1. The Global Hotel Industry - an STR Perspective
The SHARE Center
Supporting Hotel-related Academic Research and Education

2. Agenda Quick Intro to STR and STR Global
WW Foundations and Categorizations
Global Companies
WW Processes and Reports
Examples of Global Research

3. A Quick Introduction to STR and STR Global

4. Who is Smith Travel Research?
The recognized leader in hotel benchmarking
Sample over 75% of total U.S. room supply (99% of chain hotels) and nearly 50% of total global room supply
Provide monthly, weekly, and daily STAR reports to over 43,000 hotels
Founded in 1985
Impartial, timely, confidential, and accurate

5. Benchmarking 101: my hotel vs. the competition

6. Who does STR serve? Hotel companies and Hotels (most GM’s bonuses)
Convention & Visitor Bureaus, Tourism and travel organizations, Hotel associations (endorsed by AHLA)
Developers, Consultants, Appraisers (most bank loans)
Wall Street/Accounting firms, Financial institutions
Media (Wall St Journal, USA Today, …)
National & international hotel conferences (keynotes)
Hotel vendors (HBO, Sealy, Starbucks, …)
Educators
Government (GSA, FEMA, BLS, DOE/HS, NPS, Commerce, …)

7. A Brief History of STR
1985 – founded, started collecting hotel attribute info
1987 – started collecting monthly sales data
1992 – started collecting data outside US, NA then WW
1999 – started collecting daily data
2008 – launched STR Global
2008 – launched Hotel News Now
2009 – started STR Analytics, working with RRC
2009 – started HDC/Hotel Data Conference
2011 – launched the SHARE Center and HDC Europe

8. Hotel News Now Free electronic news service (www.hotelnewsnow.com )
Focus on data, performance, and industry issues
Search capability for past articles
Coverage of industry conferences
Global emphasis also

9. STR Global - Background
WW Benchmarking – originally 3 players
Creation of STR Global – interest of major companies
Recently celebrated 3-year anniversary!
Offices and people on the ground
London, UK (30); Singapore (5); Beijing, China (2)
Also Italy, Dubai, Japan, Australia, Brazil, Indonesia, India
Challenges getting started

10. What data does STR track?
Hotel census data
Attributes, geo. & non-geo. categorization, affiliations, & history
US: 51K hotels WW: additional 90K hotels
Rooms sales data
Monthly & daily rooms available, rooms sold, & revenue
US: 29K hotels WW: 14K hotels
Segmented (Group/Transient) data US: 4K hotels (95% of Lux & Upper Up) WW: 1K hotels
HOST data
Annual Profit & Loss info; revenue, expenses, costs
US: 6.5K hotels WW: 2K hotels
Pipeline data
Hotels under construction and projects in planning
US: 4K projects WW: 4K projects

11. Lesser participation in Africa and parts of S. America and Mideast
WW STAR Participation
Lesser participation in Africa and parts of S. America and Mideast

12. WW Foundations and Categorizations

13. Terminology Differences
“Lodging” – Lodging Review  Hotel Review
“Tract”  “Sub-market”
“CVB” – CVB Reports  Destination Reports
“Benchmarking”  “Market Share”
Index definitions
“Occupancy Index”  MPI (Market Penetration Index)
“ADR Index”  ARI (Average Rate Index)
“RevPAR Index”  RGI (Revenue Generation Index)
“Worldwide”  “Global”
“Conference” hotel  “Congress” hotel

14. WW Geographic Categorization
Continents
Americas, Europe, Asia/Pacific, Mid East/Africa
Sub-continents
Americas: North America, Central America, South America, Caribbean
Countries – based upon WTO definitions, irregularities
Regions – 9 in US, 4 in Canada (5 in UK, 4 in Germany)
Markets – major cities, also non-metro areas, or country
Sub-markets – subsets of markets, in US called tracts
Other areas or groups of countries: Eurozone, UK Regional, Gulf Coop. Council, BRIC, Benelux, Nordic, Scandinavia, …

15. Census & Sample by Sub-Continent
4 continents with 3 to 4 sub-continents each, 52.5K hotels in US
Census=in the STR database, Sample=they submit performance data

16. Census/Sample by Top Countries
Sorted by Census Rooms, Countries with 100K+ rooms

17. Census/Sample by Top Non-US Markets
Sorted by Census Rooms, only metro markets

18. WW Non-geographic Categorization
Scale versus Class
Scale defined:
Scales include just chain hotels
Chains are placed in Scale based on average ADR of all hotels globally
Separate Scale category for Independents
Chains are in the same scale for whole world
North America reports use Scale

