ALBERTA ACCOMMODATION OUTLOOK 2017...2016 Jan-Feb 2017 Jan-Feb 2018 Jan-Feb Overall Alberta...
Transcript of ALBERTA ACCOMMODATION OUTLOOK 2017...2016 Jan-Feb 2017 Jan-Feb 2018 Jan-Feb Overall Alberta...
ALBERTA ACCOMMODATION OUTLOOK 2018ALBERTA HOTEL & LODGING ASSOCIATION
APRIL 17, 2018
AHLA | CBRE HOTELS’ OUTLOOK
PRESENTATION OUTLINE
National Western Canada Alberta Calgary &
EdmontonInvestment
TrendsKey
Takeaways Questions
NATIONAL ECONOMIC & TRAVEL OUTLOOKS
AHLA | CBRE HOTELS’ OUTLOOK
NATIONAL REAL GDP OUTLOOK 2018/19
$1.63
$1.66
$1.70
$1.74$1.76
$1.79
$1.84
$1.88
$1.91
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
$1.45
$1.50
$1.55
$1.60
$1.65
$1.70
$1.75
$1.80
$1.85
$1.90
$1.95
2011 2012 2013 2014 2015 2016 2017 2018p 2019p
% C
hangeRe
al G
DP
($ T
rilli
ons)
% Change
Source: Statistics Canada; Conference Board of Canada, Canadian Outlook Fall 2017; Scotiabank Group – Global Forecast Update January 2018; CIBC World Markets – Monthly FX Outlook, February 2018; RBC – Economic and Financial Market Outlook – 2017
Source: CBRE Hotels
AHLA | CBRE HOTELS’ OUTLOOK
NATIONAL TRAVEL OUTLOOK
KEEP YOUR TABLE WITHIN THE GUIDESOvernight Travel 2016E 2017F 2018P 2019P
Business travel domestic 1.3% 2.2% 1.4% 1.4%
Pleasure travel domestic 2.1% 3.1% 2.2% 2.0%
Total domestic travel 1.9% 2.7% 1.8% 1.7%
U.S. Travel 9.4% 4.0% 2.8% 2.3%
Overseas travel 13.6% 10.4% 6.4% 5.7%
Total Overnight Travel 3.7% 3.3% 2.2% 2.0%
National accommodation demand growth 1.3%* 4.1%* 2.4% —
Source: Canadian Tourism Research Institute, Conference Board of Canada, Fall 2017
*Actual results, Source: CBRE Hotels
NATIONAL SUPPLY & DEMAND OUTLOOKS
2018
AHLA | CBRE HOTELS’ OUTLOOK
NATIONAL SUPPLY & DEMAND OUTLOOK
National Occupancy
2016 Actual 64%
2017 Actual 66%
2018 Projection 66%
Source: CBRE Hotels
1.2% 1.1%
1.7%1.3%
4.1%
2.4%
2016 2017 2018p 2016 2017 2018p
Supply Demand
AHLA | CBRE HOTELS’ OUTLOOK
NATIONAL ADR, REVPAR & BOTTOM LINE OUTLOOK
ADR Growth2016 Actual 2.9%
2017 Actual 4.8%
2018 Forecast 4.0%
RevPAR Growth2016 Actual 3.0%
2017 Actual 8.0%
2018 Forecast 4.7%
Source: CBRE Hotels
$12.3 $14.3 $15.4
2016 2017 2018p
Adjusted Net Operating Income/ Available
Room ($000’s)
3.9%15.9%
8.2%
2015 ∆ 2016 ∆ 2017 ∆ 2018P ∆
Occupancy 64% — 64% 0 pts 66% 2 pts 66% 0 pts
ADR $144 — $148 2.9% $155 4.8% $161 4.0%
RevPAR $91 — $94 3.0% $102 8.0% $107 4.7%
WESTERN CANADA OUTLOOKS
AHLA | CBRE HOTELS’ OUTLOOK
WESTERN CANADA SUPPLY & DEMAND OUTLOOK
