Europe hotel performance update

Robin Rossmann - Managing Director

Source: 2020 STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Realty Information, Inc. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. The information in the presentation should not be construed as investment, tax, accounting or legal advice.

Questions we will look to answer today

Based on insights from high-quality actual achieved and business on the books data from 70,000 hotels around the world

  1. Where is the world in the recovery cycle?
  2. Can Europe save it's summer season?

Source: STR. 2020 © CoStar Realty Information, Inc.

2

Where is the world in the recovery cycle?

Source: STR. 2020 © CoStar Realty Information, Inc.

Slow-BBQ'ing meat gives us insight into the shape of hotels recovery

After an initial recovery, demand seems likely to plateau until a 'cure' is found for COVID-19

Typical recovery

shape

COVID-19

recovery shape

Source: STR. 2020 © CoStar Realty Information, Inc.

Half way through May most of the world still had restrictions

Level of restrictions on hotels / hotel demand drivers as at May 17

Hotel recovery driver levels

1. Enforced closures

2. Hotels allowed to open

3. Domestic leisure returns 4. Domestic business returns

5. International returns 6. Group returns

Source: STR. 2020 © CoStar Realty Information, Inc.

5

By the end of May things had started to ease

Level of restrictions on hotels / hotel demand drivers as at May 31

Hotel recovery driver levels

1. Enforced closures

2. Hotels allowed to open

3. Domestic leisure returns 4. Domestic business returns

5. International returns 6. Group returns

Source: STR. 2020 © CoStar Realty Information, Inc.

6

Now just a handful of countries with enforced hotel closures

Level of restrictions on hotels / hotel demand drivers as at July 13th

Hotel recovery driver levels

1. Enforced closures

2. Hotels allowed to open

3. Domestic leisure returns 4. Domestic business returns

5. International returns 6. Group returns

Source: STR. 2020 © CoStar Realty Information, Inc.

A month ago Europe in red, US emerging and China mixed

Occupancy of reporting (open) hotels in STR sub-markets. Rolling 7 days to 30 May 2020

Source: STR. 2020 © CoStar Realty Information, Inc.

8

Global Recovery

Occupancy of reporting (open) hotels in STR sub-markets, Rolling 7 days to July 4th 2020

Source: STR. 2020 © CoStar Realty Information, Inc.

9

Hotels are re-opening at pace

% of hotels closed based on STR sample - Data as at 09.07.2020

United States

Spain

Italy

United Kingdom

France

Poland

Germany

China

100%

90%

80%

70%

Spain still 60 - 70%

60%

closed

50%

France, UK, and Italy

40%

heading towards 50 -

40%

30%

20%

Germany only 15%

10%

closed

0%

China almost fully re-

feb-05

feb-12

feb-19

feb-26

mar-04

mar-11

mar-18

mar-25

apr-01

apr-08

apr-15

apr-22

apr-29

maj-06

maj-13

maj-20

maj-27

-03jun

-10jun

-17jun

-24jun

01-jul

08-jul

open, US not far

-01jan

-08jan

-15jan

-22jan

-29jan

behind

Source: STR. 2020 © CoStar Realty Information, Inc. 10

China & US similar. Europe, Africa & LATAM lag. ME & Asia in-between

Occupancy actuals, open hotels (reporting) & full supply (economic), Week ending July 5th

North America

44%

40%

Central America

15%

6%

15%

Europe

27%

Mainland China

15%

46%

Middle East

46%

Northern Africa

35%

Asia (excl. Mainland China)

12%

31%

27%

23%

8%

Australia & Oceania

20%40%

South America excl. Venezuela

Reporting Occ

Economic Occ

7%

7%36%

Southern Africa

Source: STR. 2020 © CoStar Realty Information, Inc. 11

China & ME plateau? - US still recovering - Europe awakes

Absolute Rolling 7 days Occ % of participating (open) hotels

China

Europe

Middle East

United States

80%

70%

60%

50%

40%

30%

20%

10%

0%

46,3

45,3

35,0

27,4

* China data for week ending June 28 not yet available

Source: STR. 2020 © CoStar Realty Information, Inc.

