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Branded Serviced Apartments and Residences Worldwide - International - June 2010

INTRODUCTION
 KEY FINDINGS
Branded serviced apartments
Branded residences
DATA SOURCES
 MACROECONOMIC/GENERAL
 SERVICED APARTMENTS
 BRANDED RESIDENCES
Abbreviations
 DEFINITIONS
OVERVIEW
 AGEING OF THE POPULATION
Demographic implications
Figure 1: Percentage distribution of the population in selected age groups, by selected region and country, 2009 and 2050
 ECONOMIC GROWTH FORECAST FOR MAJOR COUNTRIES/REGIONS
Asia and Africa leading the way
Figure 2: Overview of the world economic outlook projections (% change, unless otherwise noted), January 2010
Financial markets have rebounded
Inflation and interest rate outlook
Figure 3: Inflation outlook, by monetary zone, April 2008-11
Figure 4: Interest rate forecasts, by currency zone, April 2010
Exchange rate outlook
Short-run forecasts
Figure 5: Exchange rate forecast, US Dollar against major currencies, April 2010
Figure 6: Exchange rate forecast, Euro against major currencies, April 2010
Figure 7: Exchange rate forecast, UK Pound against major currencies, April 2010
Figure 8: Exchange rate forecast, US Dollar against Eastern European and Latin American currencies, April 2010
Figure 9: Exchange rate forecast, Euro against Eastern European and Latin American currencies, April 2010
The Renminbi is a contentious issue
Figure 10: Exchange rate forecast, US Dollar against Asian currencies, April 2010
Figure 11: Exchange rate forecast, Euro against Asian currencies, April 2010
 SPENDING FORECASTS BY MAJOR REGION/COUNTRY
Figure 12: Travel and tourism expenditure worldwide, 2010-20
Crisis has decimated the rank of the wealthy
Figure 13: Number of HNWIs, by region, 2005-08
Latin America wealthy suffered least
Figure 14: HNWIs by country, 2007-08
US still the leader for HNWIs
A surge of HNWIs in the BRICs
Also some big losses
Over half of Asian HNWIs in Japan
Ultra-HNWIs hit even harder
Figure 15: Number of HNWIs and ultra-HNWIs, by region, 2008
A brightening outlook
Asia-Pacific to surpass North America
Europe and Middle East to lag
Figure 16: HNWI financial wealth trend and forecast, by region, 2006-13
 TREND IN RESIDENTIAL PROPERTY VALUES
The winners
… and the losers
A nascent recovery in 2010?
Figure 17: Knight Frank Global House Price Index, Q4/2009
A turnaround in London underway
A lack of supply
Housing starts up
Figure 18: Knight Frank Prime Central London Index results, Feb 2008-Feb 2010
A good harbinger
BRANDED SERVICED APARTMENTS
 CORPORATE HOUSING COMPETES WITH SERVICED APARTMENTS
Difference with extended stay
 COMPETITION FROM BUDGET HOTELS
 DIFFERENT GRADES OF PRODUCT
Figure 19: Extended stay brands, by ADR range in the US, 2009
 UPSCALE GROWING FASTEST IN THE US
Figure 20: Trend in the distribution of US extended-stay room supply in % of total room supply, 1998-2009
 ESSENTIALLY SERVING BUSINESS TRAVELLERS
Figure 21: Breakdown by travel purpose of serviced apartment guests by region, 2009
Leisure share increasing in the US
Figure 22: Trend in travel purpose of guests in US extended-stay hotels, 1998-2009
 EXTENDED-STAY PROFITABILITY BY SEGMENT
Economy extended-stay hotel profitability
Figure 23: Statement of income and expense for a hypothetical economy extended-stay hotel*, 2008-09
Midscale extended-stay hotel profitability
Figure 24: Statement of income and expense for a hypothetical midscale extended-stay hotel*, 2008-09
Upscale extended-stay hotel profitability
Figure 25: Statement of income and expense for a hypothetical upscale extended-stay hotel*, 2009
 REGIONAL DEVELOPMENT AND PERFORMANCE OF SERVICED APARTMENTS
11% capacity growth in 2009
Figure 26: Growth in number of serviced apartments*, by region, 2008 and 2009
 AFRICA
Recent performance trend
Figure 27: Trend in rates for serviced apartments in Africa, 2009
Figure 28: Trend in rates* for serviced apartments in Cape Town and Nairobi, Q3/2009
 THE AMERICAS
Figure 29: Trend in rates for serviced apartments in the Americas, 2009
Figure 30: Trend in rates* for serviced apartments in Buenos Aires, New York, Rio de Janeiro and Toronto, Q3/2009
US
Figure 31: Trend in US extended-stay RevPAR, by grade, 2002-09
Growing supply has impacted performance
