Bennjin Lao For STR, Inc. Presentation On Buncombe County Lodging, February 2019

Hospitality Outlook
Asheville, NC
Bennjin Lao
Business Development Executive, Hotels
STR
blao@str.com
© 2019 STR, Inc. All Rights Reserved.
Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR
(collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR.
No strategic advice or marketing recommendation is intended or implied.
1
Agenda:
1. United States Industry overview
2. Local Market update
3. Comparable Markets
4. Forecast

No strategic advice or marketing recommendation is intended or implied. 2
Total US - Key Statistics
% Change
• Hotels 54.5 k
• Room Supply 1.90 bn 2.0%
• Room Demand 1.26 bn 2.5%
• Occupancy 66.2% 0.5%
• ADR $129.83 2.4%
• RevPAR $85.96 2.9%
• Room Revenue $163 bn 5.0%
Twelve Month Moving Average, December 2018
© 2019 STR. All Rights Reserved. 3

Total United States: Occupancy
70
66.2
65 June ’06
63.6
60
55
Jan/Feb ’10
54.5
50
2001 2003 2005 2007 2009 2011 2013 2015 2017
Absolute Occupancy, Twelve Month Moving Average – 2000 to December 2018

Total United States: Average Daily Rate
135
125
129.83
Sept ’08
115 107.70
105
95 June ’01
85.75
85
75
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Absolute ADR, Twelve Month Moving Average – 2000 to December 2018

Demand Growth Trajectory Slows. Supply Growth Still At 2%
8 7.8
4 2.5
2.0
0
-0.7
-4
Supply % Change -4.7
Demand % Change
-7.1
-8
1990 2000 2010
Total U.S., Supply & Demand % Change, 12 MMA 1/1990 – 12/2018
Occupancy Growth Will Be Tepid Going Forward
7.5
6.8
5
2.4
0 0.5
-3.4
-5 Occ % Change
ADR % Change -6.7
-10 -9.7
1990 2000 2010
Total U.S., ADR & OCC % Change, 12 MMA 1/1990 – 12/2018 © 2019 STR. All Rights Reserved. 7
RevPAR Growth: Positive in 105 out of 106 last months
15
111 Months 56 Months 105 Months

-5
-15
-25
1990 2000 2010
Total U.S., RevPAR % Change, 1/1990 – 12/2018

Chain Scales, Total United States
Occupancy / ADR Percent Change
4 3.7
Occupancy ADR
3
2.1 2.1
1.9 1.9
2 1.5
1.0
1 0.7
0.3
0
-0.1
-0.3 -0.4
-1
Luxury Upper Upscale Upper Midscale Economy
Upscale Midscale
Total U.S., Occupancy / ADR % Change, by Chain Scale, Twelve Month Moving Average December 2018
Total United States
Under Contract Pipeline by Chain Scale – In Thousands, December 2018
In Construction
84.5 Final Planning

52.5
Planning
67.1
64.4
53.1
14.2 39.1
2.5 20.4
60.4 56.8 17.8 12.5 13.7
4.7
24.3 0.7
11.1 15.9 3.7 19.6
Luxury Upper Upscale Upper Midscale Economy Unaffiliated

Upscale Midscale
Agenda:
4. Forecast

Buncombe Co. Hotel Census, As of December 2018
Properties (78)
20 22
13 10
6 7
Luxury Upper Upscale Upper Midscale Economy Independent
Upscale Midscale
Rooms (7,801)
1,705 2,034
1,262 1,332
599 869
Luxury Upper Upscale Upper Midscale Economy Independent

Upscale Midscale
Development Activity
• 22 properties in the active pipeline
– Either in construction or planning stages
– Approx. 505 rooms slated for 2019 (~ 6% of current stock)
Glo Hotel – Best Western
Hotel Arras
Element by Westin
Hampton Inn Black Mountain
Fairfield Inn & Suites Weaverville
TownePlace Suites by Marriott
The Parisian
LaQuinta Inn & Suites

Buncombe County Performance Snapshot: Growth Improvement from 2017
across all KPIs
12
Occupancy ADR RevPAR
10 9.1
7.9
8
6
4 2.8
2.5 2.5
2 1.1 1.5
0
-0.3
-2 2016
-1.0
2017 2018
Key Performance Indicators, Twelve Month Moving Average % change, December 2016-2018
Buncombe County Hotel Class Segments
Occupancy/ADR/RevPAR Percent Change

6.3
5.2
2.0 1.8
1.0 1.2
0.6
-0.2
-2.1
Lux/Upper Up Upscale/Upper Mid Midscale/Econ