Occupancy on full inventory (economic) much lower for Europe

Absolute Rolling 7 days Occ % of full inventory hotels (economic occupancy)

China

Europe

Middle East

United States

80%

70%

60%

50%

40%

30%

20%

10%

0%

45,8

41,9

27,5

15,0

Source: STR. 2020 © CoStar Realty Information, Inc.

China recovery seems to have stalled due to new virus outbreak

Occupancy % change on same week prior year

11-17 May

18-24 May

25-31 May

1-7 June

8-14 June

15-21 June

22-28 June

29 June-5 July

0%

-10%

-20%

-30%

-40%

1st Tier cities

recovery lagging

-50%

-60%

other cities

Mainland China

1st Tier Cities

Other Cities

Source: STR. 2020 © CoStar Realty Information, Inc.

Are RevPAR's plateauing at 50% below 2019 levels?

RevPAR % change on same week prior year, local currency

0%

-10%

-20%

-30%

-40%

-50%

-60%

-70%

11-17 May

18-24 May

25-31 May

1-7 June

8-14 June

15-21 June

22-28 June

29 June-5 July

1st Tier cities

recovery lagging

other cities

Mainland China

1st Tier Cities

Other Cities

Source: STR. 2020 © CoStar Realty Information, Inc.

US recovery continuing towards 50% below 2019…. For now

Total U.S., Rolling 7 day RevPAR % Change and New COVID19 Cases

20%

RevPAR PC

New COVID19 cases

250 000

1,2

0%

200 000

-20%

150 000

-40%

-44,5 100 000

-60%

-80%

50 000

-83,6

-100%

0

15-Feb

29-Feb

14-Mar

28-Mar

11-Apr

25-Apr

9-May

23-May

6-Jun

20-Jun

4-Jul

Source: STR. 2020 © CoStar Realty Information, Inc.

US Class Performance: Lower End Classes Outperform

Total U.S., RevPAR % Change, week ending July 5th 2020

-26,4

-30,7

-39,1

-48,1

-54,1

-61,3

Luxury Class

Upper Upscale

Upscale Class Upper Midscale Midscale Class Economy Class

Class

Class

Source: STR. 2020 © CoStar Realty Information, Inc.

How quickly can Europe get to temperature?

STR. 2020 © CoStar Realty Information, Inc.

European country occupancy of open hotels ranges from 10%-40%

Occupancy, open hotels (reporting), Week ending July 5th

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

Source: STR. 2020 © CoStar Realty Information, Inc.

… but on a full inventory basis things look quite different

Occupancy, open hotels (reporting) & full inventory (economic), Week ending July 5th

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

Source: STR. 2020 © CoStar Realty Information, Inc.

… and occupancy ranges from 5-25%

Occupancy, open hotels (reporting) & full inventory (economic), Week ending July 5th

30%

25%

20%

15%

10%

5%

0%

Source: STR. 2020 © CoStar Realty Information, Inc.

Regional markets are leading the recovery - main cities lag

Occupancy, open hotels, week ending July 5th 2020

Regional

Main City

67

55

47

49

49

43

38

40

35

34

27

30

28

27

26

20

22

21

23

22

19

19

18

16

15

10

Portugal

Denmark

Belgium

Russia

Turkey

Austria Netherlands

Czech

Italy

Switzerland

France

Germany

Finland

Republic

Source: STR. 2020 © CoStar Realty Information, Inc.

Regional markets showing more resilience in rate

ADR change on same week in prior year, local currency, week ending June 28th 2020

Regional

Main City

22

11

12

2

2

4

0

-3

-12

-10

-8

-8

-14

-16

-18

-18

-21

-22

-23

-27

-29

-30

-39

-38

-36

-57

Italy

Switzerland Portugal Netherlands Belgium

France

Russia

Turkey

Denmark

Austria

Czech

Germany

Finland

Republic

Source: STR. 2020 © CoStar Realty Information, Inc.

UK shows this is likely due to change in business mix - not discounting

Weekly rolling 7 days until 4 July 2020. ADR actuals by UK market

London

UK regional

Source: STR. 2020 © CoStar Realty Information, Inc. 25

Now Europe is re-opening is business on books bouncing back?