Western Canada Occupancy
2016 Actual 60%
2017 Actual 62%
2018 Projection 63%
Source: CBRE Hotels
Supply & Demand Growth
2.0% 1.7%1.0%
-1.5%
4.6%
2.4%
2016 2017 2018p 2016 2017 2018p
Supply Demand
AHLA | CBRE HOTELS’ OUTLOOK
CANADIAN NATIONAL AND REGIONAL MARKET OUTLOOKS
Region 2014 Actual 2015 Actual 2016 Actual 2017 Actual 2018 Forecast
Western Canada OccADR
RevPAR
65%$143$93
62%$148$92
60%$150$90
62%$155$96
63%$160$100
Central Canada OccADR
RevPAR
64%$134$87
66%$142$93
68%$149$101
70%$158$110
70%$165$115
Atlantic Canada OccADR
RevPAR
58%$123$72
59%$127$75
61%$129$79
63%$135$86
63%$140$88
National OccADR
RevPAR
64%$138$88
64%$144$91
64%$148$94
66%$155$102
66%$161$107
Source: CBRE Hotels
AHLA | CBRE HOTELS’ OUTLOOK
WESTERN CANADA ADR, REVPAR & BOTTOM LINE OUTLOOK
ADR Growth2016 Actual 1.3%
2017 Actual 3.2%
2018 Forecast 3.3%
RevPAR Growth2016 Actual (2.1%)
2017 Actual 6.1%
2018 Forecast 4.7%
Source: CBRE Hotels
$13.7 $15.0 $16.1
2016 2017 2018p
Adjusted Net Operating Income/ Available
Room ($000’s)
-7.2%
9.8%
7.1%
2015 ∆ 2016 ∆ 2017 ∆ 2018P ∆
Occupancy 62% — 60% -2 pts 62% 2 pts 63% 1 pt
ADR $148 — $150 1.3% $155 3.2% $160 3.3%
RevPAR $92 — $90 (2.1%) $96 6.1% $100 4.7%
ALBERTA ECONOMIC & TOURISM OUTLOOKS
AHLA | CBRE HOTELS’ OUTLOOK
ALBERTA TOURISM INDICATORS 2017
AIRPORT PASSENGER VOLUMES• Calgary (YYC) 3.8% • Edmonton (YEG) 5.0%
NATIONAL PARKS ATTENDANCE*• Banff 3.0% • Jasper -1.6% • Waterton Lakes 7.3%**
FOOD SERVICES & DRINKING PLACES RECEIPTS • 2.4%
HISTORIC SITES & MUSEUM VISITS• 3.8%
*Excludes Group Tours as per Parks Canada definition** Waterton Lakes National Park was closed to the public from September 8-20, 2017 due to a wildfire.Source: Alberta Tourism Market Monitor, Alberta Culture and Tourism
AHLA | CBRE HOTELS’ OUTLOOK
ALBERTA 2017-19 GDP GROWTH PROJECTIONS
2017Estimate
2018Forecast
2019 Forecast
ATB Financial 3.9% 2.8% 2.2%
Scotiabank Group 3.0% 2.8% 1.9%
RBC Economics 4.2% 2.2% 2.0%
Conference Board of Canada
6.7% 2.1% 1.6%
Source: ATB Financial – Alberta Economic Outlook – February 2018Scotiabank Group, Global Economics Forecast Tables, March 6, 2018RBC Economic and Financial Provincial Outlook – Alberta – March 2018Conference Board of Canada, Provincial Outlook Winter (February) 2018
AHLA | CBRE HOTELS’ OUTLOOK
2018-19F REAL GDP GROWTH BY PROVINCE
Source: Scotiabank Group, Global Forecast Update, March 6, 2018
0.5% 1.
0%
1.6% 1.
2%
1.2%
0.9% 1.0%
0.7%
2.1%
1.6%
2.3%
1.9% 2.
2%
1.8% 2.
2%
1.9%
2.8%
2.1% 2.