Figure 32: Trend in US extended-stay occupancy, supply and demand, 2002-09
Figure 33: Trend in US extended-stay occupancy by grade, 2002-09
37% of extended-stay guests are transients
Figure 34: Trend in breakdown between extended-stay and transient* guests at US extended-stay hotels, by grade, 1998-2009
Figure 35: Trend in length of stay at US extended-stay hotels, by grade (in days), 1998-2009
Figure 36: Trend in US extended-stay ADR, by grade, 2002-09
Figure 37: Trend in US extended-stay revenues, by segment, 2002-09
Canada
Corporate housing in North America
Weakness in the upscale segment
Figure 38: Trend in US corporate housing stock and performance data, 2005-10
Canada
 ASIA
Figure 39: Trend in rates for serviced apartments in East Asia and Indian subcontinent, 2009
Figure 40: Trend in rates for serviced apartments in selected major Asian cities, Q3/2009
China
Hong Kong
India
Singapore
Thailand
Vietnam
 AUSTRALIA AND NEW ZEALAND
Figure 41: Trend in rates for serviced apartments in Australia and New Zealand*, 2009
Figure 42: Trend in rates for serviced apartments in Sydney and Auckland, Q3/2009
Trend towards sharing apartments
Pressure from lower hotel rates
Price differentials lessening
New properties
 EUROPE
Figure 43: Trend in rates for serviced apartments in Europe, 2009
Madrid the cheapest – Paris the most expensive
Figure 44: Trend in rates for serviced apartments in selected major European cities, Q3/2009
Germany
Berlin has become the leading market
Germans are price conscious
18,000 apartments in Germany
New properties
UK
Occupancies steady
New properties
 MIDDLE EAST
Figure 45: Trend in rates for serviced apartments in the Middle East, 2009
Dubai
Residential capacity being converted to serviced apartments
Figure 46: Trend in rates for serviced apartments in Dubai, Q3/2009
Capacity still growing
Figure 47: Dubai’s aparthotel sector capacity, 2009
Bavaria Executive Suites Dubai
 DISTRIBUTION
Figure 48: Percentage of serviced apartments on GDS, by region, 2009
Growth of sector stunted by lack of GDS listing
A different rate structure from hotels
Corporate housing unlikely to embrace the GDS channel
 FRANCHISE FEES
About 9.5% of room’s revenue
Figure 49: Franchise fees for US extended-stay brands, 2010
Franchising – a popular business model
PROFILES OF THE MAJOR OPERATORS
Figure 50: Suppliers of serviced apartments, 2009
 MARRIOTT INTERNATIONAL
Figure 51: Marriott International’s serviced apartment portfolio, by brand, year-end 2009
Marriott ExecuStay
Marriott Executive Apartments
Residence Inn
Figure 52: Marriott’s Residence Inn portfolio, by location and business model, 2009
Costa Rica
Ecuador
The European prototype
TownePlace Suites
 EXTENDED STAY HOTELS
Extended Stay in Chapter 11
The chain has continued to operate
Senior debt holders offered a new package
A well-segmented extended-stay offer
Strategic approach
Extended Stay brands
Crossland Economy Studios
Extended Stay America
Extended Stay America Efficiency Studios
Extended Stay Deluxe
Homestead Studio Suites
StudioPLUS Deluxe Studios
Figure 53: Extended Stay hotels’ serviced apartment portfolio, by brand, 2009
 PIERRE & VACANCES
Accommodation supply
Figure 54: P&V Group accommodation units by brand, September 2009
Figure 55: Geographical breakdown (number of apartments/homes), September 2009
Figure 56: Number of P&V-branded apartments, by type of location, September 2009
Figure 57: Structure of P&V’s tourism residence portfolio (number of apartments/homes), September 2009
Source markets
Figure 58: Breakdown of group accommodation turnover, by client origin, fiscal year 2007/08 & 2008/09
Revenues down slightly
Expansion projects
Extension of Avoriaz
Expansion in Morocco
 INTERCONTINENTAL HOTELS GROUP
Figure 59: IHG’s serviced apartment portfolio, by brand, 2009
Candlewood Suites
Amenities
A fast grower
A majority are franchised
A new design
Staybridge Suites
A first property in the Arab gulf region
Development
Figure 60: Staybridge Suites capacity, by region and business model, 2010
Pipeline
 OAKWOOD
Products and services
Apartment amenities
 HILTON
Homewood Suites
Six Homewood suites properties sold
Figure 61: Chatham Lodging Trust’s Homewood Suites portfolio, 2010
Home2 Suites by Hilton
Low construction and operating costs
Guestrooms
Special features and amenities
100 properties by 2013?