Source: STR. 2020 © CoStar Realty Information, Inc. 26

Since march, the level of cancellations has been relentless

Aggregated next 83 day pickup for last 18 weeks

Amsterdam Zurich Edinburgh Madrid

4%

2%

0% -2%-4%-6%-8%-10%-12%-14%

Source: STR. 2020 © CoStar Realty Information, Inc. 27

Forward Occupancy next 12 months

Forward Occupancy as at 6th July

Edinburgh

Dublin

Zurich

Amsterdam

Brussels

London

Madrid

Paris

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

July

August

September

October

November December

January

February

March

April

May

June

Source: STR. 2020 © CoStar Realty Information, Inc. 28

Positive pick up in next month, mixed thereafter

Pickup from previous month as at 6th July

Edinburgh

Dublin

Zurich

Amsterdam

Brussels

London

Madrid

Paris

6%

4%

2%

0%

-2%

-4%

-6%

-8%

-10%

-12%

-14%

July

August

September

October

November

December

January

February

March

April

May

Source: STR. 2020 © CoStar Realty Information, Inc. 29

Yes, there is short lead life to be seen!

Pickup for next 83 days as at July 6th

Edinburgh

Dublin

Zurich

Amsterdam

Brussels

London

Madrid

Paris

10%

8%

6%

4%

2%

0%

-2%

-4%

-6%

-8%

06-jul

13-jul

20-jul

27-jul

03-aug

10-aug

17-aug

24-aug

31-aug

07-sep

14-sep

21-sep

Source: STR. 2020 © CoStar Realty Information, Inc. 30

Conclusions

Source: STR. 2020 © CoStar Realty Information, Inc.

Our forecasts assume we salvage some summer… but be careful

Europe, monthly occupancy actuals, full inventory, 2019 vs 2020

2019

2020

2020 Forecast*

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

January

February

March

April

May

June

July

August

September

October

November December

Forecast data is an average of the European Forecast markets

Source: STR. 2020 © CoStar Realty Information, Inc. 32

Questions

Source: 2020 STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Realty Information, Inc.

Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR.

The information in the presentation should not be construed as investment, tax, accounting or legal advice.

Nordic Hotel Market Current State

Webinar 2020-07-15

Development since bottom (Nordic capitals)

Occupancy 7 days rolling average 13 Apr - 12 Jul 2020

  • Clear upward trend, helped by summer leisure travelers - Stockholm more flat than other capitals

Comparison year on year

Occupancy 7 days rolling average 13 Apr - 12 Jul 2020

  • Some markets close to last year's levels - Norway broadly, leisure capitals and Swedish leisure destinations

Recovery path (Sweden)

Occupancy 30 days rolling average 1 Jan - 12 Jul 2020

  • Sweden - Slow upward trends with a leisure "kick" in last couple of weeks

Leading the way (short term) - Leisure market (Kalmar)

Occupancy 7 days rolling average 1 Jan - 12 Jul 2020

  • Leisure destinations close to or in some exceeding 2019 levels - risk of backlash in virus spread?

Adjusting to a new reality (short term) - MICE market (Sigtuna)

Occupancy 7 days rolling average 1 Jan - 12 Jul 2020

  • MICE venues re-focusing on leisure segment and starting to see smaller meetings return (still 50 person limit)

Outlook 12 months forward

Occupancy On the Books Jul 2020 - Jun 2021

Stockholm

Oslo

Compared to July LY

Pickup last month

Helsingborg

Kalmar

  • Pickup short-term has improved, medium-term more passive - pickup even shorter than a month ago

Outlook OTB short-term (Helsingborg)

Occupancy On the Books per week Jul 2020 - Nov 2021

  • Pickup significant 1-4 weeks ahead

Current State Nordic Hotel Market

Summary

  • We see the start of a recovery - will it last?
    • Occupancy roughly on half the normal levels overall
  • Summer started at midsummer - at least in outdoor leisure destinations
    • Pickup extremely short - almost entirely leisure, no business and events
  • Some destinations suffer more from being cut of from the world
    • E g Stockholm
  • When will business travel and larger events return?
    • How large is the impact from adaptations to online meetings etc?

Attachments

  • Original document
  • Permalink

Disclaimer

Pandox AB published this content on 13 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 October 2020 12:54:10 UTC