Key Performance Indicators, Twelve Month Moving Average % Change, 2018 vs. 2017
Buncombe County Performance Snapshot
Key Performance Indicators
Twelve Month Moving Average December 2018 vs. 2017
2.8
- 78 Hotels 2.5
- 7,801 Rooms
- 92% Rooms Sampled $158.42
$115.21
72.7%
-0.3

Buncombe County
Room Nights Available
Twelve Month Moving Average 2004-2018
Supply
Growth
3,000,000 +6.0%
2,800,000
2,600,000
2,400,000
2,200,000
2,000,000
2004 2006 2008 2010 2012 2014 2016 2018

Buncombe County
Room Nights Available & Demand
Twelve Month Moving Average 2004-2018
3,000,000
Supply Demand
2,500,000
Demand
+5.7%
2,000,000
Prior Peak:
Mar 2007
1,500,000 1.45m
1,000,000

Buncombe County
Occupancy Rate by Month
2018 vs. 2017
2018 2017
82.8 83.6 83.4 83.0
80.8 81.8 80.2 78.1 78.3 79.7
73.6 74.3 75.1 75.6 75.7 74.2
71.4
69.5 68.7 68.9
57.3
54.8
46.6 46.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Buncombe County, Occupancy Rate by Month, 2018 vs. 2017

Buncombe County
Average Daily Rate (ADR) by Month
2018 vs. 2017
2018 2017
192
176 188 172 170
162 162163 163 164 164 169
154 156 156
147144 150
132
121
112 126
111 118
Buncombe County, Average Daily Rate (ADR) by Month, 2018 vs. 2017

Buncombe County
Occupancy & Average Daily Rate % Change by Month, 2018
8 6.9
7 Occupancy ADR
6 5.2
5 4.3 3.8 4.1
4 2.9 2.6
3 2.4 2.6 2.2 2.0
2 1.3 1.7
1 0.20.6 0.4 0.5
0
-1 -0.6
-2 -1.0 -0.7
-3 -2.1 -1.7
-4 -3.4
-5 -4.3
Buncombe County, Occupancy & Average Daily Rate (ADR), % Change by Month, 2018

Buncombe County
Day of Week Occupancy
Annual 2015 - 2018
Sunday Monday Tuesday Wednesday
Thursday Friday Saturday
86.9 88.1
86.5
86.0
83.3 84.7 82.6
82.5
74.6 74.1 75.1
73.2 72.5
71.6 72.4 72.1
7… 70.9 70.5 69.7
66.6 65.9 65.5 65.0
57.3 58.7
58.4 59.3
2015 2016 2017 2018

STR and AirDNA Definitions
STR Room Demand – The number of hotel rooms sold in a

specified time period (excluding complimentary rooms) as
tracked by STR.
Hotel Comparable – Studio and one bedroom entire place

rentals. AirDNA believes these are the type of listings most
likely to compete directly with hotels.
Other Types – AirDNA entire place room nights less hotel

comparable room nights. This would include 2+ bedroom
rentals.

Buncombe County
Room Nights Supply – Airdna & STR, Monthly 2016 - 2018
480,000 Hotel Comparable Other Types STR - Hotel Total
400,000
320,000
58%
240,000
160,000 89%
34%
80,000 8%
8%
3%
%
0
2016 2017 2018
Source: Airdna & STR © 2019 STR. All Rights Reserved. 24
Buncombe County
Room Nights Demand – Airdna & STR, Monthly 2016 - 2018
240,000 Hotel Comparable STR - Hotel Total
180,000
90%
120,000
98
%
60,000 10%
2%
0
2016 2017 2018
Source: Airdna & STR
Airdna Hotel Comparable Room Nights Booked
Monthly - 2018
27,098
23,150
21,75022,544
19,590 18,65919433
17,977
15,82516,365
9,650 9,726
34
0
Source: Airdna
Airdna Hotel Comparable Rooms vs. STR Occupancy
Monthly - 2018
Airdna STR
82.8 81.8 80.2 83.4
78.3 75.7
73.6 75.1
69.5 67.8 67.1 68.9
54.8 62.8 61.5 6…
55.5 55.0 5… 56.1 55.6
46.6
39.0 41.4

Airdna Hotel Comparable vs. STR, Absolute ADR
Monthly - 2018
Airdna STR
$192
$176 $172 $170
$162 $162 $163
$147 $154
$121 $132
$117 $121 $126 $127 $128 $120 $127 $129 $131 $122
$112 $120 $118
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Airdna Hotel Comparable vs. STR ADR % Change
Monthly vs. Last Year - 2018
Airdna STR 6.9

5.2
4.0 4.3 3.93.8 4.1
2.9 2.4 2.4 2.8
1.6 1.7 2.4 2.2
0.6 0.5
-0.6 -0.3
-1.3
-3.0 -3.4
-4.2
-5.8
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Agenda:
4. Forecast

