International Hotel Industry - December 2007

INTRODUCTION
 KEY POINTS
 DEFINITIONS
Hotel companies
Key terms and abbreviations
DATA SOURCES
ECONOMIC OUTLOOK
 CURRENT OUTLOOK FOR GDP GROWTH
 THE RISK OF FALLING PROPERTY PRICES
Figure 1: Real GDP, (% change from previous year), 2006-08
 LONG-TERM GROWTH PROSPECTS
 PURCHASING POWER PARITY OF LITTLE RELEVANCE
Figure 2: Chinese household income by income bracket, 2006 & 2025
 CONSUMPTION TO LAG OVERALL GROWTH
Figure 3: Real private consumption expenditure (% change from previous year), 2006-08
 INTEREST RATES
Short term
Figure 4: Trend & outlook for short-term interest rates*, 2006-08
Long term
Figure 5: Outlook for long-term interest rates, 2007-08
 SURGING OIL PRICES
 EXCHANGE RATE OUTLOOK
Figure 6: Outlook for exchange rates (vis à vis the US dollar), 2003-06
Figure 7: Average exchange rates against the Euro, 2006-08
 OUTLOOK FOR SPENDING ON TRAVEL AND TOURISM TO 2017
Figure 8: Travel & tourism expenditure worldwide, 2007-17
HOTEL CAPACITY WORLDWIDE
Figure 9: Estimated number of rooms in hotels and similar establishments worldwide, 2001-06
 AFRICA
Figure 10: Trend in the number of rooms in hotels and similar establishments in selected African countries, 2002-06
South Africa
 AMERICAS
Caribbean
Figure 11: Trend in the number of rooms in hotels and similar establishments in selected Caribbean destinations, 2002-06
Central & South America
Figure 12: Trend in the number of rooms in hotels and similar establishments in selected Latin American countries, 2002-06
Argentina
Brazil
Figure 13: Hotel and room capacity in Brazil, 2003-06*
North America
Canada
Figure 14: Capacity breakdown and supply and demand trends for upscale hotels by major Canadian city and province, year ending July 2007
Mexico
Figure 15: Trend in the number of rooms in hotels and similar establishments in Mexico, 2002-06
Figure 16: Hotel capacity in Mexico by grade, 2005
US
Figure 17: Hotel property/room breakdown by location, rate category and size, 2005
Figure 18: Supply growth in the US hotel market, 2004-09*
Figure 19: Hotel room pipeline in the US by stage of development, April 2007
Figure 20: Hotel room pipeline by category – number of rooms under construction, December 2004
 ASIA-PACIFIC
Australia
Figure 21: Hotel, motel and serviced apartment room capacity in Australia, December 2006
China
Figure 22: Number of rooms in hotels and similar establishments in China, 2000-05
Figure 23: Hotels in Mainland China by grade at end 2006
Figure 24: Profile of Mainland Chinese hotel sector, 2005
Hong Kong
Figure 25: Hong Kong hotel room supply, 2002-11
Macao
Figure 26: Long-term projection of hotel projects in Macao, 2007
Japan
Figure 27: Number of rooms in hotels and similar establishments in Japan, 2001-05
Thailand
Figure 28: Trend in the number of rooms in hotels and similar establishments in Thailand, 2001-04
Figure 29: Geographical distribution of Thai hotel & guesthouse capacity, 2006
Figure 30: Thai hotel & guesthouse capacity by size, 2004 & 2006
Other East Asian countries
Figure 31: Trend in the number of rooms in hotels and similar establishments in selected East Asian countries, 2002-06
 SOUTH ASIA
India
Figure 32: Hotels belonging to the FHRAI, 2002-06
Future capacity expansion
Budget hotels
The long-term outlook
Figure 33: New hotel capacity by market segment) projected to enter the market over the period 2006-11, by major urban market
Figure 34: New room supply by major Indian destination, 2006-11
Pakistan and Sri Lanka
Figure 35: Trend in the number of rooms in hotels and similar establishments in Pakistan & Sri Lanka, 2002-06
 EUROPE
Figure 36: Chain hotel capacity in the 27 EU countries by star grade, 2006-07*
Alpine region
Figure 37: Trend in the number of rooms in hotels and similar establishments in Austria & Switzerland, 2002-06
Switzerland
