Source: 2023STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Group. Any reprint, use or republicationof 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 informationin the presentationshould not be construedas investment, tax, accountingor legal advice. Milwaukee Lodging Update and Forecast June 30th , 2023, Hotel Metro, Milwaukee, WI.
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Source: STR. © 2023 CoStar Group 4 P&L Intelligence Top-Line Performance Inventory and Pipeline Forward-Looking Data Transactions The powerful combination of CoStar and STR Benchmarking SAMPLEDATA SAMPLEDATA STRID:#### HotelName Sampleaddress+1555-555-5555Website CRE Intelligence
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STR Benchmarking is the transformative hotel industry solution that delivers the property- and portfolio-level insights needed to make smart, real-time decisions and optimize strategies across entire enterprises. Powered by CoStar technology, STR Benchmarking is the industry’s most comprehensive market share product, featuring top-line historical metrics, detailed analytics and visualizations, forwardlooking data, and P&L intelligence.
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Hotel Companies Banks Vendors Gov. & Travel
Investors Advisors
Orgs
Year-Over-Year is important again
Source: STR. © 2023 CoStar Group 7 Actual 2019 % Chg. YOY % Chg. Room Supply 174m 3.0% 0.2% Room Demand 113m -2.4% 0.1% Occupancy 64.8% -5.3% -0.2% ADR $156 17.6% 3.8% RevPAR $101 11.4% 3.7% Room Revenue $17b 14.7% 3.9%
Total U.S., May 2023
ADR is still the driver US, YOY % change, May 2023
Source: STR. © 2023 CoStar Group 8 -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% Monthly YTD R12 Occ ADR RevPAR
Fewer new rooms help bolster occ
US, YOY supply and demand % change, Jun 2022 – May 2023
Source: STR. © 2023 CoStar Group 9 -2% 0% 2% 4% 6% 8% 10% 12% 14% Jun 22 Jul 22 Aug 22 Sep 22 Oct 22 Nov 22 Dec 22 Jan 23 Feb 23 Mar 23 Apr 23 May 23 Supply % Chg. Demand % Chg.
Overlap over last year’s performance
Total US, monthly occupancy, 2019, 2022, 2023
Source: STR. © 2023 CoStar Group 10 0% 10% 20% 30% 40% 50% 60% 70% 80% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2022 2023
Weekend travel continues to soften
US, occupancy % change YOY, Jan 2023 – May 2023
Source: STR. © 2023 CoStar Group 11 -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Shoulder (Sun, Thu) Weekday (Mon-Wed) Weekend (Fri, Sat) Jan Feb Mar Apr May
Source: STR. © 2023 CoStar Group 12 $80 $90 $100 $110 $120 $130 $140 $150 $160 $170 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2022 2023
ADR,
2023
Rate in constant movement, upwards Total US, monthly
2019, 2022,
ADR growth finally normalizing
US, YOY ADR % change, Jun 2022 – Jul 2023
Source: STR. © 2023 CoStar Group 13 0% 5% 10% 15% 20% 25% Jun 22 Jul 22 Aug 22 Sep 22 Oct 22 Nov 22 Dec 22 Jan 23 Feb 23 Mar 23 Apr 23 May 23
Weekend travel continues to soften
US, ADR % change YOY, Jan 2023 – May 2023
Source: STR. © 2023 CoStar Group 14 0% 5% 10% 15% 20% 25% Shoulder (Sun, Thu) Weekday (Mon-Wed) Weekend (Fri, Sat) Jan Feb Mar Apr May
We’re back
Total U.S., RevPAR % change from prior year, Jan 1990 – May 2023
Source: STR. © 2023 CoStar Group 15 -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 1990 2000 2010 2020
56 Months 115 Months (out of 119) 111 Months (out of 112) 27 Months
Forward STAR: This summer is looking a lot like 2022
