- Strong ADR and group demand
- Domestic REVPAR (constant-currency): +5.3%
- Except Houston and NY, portfolio performed in-line or better
- Group demand: +2.7%, rate: +4.7%, Overall group rev: +7%
- Transient demand: >2%, rate: +4.9%, transient revs: >+4%
- June was strongest month; April was a renovation month
- Calgary Marriott Downtown Hotel renovations
- YTD, REVPAR: +4.4%
- Overseas travel (excluding Mexico and Canada): +3%
- Weakness in travel from EU offset by strong travel from West Coast (Asian customers)
- F&B: +5% (+2% on adjusted basis), excellent flowthrough
- Euro JV: Sold Crown Amsterdam for $106 euros. Expect to close another asset transaction for $10m
- Transactions impact on 2016: +12m
- $100-200m in international sales by end of 2015. $100-250 in domestic sales in 2015.
- YTD, invested $101m in ROI projects, $220 renewal projects
- Outlook for 2015:
- Group bookings in 2Q for 3Q/4Q grew 20%. Booked revs are flat in 3Q (calendar challenges) and up 6% in 4Q
- Pleased with shift to higher-rated business
- Overall, expect 2H REVPAR to trend higher than 1Q 2015
- Net M&A will reduce FY 2015 EBITDA by $5mm
- Houston and NY will underperform previous expectations
- Seeing strength in group rates for 2016
- 2Q: San Diego, Seattle, San Francisco, Hawaii all achieved double digit REVPAR
- San Diego: Group +19%, Transient +12%
- Seattle: Group: +15%, Transient: +14%, F&B: +17% (banquet/catering lead)
- San Francisco: strong association business, transient: +9%, group: +8%; expected to only slightly outperform portfolio for 2H 2015
- Hawaii: F&B: +27% (banquet/catering/outland sales), group & transient: +20%, Hawaii expected to underperform in 2H 2015 due to decrease in citywide events and and visits from Japanese customers.
- Atlanta: F&B+ +15%, expect Atlanta to outperform portfolio in 2H 2015
- Washington DC: group nights: +12%, transient nights: -11%; group rev: +19%, transient rev: -3%.
- NY/Houston/Calgary: combination of increased supply, renovation and oil issues
- Originally expected NYC to be slightly positive REVPAR, did not happen. High supply and lower international travel to US impacted US. Expect better group bookings pace in 2H vs 1H.
- Houston: flooding in May. Some renovation disruption in December 2015.
- Calgary: declining energy business
- 8 of our 18 Euro JV hotels achieved +9% REVPAR. Outlook on Euro hotels remain encouraging. Spain/Netherlands is improving. YTD, US travel to Europe up 5% with 3Q looking stronger.
- 3Q REVPAR should be slower than 1H REVPAR
- 4Q REVPAR (strongest quarter of year) should exceed 3Q REVPAR
Q & A
- M&A markets: expect to put a lot of domestic properties in the market in the fall. Looking to acquire in LA and Seattle.
- Best pricing is for one off transactions
- Group demand in the quarter for the quarter: modestly down
- NYC: Flat bookings pace in 2016 (down in 2015)
- 2015 NYC EBITDA will be 12% of total
- Lowered FY 2015 EBITDA
- -~$5m EBITDA: Phoenician addition offset by EBITDA loss properties sold for a net of $5m
- The rest of EBITDA decline is spread out among the factors they raised (e.g. NY/Houston, renovations)
- Secondary markets had better occupancy gains in last 12 months
- NYC: least pricing power right now
- Hard to push rate for transient business
- 2016 Group bookings up 6% YoY in revs
- Continue to sell weaker assets in portfolio
- NYC: 1st few wks in July - roughly in-line with June (slightly positive REVPAR)
- Houston: a little of both cancellations and delays,
- Group bookings pace quite weak in 3Q but quite strong in 4Q
- Will be net seller in Europe