library rushmore

Slide1: 

Recent Economic and Value Trends for the U.S. Lodging Industry Presented by: Stephen Rushmore, MAI, CHA President and Founder HVS International 516-248-8828 ext. 204 srushmore@hvsinternational.com www.hvsinternational.com

Slide2: 

Hotel Value Trends - USA

Value Per Room - 2002: 

Value Per Room - 2002 1. New York $223,000 2. Las Vegas $187,000 3. Oahu $174,000 4. San Diego $133,000 5. San Francisco $132,000 6. San Antonio $122,000 7. New Orleans $120,000 8. Long Island $103,000 9. Sacramento $ 96,000 10. Boston $ 96,000 Source: HVS International 21. United States $ 58,000

Change in Value Per Room : 

1. New York ($159,000) 2. San Francisco ($113,000) 3. Boston ($ 87,000) 4. San Jose ($ 82,000) 5. Chicago ($ 46,000) 6. Oahu ($ 41,000) 7. Oakland ($ 34,000) 8. Austin ($ 32,000) 9. Orlando ($ 32,000) Dallas ($ 28,000) 1. San Jose ($62,000) 2. San Francisco ($62,000) 3. Oakland ($40,000) 4. Boston ($33,000) 5. Long Island ($30,000) 6. Austin ($21,000) 7. Chicago ($18,000) 8. Miami ($13,000) 9. Houston ($13,000) 10. New York ($13,000) Change in Value Per Room 2001 2002 Source: HVS International 18. United States ($ 18,000) 31. United States ($ 3,000)

Change in Value Per Room : 

37. Memphis ($5,033) 38. Anaheim ($4,619) 39. Jacksonville ($3,951) 40. Albuquerque ($2,659) 41. San Antonio ($1,942) 42. Tampa ($1,566) 43. Las Vegas ($1,390) 44. Sacramento ($1,240) 45. Salt Lake City ($ 642) 46. Houston $6,838 Change in Value Per Room 2002 Source: HVS International 2001 37. Orlando $ 1,403 38. Jacksonville $ 1,666 39. San Diego $ 2,015 40. Sacramento $ 2,147 41. Philadelphia $ 7,544 42. Las Vegas $ 8,478 43. Baltimore $10,407 44. Oahu $11,119 45. San Antonio $19,506 46. Salt Lake City $34,292

Change In Value Per Room – 2001 & 2002: 

1. San Francisco ($175,000) 2. New York ($172,000) 3. San Jose ($144,000) 4. Boston ($120,000) 5. Oakland ($ 74,000) 6. Chicago ($ 64,000) 7. Austin ($ 52,000) 8. Long Island ($ 47,000) 9. Dallas ($ 39,000) Miami ($ 34,000) 24. United States ($ 21,000) 37. Houston ($ 6,000) 38. St. Louis ($ 5,000) 39. Memphis ($ 4,000) 40. Albuquerque ($ 3,000) 41. Jacksonville ($ 2,000) 42. Baltimore ($ 500) 43. Sacramento $ 1,000 44. Las Vegas $ 7,000 45. San Antonio $ 18,000 46. Salt Lake City $ 34,000 Change In Value Per Room – 2001 & 2002 Source: HVS International

Slide7: 

1988 1989 1990 1991 26 17 34 32 1992 1993 1994 1995 11 13 6 3 1996 1997 1998 1999 11 4 22 26 2000 2001 2002 2003 10 45 32 16 Number of Markets With Decline in Value Based on 47 Markets

Comparison of Per Room Change in Two Downturn Markets : 

1. New York ($99,840) 2. Long Island ($38,888) 3. Boston ($33,261) 4. Los Angeles ($28,565) 5. Washington,DC ($24,385) 6. Las Vegas ($20,210) 7. Baltimore ($17,703) 8. San Jose ($17,338) 9. San Diego ($16,798) 10. Oahu ($16,323) 14. USA ($12,840) Comparison of Per Room Change in Two Downturn Markets Per Room 2000-2002 Source: HVS International Per Room 1989-1991 1. San Francisco ($175,425) 2. New York ($172,097) 3. San Jose ($144,206) 4. Boston ($120,361) 5. Oakland ($ 73,692) 6. Chicago ($ 64,358) 7. Austin ($ 52,454) 8. Long Island ($ 47,018) 9. Dallas ($ 39,272) 10. Miami ($ 33,952) 14. USA ($ 21,240)

Comparison of Per Room Change in Two Downturn Markets : 

37 Salt Lake City $ 4,352 38. Dallas $ 4,906 39. Albuquerque $ 5,503 40. Portland $ 5,767 41. San Antonio $ 7,308 42. Minneapolis $ 7,869 43. Denver $10,026 44. New Orleans $11,339 45. Austin $15,883 46. Houston $16,244 Comparison of Per Room Change in Two Downturn Markets Per Room 2000-2002 Source: HVS International Per Room 1989-1991 Houston ($ 5,975) 38. St. Louis ($ 5,263) 39. Memphis ($ 3,866) 40. Albuquerque ($ 2,895) 41. Jacksonville ($ 2,285) 42. Baltimore ($ 442) 43. Sacramento $ 901 44. Las Vegas $ 7,088 45. San Antonio $ 17,564 46. Salt Lake City $ 33,650