Comparable Markets:
Buncombe with highest Supply Growth
2016 2017 2018
6
5.0 4.7 4.9
4.5
4.1
3.3
2.6
2.2 2
1.7 1.9 1.5
-0.9
-1.3
Buncombe Savannah Charleston Greenville Chattanooga
Supply % Change, Total Year 2016 - 2018

Comparable Markets Pipeline: Austin CBD led 2018 growth
Market/Submarket 2016 % Growth 2018 % Growth 2020
Charleston, SC 19,428 7.1% 20,814 10.4% 22,971
Savannah, GA 15, 329 5.7% 16,199 8.5% 17,569
Austin CBD, TX 8,899 21.5% 10,810 17.9% 12,743
Buncombe County, NC 7,230 7.9% 7,801 7.8% 8,410
Cary/South Raleigh, NC 5,012 10.0% 5,514 4.2% 5,745
Brentwood/Franklin, TN 5,019 6.8% 5,360 10.8% 5,940
Mount Pleasant/Isle Of Palms, SC 3,155 15.7% 3,649 20.7% 4,405

Historic / Current / New ( w/ Under Construction) Supply: 2016 - 2020
Submarket Supply % Change
18.0
17.0
16.0
15.0
14.0
13.0 Asheville
12.0
11.0 5.8%
10.0
9.0 589 of 643
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
-5.0
-6.0
All United States Submarkets, 2018 vs 2017
Comparable Markets: Buncombe highest 2018 demand growth
6.2 2016 2017 2018 6.4

5.7
5.1
3.7
3.0
2.1 1.9 2.5
1.0 1.3
0.3 0.6
-0.4
-2.1
Demand % Change, by Comparable Market, Total Year, 2016 - 2018

Comparable Markets show decline in Absolute Occupancy from 2017
2016 2017 2018
74.6 75.3 74.7

73.7 73.0
72.9 72.7 72.8
70.7 70.9 70.4 70.9
66.8
65.5 65.1
Absolute Occupancy, Total Year, 2016 - 2018

Comparable Markets
Weekday Occupancy
Total Year 2017 - 2018
2017 2018
73.2 70.6 74.2
68.3 68.1 67.3 66.6 69.9
62.7 61.0

Comparable Markets: Buncombe wins the weekends for
Absolute Occupancy, two years running
2017 2018
84.5 84.3
79.8 80.1 80.5

78.5
76.9
75.9 75.6
73.2
Weekend Occupancy, Total Year 2017 - 2018

Absolute ADR increases across all Comparable Markets
2016 2017 2018

$158.42
$154.12
$150.42
$141.74 $143.12
$137.06
$117.34
$116.38
$114.82 $104.37
$101.90 $96.26
$97.94 $93.55
$89.43
Absolute ADR, Total Year 2016 - 2018

Comparable Markets: ADR Growth slows since 2016
2016 2017 2018

7.9
6.8
5.4
4.4 4.6
3.7 3.4 4.0
2.9
2.5 2.8 2.4
1.4
0.8 1.0
ADR % Change, Total Year 2016 – 2018

Agenda:
4. Forecast

Notable Calendar Shifts Impacting US Lodging
Performance Data in 2019:
Easter: Shift from March to April (also affects Q1/Q2)

Passover: Shift from March to April (also affects Q1/Q2)
Hannukkah: Shift from 12/3 to 12/23, impacting weekly results
Weekend Night: Jun/Sept/Dec loose. May/Aug/Nov gain.
Notable Market Level Events / Comps:

Super Bowl: From Minneapolis to Atlanta
North Carolina: Hurricane Florence 9/14/2018 and thereafter
Florida: Hurricane Michael 10/10/18 and thereafter
California: Wildfires 11/8 through 11/25/2018 and thereafter

Total United States
Key Performance Indicator Outlook (% Change vs. Prior Year)
2019F – 2020F
Outlook
2019 2020
Metric
Forecast Forecast
Supply 2.0% 1.9%
Demand 2.1% 1.9%
Occupancy 0.1% 0.0%
ADR 2.3% 2.3%
RevPAR 2.4% 2.4%

Total United States
Chain Scale Key Performance Indicator Outlook
2019F by Chain Scale
2019 Year End Outlook

Chain Scale
(% chg) (% chg) (% chg)
Luxury 0.0% 2.4% 2.3%
Upper Upscale -0.1% 2.3% 2.1%
Upscale -0.2% 2.1% 1.9%
Upper Midscale -0.1% 2.0% 1.9%
Midscale 0.2% 2.1% 2.3%
Economy 0.1% 2.1% 2.2%
Independent 0.1% 2.3% 2.3%
Total United States 0.1% 2.3% 2.4%

Odds and Ends …
© 2019 STR. All Rights Reserved.