19. WW Non-geographic Categorization
Class defined:
Needed since there are so many more independent hotels
Chain hotels in same group as in scale (no difference). Why? Sometimes this presents problems (i.e.: Holiday Inn).
Includes independent hotels based on ADR of independent relative to ADR of similar chain hotels on country by country basis, recalibrated once a year
Same names as for Scale
WW reports use Class

20. Additional WW Non-geo. Categorization
Star Rating
Different systems in different countries
Location
Price
Types and Features: Boutique, Golf, Spa, Resort, Ski, Conference/Congress, Casino, Extended Stay, …
User-defined based on needs of companies

21. Currency Issues Daily Data Monthly Data
Exchange rates obtained from Oanda.com
Monthly Data
Use exchange rate on last day of month
Multiple Time Periods (YTD, running-12, week)
Uses different exchange rate of each time period included
Fluctuation (can be significant) and change (new/switch)
Constant Currency
Many companies request this data for aggregating numbers across countries
Current and prior year data is based on January conversion rate

22. Time-Related Issues Weekday/Weekend YTD/Fiscal Year Holidays
Other than typical Friday and Saturday night, UAE is Thu to Fri
YTD/Fiscal Year
Other than January to December, India is April to March
Holidays
Many more
Time Zones
Country like China has 6
Reports/data, processing, and support are needed around the globe on a timely basis

23. Global Companies

24. Major Parent Companies in the World
Sorted by Census Rooms, all are US companies except for Accor

25. Top WW Hotel Companies/Chains
Sorted by Census Rooms

26. Additional WW Hotel Companies/Chains
Sorted by Census Rooms

27. Chain Hotels versus Independents 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

28. More Independents - Ramifications
Some countries have very few Chain hotels
Italy has < 5% Brand hotels
And largest Brand has no more than 25 hotels
There can be much more owner involvement
More chance to be family business
Could be multi-generation business
Hotel is extension of who the owner is, very personal
Very proud of hospitality
More passionate, feeling of calling/destiny
More detail oriented, very concerned about the numbers
Many hotels started as guest houses/bed & breakfasts

29. Other US vs. Non-US Differences
Disparity of operating practices
Different countries, hotels want to be different, buck the system
Holiday is a right, an entitlement, longer times and more often
Systems can be less sophisticated
Confidentiality issues
Countries in EU requires one more hotel in comp set
Many countries openly share data

30. CVB Related Issues
STR frequently works with country or regional hotel associations or tourism boards, including:
Australia -- Vienna -- Brussels
Calgary -- Ontario -- Toronto
Caribbean -- Denmark -- Germany
Hungary -- Bali -- Ireland
Italy -- Kuwait -- Netherlands
Bonaire -- Auckland -- Puerto Rico
Stockholm -- Trinidad -- England
Scotland -- Latin America -- Virgin Islands
These organizations help to identify hotels and also help with categorizations such as STAR Ratings
They also receive and STR Destination Reports

31. Global Industry Conferences
There are hotel and tourism conferences around the world where STR frequently presents data, including:
International Tourism Fair & Hotel Investment Forum in Berlin
STR Hotel Data Conf. Europe & Hotel Investment Conf. Europe
Russia & CIS Hotel Investment Conference
Arabian Hotel Investment Conference in Dubai
Hotel Investment Conf. Asia Pac. (Hong Kong, Japan, Singapore)
Hotel Investment Forum India
Caribbean Tourism Conf. & Carib. Hotel & Resort Investment Conf.
Central/Latin America Hotel Investment Conference
Canada Hotel Investment Conference
These conferences are tracked by HNN

32. Expansion Scenarios US companies expanding outside the US
All major companies:
Starwood
Marriott
Interstate/Jin Jiang
Hot locations:
BRIC
Non-US companies expanding in the US
Companies:
Taj
Jumeirah
Yotel
Gateway locations
Non-US companies expanding outside the US

33. Global Processes and Reporting

34. Hotel Census Database Differences
Hotel definitions more varied (castles, hostels, palaces, guest houses, pub accommodations, pension (midscale B&B), manor/country house)
Language differences when it comes to name and address data
Geographic differences such as state and zip/postal code
Format differences when it comes to fields like phone number and zip code
Hotel name vs. legal entity
Rooms and beds – single, double, twin

35. Competitive Set Differences
Same basic confidentiality-related rules apply, slight differences in some areas
In some places, comp sets can be harder to fill
Reports also compare subject hotel to industry segments
Most common is Market Class or Market Collapsed Class
Collapsed Class using the following groupings:
Luxury & Upper Upscale
Upscale & Upper Midscale
Midscale & Economy