Figure 38: Hotels and health spas according to size of establishment, 2006
Figure 39: Swiss hotel and cure establishment by major canton, 2006
Benelux
Figure 40: Trend in the number of rooms in hotels and similar establishments in Belgium & the Netherlands, 2002-06
Eastern Europe
Figure 41: Trend in the number of rooms in hotels and similar establishments in selected Eastern European countries, 2002-06
Moscow
Figure 42: Russian hotel capacity in the pipeline, 2007
Eastern Mediterranean
Figure 43: Trend in the number of rooms in hotels and similar establishments in Eastern Mediterranean countries, 2002-06
France
Figure 44: French hotels by grade, location and affiliation at end 2006
Figure 45: French hotel rooms by grade, location and affiliation at end 2006
Figure 46: French hotel capacity in the pipeline, 2007
Germany
Figure 47: Breakdown of registered lodging capacity in Germany, July 2007
Figure 48: German hotel capacity in the pipeline, 2007
Italy
Figure 49: Italian hotel capacity by region, 2006
Figure 50: Italian hotel capacity by grade, 2004
Figure 51: Italian hotel capacity in the pipeline, 2007
Nordic area
Figure 52: Trend in the number of rooms in hotels and similar establishments in Nordic countries, 2002-06
Portugal
Figure 53: Trend in the number of rooms in hotels and similar establishments in Portugal, 2002-06
Figure 54: Hotel room capacity by region in Portugal, 2005
Spain
Figure 55: Spanish lodging capacity by principle region, September 2007
Figure 56: Breakdown of available hotel capacity by grade, 2002 & 2007
Figure 57: Spanish hotel capacity in the pipeline, 2007
UK
Figure 58: Hotels registered with tourist boards in the UK*, 2003/04
London accommodation supply
Figure 59: London hotel supply change by grade, 2002-06
UK hotel pipeline
Figure 60: UK hotel capacity in the pipeline, 2007
 MIDDLE EAST
Figure 61: Trend in the number of rooms in hotels and similar establishments in selected Middle Eastern countries, 2002-06
Figure 62: Middle East hotel pipeline by country, 2007-10
CHAIN PENETRATION BY REGION
Figure 63: Estimated branded rooms by region, 2007
 AMERICAS
Canada
Figure 64: Top Three hotel groups in Canada, 2006
Figure 65: CHI hotels in Canada by brand, 2007
Latin America
Figure 66: Hotel penetration in Brazil, 2003-06
Accor
Figure 67: Accor’s hotel capacity in Latin America & the Caribbean, by affiliation structure, at end June 2007
Figure 68: Accor’s hotel capacity in Latin America & the Caribbean, by brand, at end 2006
Sol Meliá
Figure 69: Sol Meliá hotel properties by country in Latin America and the Caribbean, end 2006
CHI
Figure 70: CHI hotels by brand in Mexico and Central & South America, 2006
Atlantica
Grupo Posadas
Figure 71: Geographical distribution of Grupo Posadas hotel capacity by brand, September 2007
Figure 72: Distribution of Grupo Posadas hotel capacity by country and type of location, September 2007
Recent development and pipeline
Figure 73: Grupo Posadas’s pipeline by brand and region, September 2007
US
Figure 74: Top 25 hotel brands in the US ranked by number of rooms, March 2007
The fastest-growing brands
Figure 75: The ten fastest rowing hotel brands in the US between March 2006 and March 2007
Figure 76: Brand introductions, 2007
Figure 77: Brand introductions, 2006
Figure 78: Brand introductions, 2005
Figure 79: US pipeline of major multi-brand chains by lodging segment, October 2007
New brands are gaining a following
Figure 80: New brand US pipeline, October 2007
The effects of the ‘credit crunch’ may be felt in a quarter or two
 ASIA
Figure 81: Top ten hotel chains in Asia* ranked by number of rooms at end 2006
China
Figure 82: The leading hotel chains in China ranked by rooms, 2007
Accor
Hilton
Hyatt
InterContinental Hotels Group (IHG)
Jin Jiang
Figure 83: The Jin Jiang upscale pipeline, 2007
Jinling Hotels & Resorts
Shangri-La