Total U.S., Occupancy on the books, top activated markets
: STR. © 2023 CoStar Group 16
Article published by Hotel News Now | CoStar
Chains
Signs of recovery for full service
Total
Source: STR. © 2023 CoStar Group 18 -10% 0% 10% 20% 30% 40% 50% Luxury Chains Upper Upscale Chains Upscale Chains Upper Midscale Chains Midscale Chains Economy Chains Independents Jan-23 Feb-23 Mar-23 Apr-23 May-23
U.S., Demand, YOY % change, Jan 2023 – May 2023
High-end chains continue to increase supply
US, supply, YOY % change, May 2023
Source: STR. © 2023 CoStar Group 19 -3% -2% -1% 0% 1% 2% 3% 4% Luxury Chains Upper Upscale Chains Upscale Chains Upper Midscale Chains Midscale Chains Economy Chains Independents Supply % Chg. Supply % Chg. YTD Supply % Chg. R12
Return of the corporate traveler
Total U.S., YOY % Chg., YTD May 2023
Luxury Chains Upper Upscale Chains Upscale Chains Upper Midscale Chains
Midscale Chains Economy Chains Independents
Source: STR. © 2023 CoStar Group 20 8% 18% 14% 9% 2% -1% 7% -5% 0% 5% 10% 15% 20%
Occupancy ADR RevPAR
Segmentation
Groups continue to trail transient index
US, Lux & Upper Upscale classes segmentation demand % chg. to 2019, Jan 2021 – May 2023
Source: STR. © 2023 CoStar Group 22 -90% -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Group Demand Transient Demand
Group rates holding $250 mark, well above 2019
Total U.S., Luxury & upper upscale hotels, ADR, Jan 2019 – May 2023
Group ADR Transient ADR
Source: STR. © 2023 CoStar Group 23 $0 $50 $100 $150 $200 $250 $300 $350 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Group maintaining performance
US, Lux & Upper Upscale classes, segmentation RevPAR % chg. to 2019, Jan 2021 – May 2023
Source: STR. © 2023 CoStar Group 24 -100% -80% -60% -40% -20% 0% 20% 40% Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Group RevPAR Transient RevPAR
Markets
Markets outside the Top 25 slowing down
US, demand, YOY % change, Jan – May 2023
Other Markets Top 25 Markets
Source: STR. © 2023 CoStar Group 26 -5% 0% 5% 10% 15% 20% 25% Jan Feb Mar Apr May
Top 25 market ADR growth paces ahead
US, ADR, YOY % change, Jan – May 2023
Other Markets
Top 25 Markets
Source: STR. © 2023 CoStar Group 27 0% 5% 10% 15% 20% 25% Jan Feb Mar Apr May
Recovery still needed in select markets
Top 25 Markets, ADR % chg. to 2019, May 2023
40%
Single digit growth
Source: STR. © 2023 CoStar Group 28 -20% -10% 0% 10% 20%
30%
Pipeline
Rooms under construction on the decline again
Source: STR. © 2023 CoStar Group 30 Phase 2023 2022 % Change In Construction 151 152 -1% Final Planning 243 179 36% Planning 236 278 -15% Under Contract 630 610 3%
U.S., Pipeline rooms in thousands by phase, May 2023 and 2022
The curve is flattening
Total U.S., rooms in construction from prior peak, 2007 and 2020
Great
Source: STR. © 2023 CoStar Group 31 0 50 100 150 200 250 Peak 12 24 36 48 60 72 84 96 Rooms in ‘000s Months
Recession
COVID
(Dec 2007)
(Apr 2020)
BT isn’t dead: Upper Ups well-represented in pipeline
US, rooms in construction by chain scale, May 2023
Source: STR. © 2023 CoStar Group 32 5% 3% 4% 4% 2% 1% 2% 0% 1% 2% 3% 4% 5% 6%5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Independent Rooms in construction In Construction rooms I/C as % of Existing
Hottest IC markets have more early dev plans, too
Top 25 markets, pipeline as percent of existing supply, May 2023