44
Consulting & Analytics
Custom Forecasting Custom Analysis

• 5 yr. and 18-months Forecasts • Custom templates and analyses
• Corporate dashboards
• 5 yr. and 18-months Forecasts • Radial searches
• Hotel Performance Mapping
Consulting HOST
• Market evaluation for development • Segmentation
• Ramp up analysis • STAR Rooms data
• Renovation analysis • F&B STAR data
• Comp Set Analysis & Grading • Additional Revenue

Certification in Hotel Industry Analytics (CHIA)
STR and AHLEI have partnered to launch the

Certification in Hotel Industry Analytics for a variety of industry professionals.
• There are four core content areas:

o Hotel Industry Foundations
o Hotel Math Fundamentals – the metrics used by the hotel industry
o Property Level Benchmarking (STAR Reports)
o Hotel Industry Performance Reports
• One or two-day CHIA workshops are available

• To find out more please contact us at sharecenter@str.com

Questions?
Presentation is available for download.
To view this presentation, click “STR Data Presentations”

from the drop-down menu on www.HotelNewsNow.com.

Thank You!
Bennjin Lao
Business Development Executive
blao@str.com
www.str.com

Appendix

49
North Carolina West
Market

Pipeline
In Construction:
Vertical construction on the physical building has begun.
Final Planning: Under

Construction will begin within the next 12 months. Contract
Planning:
Construction will begin in more than 13 months.

51

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Hospitality Outlook

1. United States Industry overview

2. Local Market update

© 2019 STR, Inc. All Rights Reserved.

Twelve Month Moving Average, December 2018

© 2019 STR. All Rights Reserved. 3

Absolute Occupancy, Twelve Month Moving Average – 2000 to December 2018

© 2019 STR. All Rights Reserved. 4

Absolute ADR, Twelve Month Moving Average – 2000 to December 2018

111 Months 56 Months 105 Months

Total U.S., RevPAR % Change, 1/1990 – 12/2018

84.5 Final Planning

Luxury Upper Upscale Upper Midscale Economy Unaffiliated

1. United States Industry overview

2. Local Market update

© 2019 STR, Inc. All Rights Reserved.

Luxury Upper Upscale Upper Midscale Economy Independent

Glo Hotel – Best Western

© 2019 STR. All Rights Reserved. 13

Occupancy ADR RevPAR

Lux/Upper Up Upscale/Upper Mid Midscale/Econ

Occupancy ADR RevPAR

© 2019 STR. All Rights Reserved. 16

© 2019 STR. All Rights Reserved. 17

© 2019 STR. All Rights Reserved. 18

© 2019 STR. All Rights Reserved. 19

© 2019 STR. All Rights Reserved. 20

© 2019 STR. All Rights Reserved. 21

2015 2016 2017 2018

© 2019 STR. All Rights Reserved. 22

STR Room Demand – The number of hotel rooms sold in a

Hotel Comparable – Studio and one bedroom entire place

Other Types – AirDNA entire place room nights less hotel

© 2019 STR. All Rights Reserved. 23

Source: Airdna & STR

Source: Airdna & STR

Airdna STR 6.9

Source: Airdna & STR

1. United States Industry overview

2. Local Market update

© 2019 STR, Inc. All Rights Reserved.

Supply % Change, Total Year 2016 - 2018

© 2019 STR. All Rights Reserved. 31

Market/Submarket 2016 % Growth 2018 % Growth 2020

Charleston, SC 19,428 7.1% 20,814 10.4% 22,971

Savannah, GA 15, 329 5.7% 16,199 8.5% 17,569

Austin CBD, TX 8,899 21.5% 10,810 17.9% 12,743

Buncombe County, NC 7,230 7.9% 7,801 7.8% 8,410

Cary/South Raleigh, NC 5,012 10.0% 5,514 4.2% 5,745

Brentwood/Franklin, TN 5,019 6.8% 5,360 10.8% 5,940

Mount Pleasant/Isle Of Palms, SC 3,155 15.7% 3,649 20.7% 4,405

6.2 2016 2017 2018 6.4

Buncombe Savannah Charleston Greenville Chattanooga

Demand % Change, by Comparable Market, Total Year, 2016 - 2018

© 2019 STR. All Rights Reserved. 34

2016 2017 2018

74.6 75.3 74.7

Buncombe Savannah Charleston Greenville Chattanooga

Absolute Occupancy, Total Year, 2016 - 2018

© 2019 STR. All Rights Reserved. 35

Buncombe Savannah Charleston Greenville Chattanooga

© 2019 STR. All Rights Reserved. 36

79.8 80.1 80.5

Buncombe Savannah Charleston Greenville Chattanooga

Weekend Occupancy, Total Year 2017 - 2018

© 2019 STR. All Rights Reserved. 37