36. Data Loading and Checking Differences
Data coming from more small companies and independents
Data entry via web site
More corporate formats and flexibility
Data arriving in variety of currencies, operating currency can be different than local currency
Many more special events, also recurring events in different countries (Air show-Paris vs. London)
Also political (war, bombing) and weather-related events
Even more error checking

37. Customer Service and Sales Differences
24-hour support required
Language and cultural differences
In US much of support is handled through corporate office, person at hotel calls HQ for questions
More emphasis on web, i.e. changing comp sets, accessing data, multi-lingual web site
Willingness to share data, more suspicion, less well known
Some areas of the world more technologically advanced and have higher expectations

38. Global Methodology Issues
Participation more varied
Year-over-year participation differences – more care required to ensure consistency
Some areas may not have any hotels in Scale/Class group
No modeled data
STR models data only in the US, estimating non-participants based on participants
Will expand to other countries as participation allows
Hotels close for holidays, just a week or two
Different than US seasonal close

39. STAR Reports Similar
Hotels outside North America receive daily reports by early afternoon in addition to Weekly and Monthly reports
Hotels outside US and Canada do not receive a Monthly Summary Page
Hotels outside US and Canada receive a Monthly and Weekly tab identical to the Comp Set page which compares them to a Class segment
Hotels can select their currency
Many hotels have multiple comp sets

40. Daily STAR Property Report – Table of Contents
Available in 19 NA markets and most all non-NA markets

41. Daily STAR Property Report – Running Month-to-Date
Daily data delivered the next day

42. Monthly STAR Report – Summary page for NA hotels
Subject property is compared to the comp set and to various industry segments (market, tract, scale, class)

43. Industry pages similar to Comp Set pages for non-NA hotels
Subject property versus comp set over a longer period of time

44. Additional Reports and Data Files are Similar to the US
Corporate Reports and Data Files
Also available in Constant Currency
Destination Reports
With various WW Industry Segments, many span countries & US
Publications
Global Hotel Review, Country Reports, Pipeline Reports
Ad-Hoc Reports
Trends, Pipeline, P&L, Forecasts , Census Database, Ad-hoc Industry Data Files – select currency

45. Global Destination Report - sample.
Month & YTD data for various industry segments

46. Global Hotel Reviews & Country Reports
Monthly Reviews displaying performance of countries and major markets for 4 continents:
Americas -- Asia/Pacific
Europe -- Mid East/Africa
Monthly Country Reports displaying smaller cities and class breakdowns available for countries or areas:
Canada -- UK (weekly) -- Central/Eastern Europe
Germany -- Italy Iberian Peninsula
Nordics -- Benelux -- Australia/New Zealand
China -- India Gulf Cooperative Council
Southeast Asia -- South Africa

47. Global Hotel Review for Americas – Table of Contents

48. Americas Hotel Review – Global Performance
Overview of Month & YTD data for continents, subcontinents, and major markets/cities

49. Americas Hotel Review – Countries page
Month & YTD data for all countries in a continent
Page in US Dollars, page in Local Currency, page in Euro
Local Currency page displays ISO code and exchange rate

50. WW Hotel Pipeline Outlook for Asia/Pac

51. Examples of Global Research

52. The industry often behaves similarly – 2009 down, 2010 up
Global Occupancy Percent Change
Annual 2008, 2009, & 2010
North America
-4.6% % %
Europe
-4.3% % %
Central America
-3.0% % %
Asia Pacific
-7.8% % %
Caribbean
-4.5% % %
Source: Global performance review – inconsistent sample
UK – (£)
US, MEA, ASIA Pacific – ($)
Europe (€)
Inconsistent sample
South America
1.4% % %
MidEast & Africa
0.6% % %
2010 Smith Travel Research, Inc.
The industry often behaves similarly – 2009 down, 2010 up 52

53. Demand is back ... YTD Nov 2010, YOY % change, supply, demand, RevPAR
Central & South America $
Asia Pacific $
North America $
Middle East & Africa $
Europe €
Jan to Nov 2010 % change of supply, demand and revPAR
All in USD, Europe in Euros (therefore blue)
All with positive revPAR %chg
Just the ME: 9.2% supply, 8.6% demand but -5.8 % revPAR
SUPPLY

54. Good news - Q4 stable RevPAR % change YOY USD – boxes YTD NA MEA $59
$96
RevPAR % change YOY USD – boxes YTD
Europe
$85/€64 AP
$87
Samples from Jan 08 to Nov10
In USD
Europe shown in Euros
YOY % change (NOT seasonal)
Declines started before Sept 08, LB crash accelerated it but did not start it (similar like 2001 case); bounces due to weak Q4, 2008 and Q1, 2009; but good to see bounce happening and now in Q4, 10 stablising
Boxes: YTD results Jan to Nov 2010

