PKF CONSULTING AND CBRE HOTELS` OUTLOOK

PKF CONSULTING AND CBRE HOTELS` OUTLOOK

PKF CONSULTING AND
CBRE HOTELS’ OUTLOOK
For the Canadian Lodging Sector 2015/2016
September 15, 2015
On pace to
exceed original
forecasts
FIFA / PanAM
games impacts
Month of June
was record
setting across
the country
Prospects for
overall travel
growth in 2016
TRANSITION FROM RESOURCE MARKET
Economic and Travel Outlooks
National Economic Outlook - 2015/16
1.4%
2.4%
2.2%
1.95
3.0%
1.75
1.55
$1.58
$1.59
$1.63
$1.66
$1.70
$1.74
$1.77
$1.80
2.0%
1.0%
0.0%
-1.0%
$1.54
-2.0%
1.45
-3.0%
2008 2009 2010 2011 2012 2013 2014 2015f 2016p
Real GDP
% Change
Source: Statistics Canada, Conference Board of Canada, Canadian Outlook Summer 2015, Scotiabank
Group – Global Forecast Update 2015; CIBC World Markets – Monthly FX Outlook, 2015; RBC –
Economic and Financial Market Outlook – 2015
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
% Change
1.85
1.65
4.0%
National Travel Outlook 2015/16
Overnight Travel
2014
Act ual
2015
Forecast
2016
Project ion
Bu sin ess t r avel d o m est ic
2.5%
0.3%
2.7%
Pleasu r e t r avel d o m est ic
2.4%
2.7%
2.2%
To t al d o m est ic t r avel
2.0%
2.1%
2.1%
U.S. Tr avel
1.1%
7.5%
3.2%
Over seas t r avel
9.3%
5.0%
4.1%
To t al o ver n ig h t t r avel
2.2%
2.7%
2.3%
Nat io n al acco m m o d at io n d em an d
grow t h
3.2%
1.0%
2.4%
Source: Canadian Tourism Research Institute, Conference Board of Canada, Fall 2015 Forecast
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
Regional Travel Outlooks - % Growth
Western Canada
Central Canada
Atlantic Canada
3.0%
2.7%
2.4%
2.6%
2.2%
1.9%
2015f
2016f
2017f
2015f
2016f
1.7%
2017f
Source: Canadian Tourism Research Institute, Conference Board of Canada, Preliminary Fall 2015
Forecast
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
2015f
1.9%
2016f
1.6%
2017f
National Market & Financial
Outlooks
2015/2016
National Hotel Investment
• Volume
• Price per room
• 2015 YE Forecast
Buyer Profile
Public/
REITS
Private
Investors
Foreign Capital
National Supply & Demand Outlook
Supply & Demand Growth
National Occupancy
3.2%
2.4%
1.5%
1.3%
1.0%
0.6%
2014
2015F 2016P
Supply
2014
2015F 2016P
Demand
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
2014
Actual
64%
2015
Forecast
64%
2016
Projection
65%
National ADR, RevPar & Bottom Line Outlook
National ADR Growth
National RevPar Growth
2014 Actual
3.7%
2014 Actual
6.3%
2015 Forecast
3.9%
2015 Forecast
3.4%
2016 Projection
3.5%
2016 Projection
4.7%
Adjusted Net
Operating
Income
/Available
Room ($000's)
8.1%
6.9%
13.5%
$12.5
$11.6
$10.8
2014
2015F
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
2016P
Atlantic Canada Hotel Investment
Atlantic Canada Supply & Demand Outlook
Supply & Demand Growth
2.3%
2.1%
Occupancy
2.0%
1.2%
0.6%
0.0%
2014
2015F 2016P
Supply
2014
2015F 2016P
Demand
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
2014
Actual
58%
2015
Forecast
58%
2016
Projection
59%
Atlantic Canada ADR, RevPar & Bottom Line Outlook
Atlantic Canada ADR Growth
Atlantic Canada RevPar Growth
2014 Actual
3.1%
2014 Actual
2.9%
2015 Forecast
3.0%
2015 Forecast
1.8%
2016 Projection
