HOST Almanac 2015 U.S. Hotel Operating Statistics for the year 2014 AN A LY TI C S AN A LY TI C S The HOST Almanac is an annual publication of STR Analytics, a division of STR, Inc. All information contained in this report is assembled and compiled by STR Analytics. Although information in this publication has been obtained from sources that STR Analytics believes to be reliable and accurate, we do not guarantee its accuracy since it is submitted by third parties. See page 32 for detailed information on study methodology and techniques. All opinions and estimates included in the HOST Almanac constitute the best judgment of STR Analytics and are subject to change without notice. This publication is not intended to represent the rendering of legal, accounting or professional services. Reproduction is prohibited without prior written authorization. Items may be quoted when full credit is given to the HOST Almanac by STR Analytics. 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All rights reserved The HOST Almanac is published by and all data in the HOST Almanac are compiled by: STR Analytics 11001 W. 120th Ave., Suite 250 Broomfield, Colorado 80021 HOST Almanac 2015 Page 2 table of contents AN A LY TI C S reports u.s. lodging industry profitability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 room revenue’s relationship to market value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 inflation-adjusted profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 mapping profitability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 looking back: the u.s. hotel industry in charts and graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 info geographic regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 summaries total u.s. summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 full-service summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 limited-service summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 total u.s. summary ratio-to-sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 total u.s. summary per-available-room. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 total u.s. summary per-occupied-room night . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 full-service full-service summary ratio-to-sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 full-service summary per-available-room . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 full-service summary per-occupied-room night. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 limited-service limited-service summary ratio-to-sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 limited-service summary per-available-room. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 limited-service summary per-occupied-room night . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 total u.s. detailed analysis ratio-to-sales ratio-to-sales ratio-to-sales ratio-to-sales total total total total u.s. u.s. u.s. u.s. per-available-room per-available-room per-available-room per-available-room per-occupied-room per-occupied-room per-occupied-room per-occupied-room detailed detailed detailed detailed total total total total u.s. u.s. u.s. u.s. night night night night revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 departmental expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 undistributed expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 selected fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 detailed detailed detailed detailed total total total total u.s. u.s. u.s. u.s. revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 departmental expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 undistributed expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 selected fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 detailed detailed detailed detailed revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 departmental expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 undistributed expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 selected fixed costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 payroll analysis payroll summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 ratio-to-sales total u.s. detailed payroll. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 per-available-room total u.s. detailed payroll. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 per-occupied-room night total u.s. detailed payroll. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 glossary glossary of HOST terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 HOST Almanac 2015 Page 3 u.s. lodging industry profitability AN A LY TI C S Hotel industry revenue levels topped an estimated US$176 billion in 2014, adding nearly $14 billion in revenue from 2013. Total industry-wide house profit reached nearly US$66 billion, an increase of 12.8% over 2013. On an absolute nominal basis, this house profit represents an all-time high, though as a percent of total revenue is still below profit levels recorded in the late 1990’s, 2006 and 2007. The following chart details U.S. hotel industry profitability from 1990 to 2014. Please note this data extrapolates only on scale with the total amount of properties reporting room revenue to STR and uses all properties that reported profitability data, not just same-store properties. Also, house profit is defined as profit before deductions for fixed charges and management fees. U.S. Hotel Profitability (1990-2014) $200 100% $176.7 $180 Billions USD, Nominal $160 90% 80% $145.3 $140 70% $120 60% $106.2 $100 50% 39.0% $80 38.4% 37.3% $60 $41.4 $65.8 $55.8 $40 40% 30% 20% $20 10% $0 0% 1990 1992 1994 1996 Total Revenue 1998 2000 House Profit 2002 2004 2006 2008 2010 2012 2014 House Profit % of Total Revenue “What’s interesting was not just the increases in revenue, but the surge in operating expenses in 2014,” said Joseph Rael, who oversees the HOST program at STR Analytics. “On a per-available-room basis, we’re seeing administrative and general, marketing, maintenance and utilities at growth rates much higher than what we experienced last year. We’re also seeing total management fees growing faster than total revenue, which indicates incentive fees are finally kicking in.” HOST Almanac 2015 Page 4 The Almanac Suite The ultimate resource for the hotel investment community. These four reports contain the information you need to help evaluate investments, performance, risk, development potential and more. AN A LY TI C S Hotel Transaction Almanac The Hotel Transaction Almanac is the most comprehensive source of hotel transaction statistics. STR Analytics combines their in- house transaction database with that of data partner Hotel Hotel Transaction Almanac 2014 Brokers International (HBI) to create this comprehensive Hotel U.S. Hotel Transactions for the year 2013 AN A LY TI C S Hotel Transaction Almanac 2014 Page 1 Transaction Almanac. HOST Almanac The definitive database of hotel revenue and expenses. The HOST Almanac contains information by department, including detailed rooms, food and beverage, marketing, utility costs, property and maintenance, administrative and general, as well as select fixed charges. Hotel Development Almanac A valuable source of information to assist in the evaluation of hotel projects. Combining data from STR’s comprehensive Census and Pipeline Databases, this desktop reference guide contains analysis and development cost information for previous years’ hotel openings in the United States. Hotel Investors Gauge A quarterly survey of lenders, developers and investors that measures the current state of financing market conditions and ascertains critical future expectations through the lens of the hotel investment community. Pricing Individual Reports: $500 each Bundle Option 1: $1,200 ($300 savings) - select three reports Bundle Option 2: $1,500 ($500 savings) - purchase three reports, get the fourth free www.STR.com info@str.com +1 615 824 8664 ext. 3504