6%
2.0%
2018
f
2019
f
2018
f
2019
f
2018
f
2019
f
2018
f
2019
f
2018
f
2019
f
2018
f
2019
f
2018
f
2019
f
2018
f
2019
f
2018
f
2019
f
2018
f
2019
f
Real
GD
P
SK ABMBONQCNBNSPENL BC
National 2018f 2.4%2019f 1.9%
AHLA | CBRE HOTELS’ OUTLOOK
ALBERTA TRAVEL OUTLOOK
Overnight Travel2017
Estimate2018
Forecast2019
Forecast
Business Travel Overnight Domestic
2.6% 1.3% 1.3%
Pleasure Travel Overnight Domestic
3.9% 2.3% 1.9%
U.S. Overnight Travel 4.9% 3.3% 2.8%
Overseas Overnight Travel 9.1% 5.9% 5.3%
Total Overnight Travel 3.6% 2.3% 2.1%
Source: Canadian Tourism Research Institute, Conference Board of Canada, Fall 2017
AHLA | CBRE HOTELS’ OUTLOOK
KEY ECONOMIC/TOURISM FACTORS
Source: CBRE Hotels
Oil and Gas Capital Investment –
Oil Sands Conventional
Pipeline/Rail Capacity Issues
Low Natural Gas Prices
Business & Consumer Confidence Inconsistencies
Overnight Travel Growth Increases
AHLA | CBRE HOTELS’ OUTLOOK
1998-2018F
WEST TEXAS INTERMEDIATE CRUDE OIL PRICES & HOTEL OCCUPANCY
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$20
$40
$60
$80
$100
$120
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
F
Hot
el O
ccup
ancy
USD
$ p
er B
arre
l
Crude Oil Prices Alberta Hotel Occupancy
Source: U.S. Energy Information Administration & CBRE Hotels’ Trends in the Hotel Industry
AHLA | CBRE HOTELS’ OUTLOOK
1998-2018F
HENRY HUB NATURAL GAS PRICES & HOTEL OCCUPANCY
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$1019
98
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
F
Hot
el O
ccup
ancy
USD
$ p
er m
illio
n Bt
u
Natural Gas Prices Alberta Hotel Occupancy
Source: U.S. Energy Information Administration & CBRE Hotels’ Trends in the Hotel Industry
ALBERTA SUPPLY & DEMAND OUTLOOKS
2018
AHLA | CBRE HOTELS’ OUTLOOK
ALBERTA TOP LINE 2017 PERFORMANCE
49% Occ$124 ADR
$61 RevPAR
43% Occ$115 ADR
$50 RevPAR
57% Occ$130 ADR
$74 RevPAR
59% Occ$143 ADR
$85 RevPAR
51% Occ$110 ADR
$57 RevPAR
42% Occ$106 ADR
$45 RevPAR67% Occ$273 ADR
$182 RevPAR
Edmonton
Red Deer
Calgary
Lethbridge
Alberta Resorts
Other Alberta North*
Other Alberta South**
Note:*Properties in Communities located On or North of Highway 16**Properties in Communities located South of Highway 16
AHLA | CBRE HOTELS’ OUTLOOK
ALBERTA HISTORIC “TOP LINE” RESULTS COMPARISON(YTD FEBRUARY)
2016 Jan-Feb 2017 Jan-Feb 2018 Jan-Feb
Overall Alberta (excl.resorts)
OccADR
RevPAR
45%$131$59
45%$127$57
47%$126$59
Red Deer OccADR
RevPAR
36%$111$40
36%$105$38
36%$108$40
Lethbridge OccADR
RevPAR
42%$109$46
40%$109$43
42%$111$47
Alberta Resorts
OccADR
RevPAR
48%$189$91
48%$199$96
49%$210$103
Other Alberta
OccADR
RevPAR
36%$127$46
40%$119$48
44%$121$54
Source: CBRE Hotels
AHLA | CBRE HOTELS’ OUTLOOK
ACCOMMODATION SUPPLY
Source: CBRE Hotels
2,000 new rooms in 2018
Majority in Calgary/ Edmonton
Modular Construction
Developers still looking
Project Financing?
25 CBRE HOTELS | 2017/2018 OUTLOOK
5% 5% 3%
2% 2% 1%
-3% 4% 3%-12% 8% 2%
-2,000,000
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
2016 2017 2018P 2016 2017 2018P
Room Nights
SupplyDem…
Calgary/Edmonton Combined Other Alberta
Demand
ALBERTA SUPPLY & DEMAND OUTLOOK
Source: CBRE Hotels
Supply/Available Room Nights
AHLA | CBRE HOTELS’ OUTLOOK
“OTHER ALBERTA” MARKET – DUAL IMPACTS OF ECONOMIC DOWNTURN AND NEW SUPPLY (2014 TO 2018)
5%
-25%
6%
-19%
7%
-17%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%Supply Growth Demand Growth
“Other AB” MarketSupply vs. Demand Growth
2014-2016 2014-2017 2014-2018
67%
56%
48%51% 52%
40%
45%
50%
55%
60%
65%
70%
2014 2015 2016 2017 2018F
“Other AB” Market Occupancy
Market Occupancy
Supply in Other Alberta (outside Calgary and Edmonton) increasing by 7% for 2014-2018
Demand dropping 17% over the same period (2014-2018)
The impact on market occupancy is a 15 point decline, from 67% in 2014 to 52% for 2018 for the “Other Alberta” market.
