Europe ADR holding at recovery in real terms
Europe ADR holding at recovery in real terms EU 27 Countries, Weekly ADR (Euros) indexed to 2019, Jan 2022 – Jan 2023 140 Real ADR Index Nominal ADR Index 130 120 110 100 90 80 Source: STR. © 2023 CoStar Group 12
Slide 13: Ireland, Portugal, and Italy with ADR 25% > 2019, Germany slipping
Ireland, Portugal, and Italy with ADR 25% > 2019, Germany slipping ADR R28 (Local Currency) indexed to 2019, December 2022 to January 2023 160 150 140 130 120 110 100 90 80 01-dec 08-dec 15-dec 22-dec 29-dec 05-jan 12-jan 19-jan 26-jan Source: STR. © 2023 CoStar Group 13
Slide 14: ADR change differs significantly across Germany
ADR change differs significantly across Germany ADR R28 (Local Currency) indexed to 2019, December 2022 to January 2023 140 130 120 110 100 90 80 70 01-dec 08-dec 15-dec 22-dec 29-dec 05-jan 12-jan 19-jan 26-jan Source: STR. © 2023 CoStar Group 14
Slide 15: 2. Business & Group travel
© 2. Business & Group travel
Slide 16: Business travel is back and will be a more important driver in 2023
Business travel is back and will be a more important driver in 2023 Europe, occupancy % change to 2019, weeks ending 3 Dec 2022 – 28 Jan 2023 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% 3 Dec 28 Jan 3 Dec 28 Jan Weekday Weekend Source: STR. © 2023 CoStar Group 16
Slide 17: Business travel recovery is expected to continue in 2023 and beyond
Business travel recovery is expected to continue in 2023 and beyond Source: STR. © 2023 CoStar Group 17
Slide 18: The main thing holding back recovery is still group demand
The main thing holding back recovery is still group demand Europe, segmentation Demand % change to 2019, weeks ending 3 Dec – 28 Jan 2023 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% -60% -70% 3 Dec 28 Jan 3 Dec 28 Jan Group Demand Transient Demand Source: STR. © 2023 CoStar Group 18
Slide 19: UK regional fully recovered, expect London to catch-up
UK regional fully recovered, expect London to catch-up R28 occ, % change to 2019, 2022-2023 London RegionalUK 20% 10% 0% -10% -20% -30% -40% -50% -60% 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan Source: STR. © 2023 CoStar Group 19
Slide 20: … as evidenced by business on the books
… as evidenced by business on the books London Occ on books + typical 90 days pick-up, 13th Feb 2023 – 24th April 2023 2022 Occ. on the books 90 days 90 day trending pickup 2019 Rooms occ R90 2022 occ + trending 90% 82% 82% 81% 78% 77% 80% 73% 72% 70% 70% 68% 67% 68% 60% 50% 40% 30% 20% 10% 0% 2023-
Slide 21: … and gateway cities now with ADR premium over regional markets
… and gateway cities now with ADR premium over regional markets R28 ADR (GBP), % change to 2019, 2022 – 2023 London Regional UK 50% 40% 30% 20% 10% 0% -10% -20% -30% 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan Source: STR. © 2023 CoStar Group 21
Slide 22: 3. Summary
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Slide 23: Conclusions
Conclusions Area Takeaway 1. Hotel demand Globally, very close to fully recovered 2. Room rates Recovered in real terms, growth in 23 harder 3. Business travel Back and with potential for further recovery 4. Leisure Loosing last years lustre 5. Outlook Industry is resilient to recession risks to dat