Figure 84: Shangri-La in China, 2006
Starwood
Wyndham
Budget hotel expansion
India
Indian Hotels Company/Taj
Figure 85: Growth in Taj hotel capacity & revenues, 2004-07
Taj’s pipeline
Figure 86: Taj pipeline: new-builds, 31 March 2007
Figure 87: Taj pipeline: management contracts, 31 March 2007
ITC WelcomGroup
Leela Hotels
Oberoi
Sarovar Hotels & Resorts
Japan
IHG’s tie up with ANA hotels yields 12,000 rooms
JAL Hotels to be spun off
The big luxury brands are moving into Tokyo
INTERNATIONAL CHAINS
 CHAIN PENETRATION IN AFRICA & MIDDLE EAST
Africa
South Africa
Tunisia
Middle East
Figure 88: Market share of major chains by Middle Eastern country, 2007
Rotana
 CHAIN PENETRATION IN AUSTRALIA
Figure 89: The top Australian hotel operators at end December 2006
 CHAIN PENETRATION IN EUROPE
Figure 90: Estimated chain penetration of total rooms in selected European countries, 2007
The top ten hotel groups
Figure 91: Chain hotel capacity in the 27 EU countries by star grade 2006-07*
Accor
Figure 92: Accor’s European portfolio by brand, 31 December 2006
Figure 93: Accor’s budget pipeline by European country, 2007
Best Western
CHI
Hilton
IHG
Marriott
NH Hoteles
Rezidor
Sol Meliá & other Spanish resort operators
Figure 94: The 50 top brands in the 27 EU countries by room capacity, 2006-07*
Chain penetration by country in Europe
Austria
Figure 95: The five leading hotel brands in Austria by number of rooms, at 1 January 2007
Belgium
Figure 96: The five leading hotel brands in Belgium by number of rooms, at 1 January 2007
Finland
Figure 97: The five leading hotel brands in Finland by number of rooms, at 1 January 2007
France
Louvre Hotels
Figure 98: The ten leading hotel brands in France by number of rooms, at 1 January 2007
B&B Hotels
Germany
Accor and Dorint
Maritim
Figure 99: The five leading hotel brands in Germany by number of rooms, at 1 January 2007
Motel One
Sol Meliá
Greece
Figure 100: The five leading hotel brands in Greece by number of rooms, at 1 January 2007
Hungary
Figure 101: The five leading hotel brands in Hungary by number of rooms, at 1 January 2007
Ireland
Figure 102: The five leading hotel brands in Ireland by number of rooms, at 1 January 2007
Italy
Figure 103: The five leading hotel brands in Italy by number of rooms, at 1 January 2007
The Netherlands
Figure 104: The five leading hotel brands in the Netherlands by number of rooms, at 1 January 2007
Poland
Figure 105: The five leading hotel brands in Poland by number of rooms, at 1 January 2007
Portugal
Figure 106: The five leading hotel brands in Portugal by number of rooms, at 1 January 2007
Figure 107: The five leading hotel brands in Spain by number of rooms, at 1 January 2007
Russia
Figure 108: International chain presence in Russia and CIS, September 2007
Hilton has big plans
A Copthorne in Moscow
Sweden
Figure 109: The five leading hotel brands in Sweden by number of rooms, at 1 January 2007
UK
Figure 110: The five leading hotel brands in the UK by number of rooms, at 1 January 2007
Figure 111: Leading UK budget hotel brands, 2007
 CHAIN PENETRATION IN INDIA
Accor
100 Formule 1
15 Ibis hotels
Midscale hotels: Novotel and Mercure
Best Western/Cabana
Carlson Hotels Worldwide
Figure 112: Carlson’s pipeline, August 2007
CHI
easyHotel
Hilton
Figure 113: Current Hilton-DLF joint-venture pipeline in India, 2007
IHG
Marriott International
Figure 114: Marriott’s current pipeline in India, 2007
Premier Travel Inn/Emaar
Starwood Hotels & Resorts
Wyndham Hotels & Resorts
HOTEL PERFORMANCE BY REGION
 AFRICA & MIDDLE EAST
Africa
South Africa
Figure 115: South African hotel performance, first half 2007
Middle East
Figure 116: Four- and five-star hotel performance by major city in the Middle East, 2005-06
Figure 117: Year-to date performance in major Middle Eastern hotel markets, June 2007
Profitability in Middle Eastern hotels