Six new locations approved in Q1/2010
Home2 Suites to compete with Candlewood and TownePlace Suites
 ACCOR
Adagio
À-la-carte services
Rate structure
Adagio set to quadruple its room count?
Figure 62: Accor’s serviced apartment portfolio, by brand, 2009
Mercure
Suitehotel
Studio 6
Figure 63: Franchise fee structure, 2010
 ASCOTT INTERNATIONAL
Figure 64: Ascott International’s serviced apartment portfolio, by brand, 2009
Portfolio development by region/country
China
Somerset opens in Chengdu
Figure 65: Ascott’s Asia-Pacific serviced residence portfolio in China, 2009
India
Ascott in Ahmedabad
Figure 66: Ascott’s Asia-Pacific serviced residence portfolio in India, 2009
Japan
A second Citadines in Japan
Figure 67: Ascott’s Asia-Pacific serviced residence portfolio in Japan, 2009
South East Asia & Oceania
Figure 68: Ascott’s serviced residence portfolio in South East Asia and Oceania, by country, 2009
Europe
Figure 69: Ascott’s European serviced residence portfolio, by country, 2009
 STELLA HOSPITALITY
Stella brands
Peppers
Breakfree and Mantra
Conference facilities
Distribution and marketing
Revenue management
Human resources
Asset elevation
 VALUE PLACE
A no-frills hotel chain
Guest profile
Brand attributes
Low construction cost
Pricing policy
Performance
High profit margins
Outlook
 CHOICE HOTELS INTERNATIONAL
MainStay Suites
Figure 70: Mainstay Suites key figures, 2005-09
Suburban Extended Stay Hotel
Figure 71: Suburban Extended Stay Hotel key figures, 2005-09
 WYNDHAM WORLDWIDE
Hawthorn Suites repositioned
Portfolio
Figure 72: Number of Hawthorne properties per US state, 2010
International expansion
Hawthorn Suites opens in Nigeria
 QUEST SERVICED APARTMENTS
Quest’s franchise model
Site selection, training and promotion
Return on investment
Properties
Pipeline
Frequent-guest programme
 RESIDHOTEL
Families with young children targeted
Distribution
Figure 73: Breakdown of ResidHotel’s revenue, by distribution channel in 2008
Properties by type of location
Mountain residences
Seaside residences
Countryside residences
City aparthotels
Residhotel Adama
Figure 74: Residence Adama rates, price per apartment per week, winter 2010
Figure 75: Residence Adama rates, price per apartment per night, winter 2010
Food and beverage services
Kids club
Leisure amenities
 FRASERS HOSPITALITY
Figure 76: Frasers’ portfolio, by brand and location, 2010
Development and future expansion
Client profile
 HYATT SUMMERFIELD SUITES
BRANDED RESIDENCES
 SECTOR HAS SUFFERED FROM THE CRISIS
 REGIONAL DEVELOPMENT
 PURCHASER FINANCING – A TABOO SUBJECT
PROFILES OF SELECTED MAJOR DEVELOPERS
 AMARI HOTELS & RESORTS
Property details
Figure 77: Planned Amari Hua Hin facilities and services, 2010
 BANYAN TREE
Resorts with residences for sale
Figure 78: Existing Banyan Tree’s resorts with residences for sale, 2009
Architecture and design philosophy
Investment details and membership benefits
Exchange programme
Laguna Phuket
Grand Residences
DoublePool Villas
Pool Villas
Figure 79: Banyan Tree Phuket term sheet – two-bedroom pool villas, 7 May 2010
Legal ownership structure and benefits
Investment options
Payment Terms
Figure 80: Option 2 – financing option details, 2010
Banyan Tree Ungasan
Property details
Banyan Tree Lijiang
Resort facilities and amenities
Chun Feng Tea House Main Lobby
Residence amenities
Banyan Tree Hotels Residences Mayakoba
Terrace residences
Spa Pool Villas
Pipeline
Upcoming destinations
Construction at Al Gurm Resort held up
Outcome remains uncertain
 FAIRMONT
Fairmont Residences, Pacific Rim, Vancouver, Canada
Fairmont Residences, the Palm Jumeirah, Dubai, UAE
Fairmont Residences, Shock Hill, Colorado
Fairmont Residences, On the River, Colorado
Fairmont Residences Zamalek Island, Cairo