PROVINCIAL FORECAST
AHLA | CBRE HOTELS’ OUTLOOK
ALBERTA “TOP LINE” 2018 FORECAST
$132 $1
38 $143
$141
$131
$130
$131
$87
$94
$97
$83
$68 $7
0
$71
66%68%
68%
59%
52% 54% 54%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$20
$40
$60
$80
$100
$120
$140
$160
2012 2013 2014 2015 2016 2017 2018P
ADR RevPAR Occupancy
Source: CBRE Hotels
AHLA | CBRE HOTELS’ OUTLOOK
ALBERTA FINANCIAL FORECAST
$16.7
$18.7$20.3
$15.7
$10.2 $10.2 $10.3$9.1 $9.6
$10.8$11.8
$12.3
$14.3$15.4
$6
$8
$10
$12
$14
$16
$18
$20
$22
$24
2012 2013 2014 2015 2016 2017 2018P
Adj
uste
d N
et O
pera
ting
Inco
me
Per
Ava
ilabl
e Ro
om (
$000
’s)
AB NATIONAL
NOTE: Adjusted Net Operating Income is defined as income after property taxes, insurance, management fees, franchise fees, and capital reserves; but before rent, interest, income taxes, depreciation and amortization. Source: CBRE Hotels
AHLA | CBRE HOTELS’ OUTLOOK
HISTORIC EXPENSE RATIOS – ALBERTA FULL SERVICEYEAR 2016
Departmental Expenses $ Per Available Room % of Dept RevenueRooms $8,032 29.0%
Food & Beverage $11,063 71.1%
Other Operated Departments* $1,310 62.5%
Total Departmental Expenses $20,406 44.1%
Undistributed Expenses $ Per Available Room % of Total Revenue
Administration & General $3,597 7.8%
Information & Telecommunications Systems
$873 1.9%
Sales & Marketing $2,904 6.3%
Property Op. & Maintenance $2,224 4.8%
Utilities $1,846 4.0%
Property and Other Taxes $1,739 3.8%
Insurance $283 0.6%
Total Undistributed Expenses $13,466 29.2%
Source: CBRE Hotels
AHLA | CBRE HOTELS’ OUTLOOK
HISTORIC EXPENSE RATIOS – ALBERTA LIMITED SERVICEYEAR 2016
Departmental Expenses $ Per Available Room % of Dept RevenueRooms $5,251 24.4%
Other Operated Departments* $97 51.6%
Total Departmental Expenses $5,349 23.9%
Undistributed Expenses $ Per Available Room % of Total Revenue
Administration & General $2,159 9.6%
Information & Telecommunications Systems
$193 0.9%
Sales & Marketing $1,032 4.6%
Property Op. & Maintenance $1,667 7.4%
Utilities $1,017 4.5%
Property and Other Taxes $1,388 6.2%
Insurance $90 0.4%
Total Undistributed Expenses $7,547 33.6%
Source: CBRE Hotels
AHLA | CBRE HOTELS’ OUTLOOK
FINANCIAL CONCERNS
Source: CBRE Hotels
Departmental expenses up in 2016 and 2017
Labour shortages in many markets
Legislative changes in benefit requirements affect labour costs
Energy price increases (fuel, hydro)
Assessments – time to appeal?
Hotel brands increasing costs for program participation
Higher vacancy rates of “other” rental spaces
CALGARY & EDMONTON MARKET OUTLOOKS
AHLA | CBRE HOTELS’ OUTLOOK
CALGARY ECONOMIC OUTLOOK
2014 2015 2016 2017F
GDP Growth (%) 5.2 -3.1 -1.7 1.8
Employment (% Change) 2.5 2.1 -2.0 1.4
Unemployment Rate (%) 5.0 6.4 9.1 9.4
Housing Starts (annual, 000’s of units)
17 13 9 9
Source: Conference Board of Canada – Metropolitan Outlook Winter 2018
2015 2016 2017 2018 Forecast
GDP Growth (%) (3.2) (3.7) 6.9 2.5
Employment (% Change) 2.0 (1.5) 3.4 2.0
Unemployment Rate (%) 6.4 9.4 8.7 8.2
Housing Starts (annual, 000’s of units) 13 9 11 11
AHLA | CBRE HOTELS’ OUTLOOK
CALGARY – PERFORMANCE INDICATORS
KEY POINTS FOR 2018
Source: CBRE Hotels
Supply growth slightly ahead of demand growth in 2018
ADR declines to continue, impacting RevPAR and Bottom Line