Source: STR. © 2023 CoStar Group 33 0% 5% 10% 15% 20% 25% 30% Minneapolis, MN Orange County, CA Chicago, IL Oahu Island, HI Boston, MA Las Vegas, NV Philadelphia, PA Seattle, WA Saint Louis, MO New Orleans, LA Washington, DC San Francisco/San Mateo, CA Orlando, FL Houston, TX New York, NY Tampa, FL Los Angeles, CA San Diego, CA Atlanta, GA Miami, FL Detroit, MI Denver, CO Dallas, TX Phoenix, AZ Nashville, TN Planning Final Planning In Construction
Milwaukee’s newest rooms
Under Construction and Final planning
Source: STR. © 2023 CoStar Group 34
Forecast
US RevPAR forecast upgraded
Source: STR. © 2023 CoStar Group 36 2022 2023F 2024F Supply 1.8% 0.6% 1.5% Demand 10.9% 2.1% 3.0% Occupancy 8.9% 1.4% 1.5% ADR 19.9% 3.5% 3.1% RevPAR 30.6% 5.0% 4.6%
U.S., KPI YOY % change, 2022 – 2024F
Luxury ADR expected to see adjustment
US chain scales, KPI % change YOY, 2023F
Source: STR. © 2023 CoStar Group 37 5.8% 9.4% 6.2% 4.1% 1.6% -0.1% 2.4% -2% 0% 2% 4% 6% 8% 10% Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Independent Occ ADR RevPAR
RevPAR has never grown in a recession, but…
Total US, historic and forecast RevPAR, Q1 2023
Source: STR. © 2023 CoStar Group 38
-3% -7% -17% -47% 5% 1991 2001 2009 2020 2023F
Milwaukee, WI
By Market & Submarkets
Wisconsin non-seasonal RevPAR map
Select submarkets, 12 MMA RevPAR, May 2023
Source: STR. © 2023 CoStar Group 40
Occupancy to follow YOY trending
Select markets, Monthly Occupancy, May 2023 & Forecast
Source: STR. © 2023 CoStar Group 41
Rate forecasted to softly grow, except for Madison market
Select markets, Monthly ADR, May 2023 & Forecast
Source: STR. © 2023 CoStar Group 42
Chicago tops outlook with Madison seeing adjustment
Select markets, Monthly RevPAR, May 2023 & Forecast
Source: STR. © 2023 CoStar Group 43
Upscale & Upper Midscale overlapping total market performance
Milwaukee market, 12MMA Occupancy by collapsed Class, May 2023 & Forecast
Source: STR. © 2023 CoStar Group 44
ADR outlook remains positive, by a couple
of
$; adjustment ahead
Milwaukee market, 12MMA ADR by collapsed Class, May 2023 & Forecast
Source: STR. © 2023 CoStar Group 45
Full-service hotels still on their way to fully recover from COVID-Coaster
Milwaukee market, 12MMA RevPAR by collapsed Class, May 2023 & Forecast
Source: STR. © 2023 CoStar Group 46
Double digit RevPAR growth in most submarkets
Milwaukee submarkets, Snapshot, 12MMA KPIs & % change
Source: STR. © 2023 CoStar Group 47
The growth trend remains, yet, slower moving forward
Milwaukee submarket, Monthly ADR, May 2023 & Forecast
Rate remains the driving KPI
Milwaukee submarket, Monthly RevPAR, May 2023 & Forecast
Takeaways
Recession headwinds to temper YE23-24 growth
Group / Corporate Travel is returning
Transient ADR has likely peaked
Many small adjustments needed ahead
Source: STR. © 2023 CoStar Group 50
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Source: STR. © 2023 CoStar Group 53 Source: 2023STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Group. Any reprint, use or republicationof 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 informationin the presentationshould not be construedas investment, tax, accountingor legal advice. Questions Rico Louw, CHIA rlouw@str.com
Source: STR. © 2023 CoStar Group 54 Source: 2023STR, LLC / STR Global, Ltd. trading as "STR". © CoStar Group. Any reprint, use or republicationof 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 informationin the presentationshould not be construedas investment, tax, accountingor legal advice. Thank you! Rico Louw, CHIA rlouw@str.com