 AMERICAS
Canada
Figure 118: Hotel performance by major city and province in Canada, year-to-date July 2006 vs year-to-date July 2007
Latin America & the Caribbean
Figure 119: Latin American and Caribbean hotel performance by region – year to date, June 2006 vs June 2007
Figure 120: Latin American and Caribbean hotel performance by country – year to date, June 2006 vs June 2007
Figure 121: Latin American and Caribbean hotel performance by major city – year to date, June 2006 vs June 2007
Valuation trends
European hotels have offered the best currency-adjusted returns
Asian hotel values
Figure 122: Trend in the per room value of upscale hotels in major Asian cities (ranked by 2006 value), 2000-06
European hotel values
Outlook clouded by financing concerns
Figure 123: Trends in the per room value of upscale hotels in major European cities (ranked by 2006 value), 2000-06
Mexico
Figure 124: Upscale Mexican hotel performance – year to date, June 2006 vs June 2007
Figure 125: Hotel performance in the main tourist destinations, 2000-06
Figure 126: Performance by major tourism destination, 2004-05
US
Figure 127: Year-on-year percentage change in key performance indicators for the US hotel market, 2004- May 2007
Performance by category
Figure 128: US hotel performance by category – year to date, July 2006 vs July 2007
Performance by region and city
Figure 129: US hotel performance by region – year to date, July 2006 vs July 2007
New York is a winner
Figure 130: Operating performance by principal US city for the 12 months to end August 2007
Atlanta is flagging
Performance by type of location
Figure 131: US hotel performance by type of location – year to date, July 2006 vs July 2007
Hotel values in the US
Slowing growth is forecasted
Figure 132: Trend in the indexed value per room in major US cities, 2000-06*
 ASIA PACIFIC
Figure 133: Upscale hotel performance trend by major Asia-Pacific region, country & city, year-to-date, June 2006 vs June 2007
Figure 134: Hotel performance of selected markets across Asia Pacific – year-to-June 2007 compared to the prior year period
Australia
Figure 135: Tourist accommodation performance key Australian markets, year to date December 2006
Figure 136: Upscale hotel performance trend in Australia and in Sydney, year-to-date June 2006 vs June 2007
Brisbane
Cairns
Gold Coast
Melbourne
Perth
Sydney
India
Figure 137: Indian Hotel performance by grade, 2005-06
Figure 138: Trend in occupancy* by major Indian city/destination, 2000-07
Figure 139: Trend in ADR* by major city/destination, 2000-07
Figure 140: Trend in RevPAR* by major city/destination, 2000-07
Hotel profitability
Figure 141: Common-size income summary for the Indian hotel sector, 2001-06
North East Asia
Hong Kong
Shanghai
Vietnam
Singapore and Manila
 EUROPE
Hotel performance in Europe by star grade
Figure 142: Chain hotel performance in EU countries* by star grade, year-to-end August 2007 compared to the prior year period
Recent performance by country in Europe
Italy has the highest rates
Figure 143: Chain hotel performance by selected country in the EU, year-to-end August 2007 compared to the prior year period
Hotel performance in Europe by major city
Figure 144: Key European city performance, six months year-on-year to end June 2007
France
Figure 145: Chain hotel performance in France by star grade, year-to-end August 2007 compared to the prior year period
Germany
Spain
UK
Scottish cities outperform provincial average
Figure 146: UK hotel performance* year-to-date end August 2007, compared to prior year period
UK forecast
Figure 147: Forecast performance for UK hotels, 2007-08, September 2007
HOTEL PROPERTY FINANCING AND MANAGEMENT
 SECURITISATION – A MAJOR SOURCE OF HOTEL FINANCING
Origins of the current ‘credit crunch’
Tighter lending conditions
Construction loans – a silver lining?