Downtown hotels suffering ADR drop, lower F&B demand and revenue
GDP growth projected for Calgary – concerns about spending in certain sectors
International travel has positive impact on spending in Calgary
Air passenger volumes continue to increase
AHLA | CBRE HOTELS’ OUTLOOK
CALGARY TOP LINE 2017 PERFORMANCE BY SUB-MARKET
64% Occ$113 ADR
$73 RevPAR
53% Occ$127 ADR
$68 RevPAR
59% Occ$119 ADR
$70 RevPAR
62% Occ$189 ADR
$117 RevPAR
Airport / NE
Downtown / Beltline
Northwest / Motel Village
South / Macleod Trail
AHLA | CBRE HOTELS’ OUTLOOK
CALGARY ACCOMMODATION MARKET PERFORMANCE
$156 $1
62 $167
$158
$145
$143 $1
45
$110 $1
18
$117
$102
$85
$85
$86
71%73%
70%
64%
59% 59% 59%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$60
$70
$80
$90
$100
$110
$120
$130
$140
$150
$160
$170
$180
2012 2013 2014 2015 2016 2017 2018P
ADR RevPAR Occupancy
Source: CBRE Hotels
AHLA | CBRE HOTELS’ OUTLOOK
CALGARY – DUAL IMPACTS OF ECONOMIC DOWNTURN AND NEW SUPPLY (2014 TO 2018)
9%
-9%
15%
-3%
20%
1%
-10%
-5%
0%
5%
10%
15%
20%
25%Supply Growth Demand Growth
Calgary Accommodation Market Supply vs. Demand Growth
2014-2016 2014-2017 2014-2018
Supply in Calgary increasing by 20% from 2014 to 2018
Over the same 2014 to 2018 period, demand to improve by only net 1%
As a result, market occupancy dropping from 70% in 2014 to forecast 59% in 2018 (11 points)
70%
64%
59% 59% 59%
50%
55%
60%
65%
70%
75%
2014 2015 2016 2017 2018F
Calgary Market Occupancy
Market Occupancy
AHLA | CBRE HOTELS’ OUTLOOK
EDMONTON ECONOMIC OUTLOOK
2014 2015 2016 2017F
GDPGrowth (%) 4.9 -3.2 -1.7 2.1
Employment (% Change) 2.3 2.4 0.2 0.1
Unemployment Rate (%) 5.2 5.9 7.1 7.5
Housing Starts (annual, 000’s of units) 14 17 10 9
Source: Conference Board of Canada – Metropolitan Outlook Winter 2018
2015 2016 2017 2018 Forecast
GDP Growth (%) (3.2) (3.4) 3.9 2.2
Employment (% Change) 2.4 0.0 0.4 1.2
Unemployment Rate (%) 5.9 7.3 8.2 7.4
Housing Starts (annual, 000’s of units) 17 10 12 11
2015 2016 2017 2018 Forecast
GDP Growth (%) (3.2) (3.6) 5.2 2.2
Employment (% Change) 2.2 0.0 0.2 1.0
Unemployment Rate (%) 5.9 7.3 8.3 8.1
Housing Starts (annual, 000’s of units) 17 10 12 11
AHLA | CBRE HOTELS’ OUTLOOK
EDMONTON – PERFORMANCE INDICATORS
KEY POINTS FOR 2018
Source: CBRE Hotels
Supply and demand to grow at roughly same pace in 2018
Operators must be diligent on ADR – YTD Feb 2018 is down
Major infrastructure projection in Alberta’s Industrial Heartland to have positive impact on Edmonton economy
Key events including Cities and Climate Change Conference, Smart Airports and Regions Conference, Grey Cup
Royal Alberta Museum to open
AHLA | CBRE HOTELS’ OUTLOOK
EDMONTON TOP LINE 2017 PERFORMANCE BY SUB-MARKET
54% Occ$124 ADR
$67 RevPAR
63% Occ$154 ADR
$98 RevPAR
56% Occ$114 ADR
$64 RevPAR
Downtown
South /Ellerslie/Airport
West
AHLA | CBRE HOTELS’ OUTLOOK
EDMONTON ACCOMMODATION MARKET PERFORMANCE
Source: CBRE Hotels
$122 $1
27
$134 $1
36
$130
$130 $1
33
$81
$89 $9
3
$86
$77
$74 $7
6
67%70% 69%
63%59%
57% 57%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$60
$70
$80
$90
$100
$110
$120
$130
$140
$150
2012 2013 2014 2015 2016 2017 2018P
ADR RevPAR Occupancy
AHLA | CBRE HOTELS’ OUTLOOK
EDMONTON – DUAL IMPACTS OF ECONOMIC DOWNTURN AND NEW SUPPLY (2014 TO 2018)