55. Luxury Supply % Change: South America is Hot!
* LUX Supply Change ,12 MMA Jan’ 08– Mar ‘11

56. Luxury ADR % Change: Better, But Not As Great as ‘08
* LUX ADR Change ,12 MMA Jan’ 08– Mar ‘11

57. Surprising ADR pick up European rolling-12 % change demand and ADR €
Rolling-12 ADR % chg and demand % chg
Europe
Jan 01 to Nov 2010

58. At least pointing into the right direction
Middle East, rolling-12 % change demand and ADR $
Rolling-12 ADR % chg and demand % chg
Middle East only
Jan 01 to Nov 2010

59. Asia Pacific Rolling-12 RevPAR, Occ, ADR % growth. 2004 to Mar. 2011
$ 94
-5 %
-24%
$89.2
Jan ‘08
Rolling-12 revPAR
Europe in Euros, rest in USD

60. Asia Pacific Rolling-12 Occ & ADR. 2004 - YTD 2011 Rolling-12 revPAR
Europe in Euros, rest in USD

61. Total United States and Europe ADR Percent Change Twelve Month Moving Average – 1998 to January 2010
2008 Smith Travel Research, Inc.

62. Total United States and Europe Room Supply Percent Change Twelve Month Moving Average – 1998 to January 2010
2008 Smith Travel Research, Inc.

63. Total United States and Europe Room Demand Percent Change Twelve Month Moving Average – 1998 to September 2009
2008 Smith Travel Research, Inc.

64. Total United States and Europe Occupancy Percent Change Twelve Month Moving Average – 1998 to January 2010
2008 Smith Travel Research, Inc.

65. Americas – Occupancy Percent Change Twelve Month Moving Average – Jan 1999 to Jan 2010
Caribbean (May, -7.9)
North America (August, -9.6)
Central America (November, )
2010 Smith Travel Research, Inc.

66. Americas – ADR Percent Change ($USD) Twelve Month Moving Average – Jan 1999 to Jan 2010
Caribbean (September, )
Central America (December, -5.6)
North America (January, -9.1)
2010 Smith Travel Research, Inc.

67. Europe – Eurozone vs non-Eurozone Demand Percent Change – 12 Month Moving Average Jan 2008 – Jan 2010

68. Europe – Eurozone vs non-Eurozone ADR (€) Jan 2008 – Jan 2010
11/08

69. Europe – Eurozone vs non-Eurozone Occupancy Jan 2008 – Jan 2010

70. Central America by Class – Occupancy % Change Annual 2008, Annual 2009, and February 2010 YTD
2010 Smith Travel Research, Inc.

71. Central America by Class – ADR % Chg ($USD) Annual 2008, Annual 2009, and February 2010 YTD
2010 Smith Travel Research, Inc.

72. Occupancy - Luxury / Upper Upscale
Full Year 2010 / YTD March 2011
> 85%
< 50%
Year to date, August Aug 08
Selected Asian Markets
Left vertical axis: Occupancy
Right vertical axis: average room rate in USD
Following on from the %changes on prior slide: Whilst Taba and Alexandria showed high increases in ADR – they are coming from a low base achieving ($39 in Taba and $102 in Alexandria)
ADR differences in Egyptian cities due to type of destination (Taba, Sharm: holiday / Cairo, Alexandria: business orientated)
Dubai achieved $305 and 84% (highest ADR and Occ within the selected city sample)
Occupancy:
Most cities report between 70% and 80% occupancy apart from Nairobi which suffered due to the political turmoil following the elections in Dec 2007
ADR: different picture
Clear difference between cities on the Arabian Peninsula (Dubai, Muscat, Riyadh) and cities on the African continent

73. Average Rate - Luxury / Upper Upscale
Full Year 2010 / YTD March (USD)
>$280
<$125
Year to date, August Aug 08
Selected Asian Markets
Left vertical axis: Occupancy
Right vertical axis: average room rate in USD
Following on from the %changes on prior slide: Whilst Taba and Alexandria showed high increases in ADR – they are coming from a low base achieving ($39 in Taba and $102 in Alexandria)
ADR differences in Egyptian cities due to type of destination (Taba, Sharm: holiday / Cairo, Alexandria: business orientated)
Dubai achieved $305 and 84% (highest ADR and Occ within the selected city sample)
Occupancy:
Most cities report between 70% and 80% occupancy apart from Nairobi which suffered due to the political turmoil following the elections in Dec 2007
ADR: different picture
Clear difference between cities on the Arabian Peninsula (Dubai, Muscat, Riyadh) and cities on the African continent