 REAL ESTATE INVESTMENT TRUSTS (REITS)
REIT valuation parameters
Hotel REITs in Canada
Canadian Hotel Income Properties (CHIP)
InnVest
Legacy Hotels
Royal Host
Hotel REITs in France
Foncière des Murs
A Hotel REIT in Hong Kong
Figure 148: Performance of Regal REIT’s hotel portfolio, 2003-06
Hotel REITs in Japan
Two hotel J-REITs
Singapore – CDL Hospitality Trusts
Figure 149: CDL Hospitality REIT hotel portfolio, 2007
Hotel REITs in the UK?
US hotel REITs
Figure 150: US hotel REIT characteristics, end September 2007
Host Hotels and Resorts, Inc
Figure 151: Host’s portfolio by brand, February 2007
Figure 152: Host’s portfolio by type of location, September 2007
Hospitality Properties Trust
 PRIVATE EQUITY
Blackstone
Figure 153: Blackstone funds’ major hotel acquisitions, 2004-07
Carlyle
Colony Capital
Partnership with Kingdom Holdings
Morgan Stanley
 ASSET MANAGEMENT
DISTRIBUTION CHANNELS
Figure 154: Reservations by channel for major hotel chains, Q2 2007
Figure 155: Reservations by channel for major hotel chains, Q2 2007
 TRENDS IN SPENDING BY HOTELS ON WEB-MARKETING
Key findings
Internet marketing ROI
Figure 156: What hoteliers believe are the best Internet marketing strategies, 2007
Budget allocations differ across industry segments
Figure 157: Breakdown of budgeted hotel spending on Internet distribution by category, 2007
Budget allocations differ between the US and internationally
US vs international hotels
Figure 158: Budget allocations for hotel Internet marketing – the US compared tothe rest of the world, 2007
Internet marketing budget allocations trends 2007
Web 2.0 – here to stay or a flash in the pan?
aloft enters and then exits ‘Second Life’
Web 2.0 presents risks as well as opportunities
Targeted advertising via Web 2.0
SPAS & WELLNESS
Figure 159: Spa-goers worldwide by gender and country, 2006
 DEFINITIONS
 PREFERRED TREATMENTS BY COUNTRY
Figure 160: Top treatments received in past 12 months by country, 2007
 CURRENT TRENDS IN TREATMENT
 SPAS AS PROFIT CENTRES?
Figure 161: Rate premium for US luxury hotels with spas as compared to those without, 1997-2007
 SPA REVENUE ANALYSIS
 PROFITABILITY
Luxury spas in developing countries can be very profitable
 PHYSICAL ATTRIBUTES
 CONSTRUCTION COSTS
ENVIRONMENT AND SUSTAINABLE DEVELOPMENT
 ECO-BRANDING
The International Hotels Environment Initiative
1 Hotel & Residences
LEED standards
Fairmont
Motel 6
 GOVERNMENT ACTION REQUIRED
 ENERGY-STAR – A STEP IN THE RIGHT DIRECTION
 IN-ROOM ENERGY MANAGEMENT SYSTEMS
IN-HOUSE TECHNOLOGY AND DESIGN FEATURES
 ON-PROPERTY ENTERTAINMENT
Hilton’s ‘Sight+Sound’ rooms
Hyatt’s music offering
 HOTEL DESIGN
Design hotels
Marriott and Hyatt play catch-up in the boutique segment
Marriott and Ian Schrager
Hyatt’s ANdAZ
Budget hotel design
CitizenM
easyHotel
Motel One
YOTEL
WHAT NEXT?
 OPTIMISM REIGNS
 RISING HOTEL RATES PREDICTED
Figure 162: Forecast hotel rate* rises by region, for 2008
Asia-Pacific
Figure 163: Forecast hotel rate* rises in Asia-Pacific, for 2008
Figure 164: Forecast hotel rate* rises in Latin America & Caribbean, for 2008
Europe
Figure 165: Forecast hotel rate* rises in Europe, for 2008
North America
Figure 166: Forecast hotel rate* rises in North America, for 2008
 WHAT COULD GO WRONG?
 GROWTH FORECASTS BEING CUT