1. The Lodging Conference 2017
Adam Lair, MAI
Managing Director and Senior Partner
| +1 (415)

2. U.S. Hotel Transaction Volume ($2.5M+) *2%
Transaction Volume in Billions
Average Price per Key
24%
30% 1%
Source: Real Capital Analytics (RCA) * Preliminary Data

3. U.S. Hotel Transaction Volume ($2.5 - $10M) *2%
Transaction Volume in Billions
Average Price per Key
26% 8% 7%
Source: Real Capital Analytics (RCA) * Preliminary Data

4. U.S. Hotel Transaction Volume ($10M+) *4%
Transaction Volume in Billions
Average Price per Key
24%
35% 2%
Source: Real Capital Analytics (RCA) * Preliminary Data

5. Trends in Transaction Price Per Room
Year
Hotels Sold
% Change
Average Price Per Room
2017 YTD Q3
418 8% $
213,684
-4%
2016 YTD Q3
386
223,572
2016
541
-29%
219,633
-11%
2015
761 1%
246,080
18%
2014
757
54%
208,500 6%
2013
490
29%
196,789 5%
2012
379
-16%
188,050
-3%
2011
451
86%
193,170
2010
242
203%
178,723
28%
2009 80
-71%
140,172
-21%
2008
278
-63%
177,535 2%
2007
747 4%
173,698
-9%
2006
715
16%
191,863
20%
2005
614
159,758
Year
Hotels Sold
% Change
Average Price Per Room
2017 YTD Q3
810 3% $
54,841 2%
2016 YTD Q3
783 0%
53,697
2016
1,203
-6%
55,113 5%
2015
1,285
25%
52,491 6%
2014
1,025 8%
49,553 7%
2013
953
31%
46,228 4%
2012
727
34%
44,375
2011
544
65%
42,005
2010
330
29%
40,738
-2%
2009
256
-59%
41,580
-21%
2008
626
-34%
52,375
2007
945
-11%
51,283 1%
2006
1,063
12%
50,751
2005
947
50,713
Source: Real Capital Analytics (RCA) * Preliminary Data

6. Historical Hotel Buyer Makeup
33%
Source: Real Capital Analytics (RCA)

7. Historical Cross-Border Capital Flows
Source: Real Capital Analytics (RCA)

8. Historical REIT Capital Flows
Source: Real Capital Analytics (RCA)

9. Historical Hotel Lender Makeup
Source: Real Capital Analytics (RCA)

10. 2017 Q3 Sales by Price per Room ($10M+)
33%
44%
26% 3%
40% 8%
Source: Real Capital Analytics (RCA)

11. Top 20 Active Markets by Volume 2017 Q3
Source: Real Capital Analytics (RCA)

12. Cap Rates Extracted from Sales Increasing
Source: HVS & RCA

13. Past the Peak, But Stable Values Through 2019
Significant Value Decline
Less than -10%
Moderate Value Decline
Between -3% and -10%
Stable Values Between -3% and +3%
Moderate Value Increase Between +3% and +10%
Significant Value Increase Greater than +10%
Source: HVS Hotel Valuation Index

14. Top 10 RevPAR Markets Through 20196
Las Vegas
Orlando 2 7
New Orleans
Anaheim 3 8
San Diego
Philadelphia 4 9
Norfolk/VA Beach
Cleveland 5 10
Oahu
Charleston
Source: HVS

15. Bottom 10 RevPAR Markets Through 201930 35
Los Angeles
San Antonio 31 36
Seattle
Chicago 32 37
Miami
Portland 33 38
Columbus
Denver 34 39
New York
Nashville
Source: HVS/STR Hotel Valuation Index

16. Most & Least RevPAR Growth Through 20197%
Source: HVS

17. Key Takeaways
Slow transactions among higher priced assets should offset minimal growth otherwise, resulting in stable transaction volume for 2018 and beyond.
Primary, gateway markets will continue to be attract investors, and cap rates should remain relatively stable for those well-positioned assets that do trade.
Interest rate increases, uncertainty about the economic cycle, and more conservative underwriting should continue to push overall cap rates higher in 2018.
Supply remains the primary concern in most markets. Markets that have been sheltered from supply throughout the cycle will attract the most investor interest in 2018 before peaking.
Near-term growth will be modest and slowing for most markets. Growth will be driven by ADR increases as supply suppresses occupancy.
Values should remain stable in 2018.
Source: HVS

18. Managing Director & Senior Partner
Adam R. Lair, MAI
Managing Director & Senior Partner
| +1 (504)
@HVS_Consulting