74. Luxury Occupancy: Selling 7 of 10 Rms (Except in Beijing) …
* Select Luxury Class Markets, OCC %, Q1 ’09 -’11

75. ADR ($/£) : Room Rate Recovery (…sort of…)
* Select Luxury Class Markets, ADR, Q1 ’09 -’11

76. Comparative Countries - Occupancy % Chg December 2009 YTD
2010 Smith Travel Research, Inc.

77. Comparative Countries - ADR % Change ($USD) December 2009 YTD
2010 Smith Travel Research, Inc.

78. China’s Luxury Hotel Industry
Beijing
China’s Luxury Hotel Industry
- A First Look -
Chengdu
Shanghai
Shenzhen HK
Sanya

79. Supply & Demand % Change: Unbelievable Growth
*World Expo 2010
* Supply & Demand % Change, Luxury Class By Market, YTD June ’10
2010 STR Global Limited

80. Occupancy Growth Off The Charts. ADR Growth Muted.
*World Expo 2010
* OCC & ADR (CYN) % Change, Luxury Class By Market, YTD June ’10
2010 STR Global Limited

81. Occupancy Change: Major European Markets Recover Well
OCC % Change, Major Markets, Full Year 2008, 2009, August YTD 2010

82. ADR Change: Major European Markets Recover Well
ADR % Change, Major Markets, Full Year 2008, 2009, August YTD 2010

83. Supply in Olympic Cities
Census % change YOY
YOY % change supply
Olympic Year –1
Olympic Year
Olympic Year +2
ANIMATION
London supply: current supply plus current-expected pipeline (as of Dec 2010) to Dec 2012
Feb 2012: 29 days!

84. Demand in Olympic Cities
Occupied rooms % change YOY
YOY % change demand
Olympic Year –1
Olympic Year
Olympic Year +2
ANIMATION
Atlanta 1996
Sydney 2000
Athens 2004
Beijing 2008

85. RevPAR achieved in Olympic YR
RevPAR USD
Olympic YEAR revPAR in USD
Atlanta 1996
Sydney 2000
Athens 2004
Beijing 2008
London 2010 monthly results

86. 2011 Year End revPAR Forecast
-10% to -5%
-5% to 0%
0% to 5%
5% to 10%
10% to 15%
15% to 20%
20% +
Munich
Berlin
Amsterdam
Budapest
Dusseldorf
Rome
Moscow
Birmingham
Athens
Copenhagen
Madrid
Prague
Frankfurt
Brussels
Dublin
Milan
Heathrow
Cologne
Edinburgh
London Up Up
Glasgow
Gatwick
London Up
Hamburg
London Mid
Newcastle
Istanbul
Malmo
Stockholm
Leeds
Oslo
Vienna
Lisbon
Reg. UK Lux
London
Reg. UK Mid
London Lux
Warsaw
Manchester
Paris
Reg. UK
Reg. UK Up Up
Reg. UK Up
Stuttgart
Budapest, Warsaw, Copenhagen are in Euros not local currency
(local currency, except where noted)

87. Asia Pacific Pipeline Total of 346,300 rooms in the pipeline
Year to date, August 08
In Local Currency
Selected Asian markets
% change of occupancy and ADR on prior timeframe
ADR growth in all but one market
Occupancies are declining
Room supply in China will increase about 16% over the next 3-5 years.
India - an increase of just under 50%.

88. Active Pipeline In Asia Keeps Heating Up
*Active Pipeline Rooms (‘000), Q4 ’09 vs. Q4 ‘10
Source: STR/ STR Global/McGraw-Hill Construction

89. Europe Pipeline – 587 hotels
Comprehensive Pipeline Outlook Dec 09
Comprehensive Pipeline review Dec 2009 –Europe by country (total 587 hotels in pipeline)
in construction: Ground has been broken or the owner is finalizing bids on the prime contract
Final Planning: the project will go out for bids or construction will start within 4 months
Planning: an architect or engineer has been selected for the project and plans are underway. Initial approvals have usually been granted.

90. MEA Pipeline – 442 hotels Comprehensive Pipeline Outlook Dec 09
Comprehensive Pipeline review Dec 2009 –MEA (total 442 hotels in pipeline)
in construction: Ground has been broken or the owner is finalizing bids on the prime contract
Final Planning: the project will go out for bids or construction will start within 4 months
Planning: an architect or engineer has been selected for the project and plans are underway. Initial approvals have usually been granted.

91. Questions?
Steve Hood
, extension 3315