69%
63%
59%
57% 57%
50%
55%
60%
65%
70%
75%
2014 2015 2016 2017 2018F
Edmonton Market Occupancy
Market Occupancy
7%
-8%
13%
-7%
16%
-4%
-10%
-5%
0%
5%
10%
15%
20%Supply Growth Demand Growth
Edmonton Accommodation Market Supply vs. Demand Growth
2014-2016 2014-2017 2014-2018
Edmonton supply will grow by 16% over the 2014 – 2018 period
Room Demand will decline by net 4% over the 2014 – 2018 period
The impact on market occupancy over the 4-year period is a projected 12 point decline, from 69% in 2014 to 57% in 2017 and 2018
AHLA | CBRE HOTELS’ OUTLOOK
MAJOR MARKET OUTLOOKS REVPAR PROJECTION - 2018
*”Major Markets” refer to Greater Metro AreasSource: CBRE Hotels
-6%-4%-2%0%2%4%6%8%
10%
Vanc
ouve
r
Toro
nto
Nia
gara
Fal
ls
Mon
trea
l
Win
nipe
g
Que
bec
City
Regi
na
Edm
onto
n
Hal
ifax
Otta
wa
Cal
gary
Sask
atoo
n
St. J
ohn'
s
> 4% RevPar Growth
0%-3% RevPar Growth RevPARDecline
2018 RevPAR Ranking
Vancouver $161
Toronto $138
Montreal $136
Ottawa $130
Quebec City $117
Niagara Falls $114
Halifax $109
Winnipeg $92
St. John’s $87
Calgary $86
Edmonton $76
Saskatoon $75
Regina $70
INVESTMENT TRENDS
AHLA | CBRE HOTELS’ OUTLOOK
ALBERTA TRANSACTION OVERVIEW
Canada 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total Transactions 96 74 89 102 103 131 136 135 252 163
Volume ($Millions) $1,090 $410 $730 $1,200 $1,090 $2,110 $1,400 $2,300 $4,100 $3,400
Alberta 2008 2009 2010 2011 2012 2013 2014 2015 2016* 2017**
Total Transactions
22 10 11 16 25 28 27 15 14 15
Volume ($Millions)
$344 $77 $111 $167 $335 $501 $293 $265 $110 $190
% Volume of Total
32% 19% 15% 14% 31% 24% 21% 12% 6% 8%
* Year 2016 Totals EXCLUDE assets that were within “Entity Level” transactions for which individual property acquisition prices were not disclosed. Specifically, the acquisition of the InnVest REIT portfolio and the acquisition of Coast Hotels & Resorts. ** Year 2017 Excludes M&A transactionsSource: CBRE
AHLA | CBRE HOTELS’ OUTLOOK
Q4 2017 CAP RATE SURVEY
Q4 2017 HOTEL CAP RATES
National Calgary EdmontonDowntown Full
Service7.28% 7.00%-8.75% 7.25%-8.75%
Suburban Limited Service
8.36% 8.00%-9.25% 8.50%-9.50%
Focused Service 8.05% 7.50%-9.25% 8.00%-9.50%
Source: CBRE Hotels
KEY TAKEAWAYS
20162017
2018P
-34.8%-0.2%
0.9%
$10.
2$1
0.2$1
0.3
ALBERTA TOP & BOTTOM LINE OUTLOOK
OCC
ADR
REVPAR
Adjusted NetOperating Income/
Available Room($000’s)
$68$83
$70 $71
$131$130$141
$131
59%
52%
54% 54%
2015 2016 2017 2018P
AHLA | CBRE HOTELS’ OUTLOOK
KEY TAKEAWAYS
Top line performance results in many areas of the Province improved in 2017 and will continue to so in 2018
Weakness to continue in oil sands related markets due to lack of capital spending
We need to grow ADR!!!
Alberta Resorts market will continue to grow ADR
Room construction continues despite economic conditions
Bottom lines only slightly improved in 2018
Growth on the horizon in many markets. Adjustments required to thrive under “New Normal” operating conditions
Valuation & Advisory ServicesBrokerageDavid LaroneBrian StanfordFran HoholErin O’BrienDavid Ferguson
Rebecca GodfreyKirstin HallettNicole NguyenCarol Lopes
Bill StoneGreg KwongDeborah BorotsikScott DuffMichael BeckleySylvia OcchiuzziKarina SaksAshley Kerr
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