Change in Value Per Room – 2002 - 2006: 

1. New York $149,000 2. Oahu $140,000 3. San Francisco $109,000 4. San Diego $ 90,000 5. Las Vegas $ 86,000 6. Washington, DC $ 69,000 7. San Antonio $ 68,000 8. Long Island $ 64,000 9. Miami $ 62,000 San Jose $ 58,000 18. United States $ 38,000 37. Denver $18,000 38. Oakland $15,000 39. Ft. Lauderdale $13,000 40. Charlotte $11,000 41. Cincinnati $ 8,000 42. Salt Lake City $ 6,999 43. Austin $ 4,000 44. Dallas $ 4,000 45. Cleveland $ 4,000 46. Detroit $ 3,000 Change in Value Per Room – 2002 - 2006 Source: HVS International

Percent Change in Value 2002 - 2006: 

1. Pittsburgh 226% 2. Nashville 180% 3. Chicago 179% 4. Portland 165% 5. Albuquerque 158% 6. Kansas City 130% 7. Cincinnati 117% 8. Minneapolis 104% 9. Los Angeles 86% Indianapolis 85% 25. United States 65% 37. Sacramento 42% 38. New Orleans 40% 39. Boston 37% 40. Ft. Lauderdale 30% 41. Oakland 25% 42. Dallas 24% 43. Cleveland 21% 44. Detroit 13% 45. Salt Lake City 8% 46. Austin 7% Percent Change in Value 2002 - 2006 Source: HVS International

Number of Years for Values to Recover to 2000 Levels : 

1. Las Vegas 2 2. San Antonio 2 3. Sacramento 2 4. Salt Lake City 2 5. San Diego 3 6. Baltimore 3 7. Jacksonville 3 8. Oahu 4 9. St. Louis 4 10. Memphis 4 16. United States 5 Number of Years for Values to Recover to 2000 Levels Source: HVS International 30. New York 7+ 31. San Francisco 7+ 32. Boston 7+ 33. San Jose 7+ 34. Austin 7+ 35. Oakland 7+ 36. Ft. Lauderdale 7+ 37. Denver 7+ 38. Atlanta 7+ 39. Cleveland 7+ 40. Chicago 7+ 41. Dallas 7+ 42. Charlotte 7+ 43. Detroit 7+ 44. Cincinnati 7+

Slide13: 

Replacement Costs vs. Value per Room Luxury Market Segment 0 50,000 100,000 150,000 200,000 250,000 300,000 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Luxury Replacement Cost

Slide14: 

Replacement Costs vs. Value per Room Upscale Market Segment 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Upscale Replacement Cost

Slide15: 

Replacement Costs vs. Value per Room Midprice Market Segment 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Midprice Replacement Cost

Slide16: 

Replacement Costs vs. Value per Room Economy Market Segment 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Economy Replacement Cost

Slide17: 

Source: Smith Travel Research 1975 64% 1976 66% 8.2% 5.7% 1.44 1977 67% 8.1% 6.5% 1.25 1978 70% 14.0% 7.7% 1.82 1979 72% 17.0% 11.3% 1.50 % Change % Change AR/CPI Year Occupancy Av Rate CPI Index 1993 63% 1994 65% 3.8% 2.6% 1.46 1995 65% 4.8% 2.8% 1.71 1996 65% 6.5% 3.0% 2.17 1997 64% 5.9% 2.3% 2.57 1998 64% 4.6% 1.6% 2.88

Ten Largest Sales by Price per Room in 2002: 

Ten Largest Sales by Price per Room in 2002 Montage Resort & Spa Laguna Beach, CA 260 $730,000 Laguna Beach Resorts Monarch Hotel Washington, DC 416 $353,000 Legacy Hotel REIT Box Tree Inn New York, NY 13 $307,000 252 East 49 (LLC) Eden Roc Miami Beach, FL 347 $277,000 Blackacre Capital Hotel Wales New York, NY 87 $276,000 DLJ Capital RECP II Hyatt Regency Lahaina, HI 837 $275,000 Blackstone Group The Orchid at Mauna Lani Kahola Coast, HI 539 $260,000 Fairmont Hotels&Resorts La Costa Resort & Spa Carlsbad, CA 479 $251,000 KSL Recreation Corp. British Airways Hotel New York, NY 124 $250,000 Affiliate Hotel Properties Holiday Inn on the Hill Washington, DC 343 $233,000 LaSalle Hotel Properties Source: HVS International # of Price Individual Hotel Location Rooms per Room Buyer

Rushmore’s Observations: 

Rushmore’s Observations It should not get any worse than this. When occupancy starts to recover look for- Transaction volume will rise rapidly Now is the time to position yourself for a strong recovery Economy should recover War is wrapping up Supply growth is slowing Escalating profits Increased property level spending Particularly FF&E Rapid growth in room rate Transactions equate to renovations