3.0%
2016 Projection
4.4%
Adjusted Net
Operating
Income
/Available
Room ($000's)
8.1%
0.1%
5.4%
$8.1
$7.5
$7.1
2014
2015F
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
2016P
SOME GROWTH EXPECTED IN 2015 & 2016
Western Canada Hotel Investment
Western Canada Supply & Demand Outlook
Supply & Demand Growth
Occupancy
3.4%
3.0%
2.1%
2.0%
1.6%
0.0%
2014
2015F 2016P
Supply
2014
2015F 2016P
Demand
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
2014
Actual
65%
2015
Forecast
64%
2016
Projection
64%
Western Canada ADR, RevPar & Bottom Line Outlook
Western Canada ADR Growth
Western Canada RevPar Growth
2014 Actual
4.0%
2014 Actual
5.7%
2015 Forecast
3.0%
2015 Forecast
0.9%
2016 Projection
3.0%
2016 Projection
4.1%
6.0%
Adjusted Net
Operating
Income
/Available
Room ($000's)
$15.4
11.3%
-0.2%
$14.5
$14.5
2014
2015F
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
2016P
OVERALL NUMBERS COULDN’T BE MORE MISLEADING
Central Canada Hotel Investment
Central Canada Supply & Demand Outlook
Supply & Demand Growth
Occupancy
2.5%
2.0%
0.9%
2.0%
0.7%
-0.5%
2014
2015F 2016P
Supply
2014
2015F 2016P
Demand
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
2014
Actual
64%
2015
Forecast
65%
2016
Projection
66%
Central Canada ADR, RevPar & Bottom Line Outlook
Central Canada ADR Growth
Central Canada RevPar Growth
2014 Actual
3.2%
2014 Actual
6.4%
2015 Forecast
5.0%
2015 Forecast
6.1%
2016 Projection
4.0%
2016 Projection
5.3%
Adjusted Net
Operating
Income
/Available
Room ($000's)
18.1%
$8.6
2014
16.7%
10.8%
$10.1
$11.1
2015F
2016P
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
CITY WIDE OCCUPANCY IN TORONTO, MONTREAL AND
OTTAWA ALL OVER 70%
Major Market Outlooks
Regina
Edmonton
Calgary
Saskatoon
St. John’s
Winnipeg
Quebec City
Montreal
2016 RevPAR Ranking
Ottawa
Niagara Falls
Halifax
Toronto
Vancouver
Major Market* Outlooks RevPar Projection - 2016
8.0%
4.0%
0.0%
-4.0%
-8.0%
-12.0%
> 5% RevPar
Growth
4 - 5% RevPar
Growth
< 1% RevPar
Growth
* ‘Major Markets’ refer to Greater Metro Areas
Source: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
Vancouver
Ottawa
Montreal
Toronto
St. John’s
Quebec City
Calgary
Saskatoon
Niagara Falls
Halifax
Edmonton
Winnipeg
Regina
$126
$116
$114
$107
$107
$105
$104
$99
$97
$87
$83
$81
$73
National Financial Outlook Beyond 2015
30%
2000
Central Canada
40%
2008
2015
Western Canada
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: PKF Consulting Inc., a CBRE Company with reproduction and use of information subject to
Disclaimer and Restrictions as detailed at www.pkfcanada.com
2020
Atlantic
40%
$10.5
(11%)
$7.5
$14.5
$10.1
$8.4
12%
$14.1
14%
$14.7
$8.9
$7.5
$10.5
(26%)
(1%)
$18.9
40%
$12.1
Adjusted Net Operating
Income Per Available Room
($000's)
National Financial Outlook – Beyond 2015
David Larone
Brian Stanford
Fran Hohol
Erin O’Brien
Rebecca Godfrey
David Ferguson
Kirstin Hallett
Nicole Nguyen
Robert Sedore
Gregory Hives
Lauren Arnold
Kailey Gomez
Carol Lopes
JoAnne Orr
www.pkfcanada.com | www.cbre.ca
Bill Stone
Greg Kwong
Brian Flood
Deborah Borotsik
Marc-Aurele
Mailloux-Gagnon
Cindy Schoenauer
Karina Toome
Vanessa Boland