Emaar residences at the Fairmont Makkah (Mecca)
Targeting pilgrims
Fairmont Residences and Fairmont Estates Mina al Fajer, Fujairah, UAE
 FOUR SEASONS
One of the first in private residences
Development and sales are outsourced
Austin, Texas
Baltimore, Maryland
Beijing
Bora Bora
Denver
Mauritius
Miami
Nevis
Stewart’s Estates
Clarke’s Estates
Villas at Pinney’s Beach
Punta Mita, Mexico
Figure 81: Estimated cost of a three-week stay in a Four Seasons villa at Punta Mita, 2010
Seattle
Seychelles
Toronto
Vail
 HILTON
Conrad Koh Samui Residences
Figure 82: Details of Conrad Koh Samui Residences, 2010
Waldorf Astoria Jerusalem
Waldorf=Astoria Hotel & Residences Montreal
 KEMPINSKI RESIDENCES
Kempinski Hotel Adriatic, Istria, Croatia
Private Residences San Lawrenz Gozo
Kempinski Private Residences Bahía Estepona, Costa del Sol
Du Parc Kempinski Private Residences, Switzerland
Kempinski Private Residences Barbaros, Bodrum, Turkey
Kempinski Private Residences Astoria Istanbul
Bellevue Residences Istanbul
Kempinski Palm Jumeirah Residences
Kempinski Private Residences Alabadiyah Hills, Beirut
Tower Residences
Village Residences
Kempinski Private Residences Jakarta
Kempinski Private Residences Bayterek Almaty
Kempinski Private Residences Jeruyik Astana
 MARRIOTT/RITZ CARLTON
Figure 83: Ritz Carlton Residence locations, 2010
Currently operating residences
Figure 84: Sample of Ritz-Carlton residences, 2008
Ritz-Carlton residences at Dove Mountain
The Ritz-Carlton Golf Club, Dove Mountain Marana, Arizona
Kapalua Bay
Distribution and marketing of Ritz-Carlton residences
Marriott has stopped further development of timeshare and residences
Luxury residential development halted for good
 MANDARIN ORIENTAL
Mandarin Oriental Residences New York
Boston
Figure 85: Size and asking prices of apartments at Mandarin Oriental Residences Boston, 2010
Mandarin Residences open in Vegas
CityCenter, an US$11-billion complex
A difficult market environment
5-10 years to work off condo inventories
Vegas condo prices down 44% in 2009
Mandarin condos the most expensive
Financing programme for CenterCity condos
Design features
One Hyde Park
Mandarin Oriental’s residence pipeline
Figure 86: Mandarin Oriental’s residence development pipeline, 2009
 PIERRE & VACANCES
Les Senioriales
Property sales boomed in 2008/09
Figure 87: New construction and renovations, deliveries in 2008/09 & 2007/08
Renovation sales
Figure 88: Breakdown property development turnover, 2008-09
Property reservations
Figure 89: Property reservations, including VAT, 2008/09
Properties currently for sale
Figure 90: Stock of apartments marketed as of 30 September 2009
P&V resales
Figure 91: P&V resales available as of May 2010
 STARWOOD
Figure 92: Starwood’s private residence portfolio, 2010
Residential services group
Revenue recognition
W residences
Owner benefits programme
Atlanta
 TRUMP RESIDENCES
Trump International Hotel & Tower Chicago
Figure 93: Size and prices of Trump International Hotel and Tower Chicago Suites & Residence, 2008
Trump International Las Vegas
Trump International Hotel and Tower at Waikiki Beach Walk
Apartments for sale
Figure 94: Trump Tower Waikiki listings, 2010
Trump International Golf Club and Residences Puerto Rico
Trump Las Olas Beach Resort
Trump Ocean Club Panama
Trump Ocean Resort Baja
Trump Tower Palm Beach
WHAT NEXT?
 SERVICED APARTMENTS
Segmentation of serviced apartments by grade
Segmentation and growth in Europe?
Supply growth slowing in the US
Strong growth to continue in Asia Pacific
 BRANDED RESIDENCES
Development potential shifting to emerging markets
Recovery in markets will help…
…but financing remains a problem

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