Tom Barrett Head of Hotels & Leisure Savills Ireland - PowerPoint PPT Presentation

IHF CONFERENCE 2016 Driving Innovation ‘ Hotel Industry Performance and Trends ’ Tom Barrett Head of Hotels & Leisure Savills Ireland @SavillsIreland

ECONOMIC OVERVIEW

ECONOMIC OVERVIEW – Recent Years Visitor Global Irish Consumer Irish GDP Numbers Economy Employment Sentiment Domestic Occupancy Transaction Valuation Euro Travel & ADR Volumes Multiples

IRISH CONSUMER SENTIMENT 1998 - 2016 150 2000 = = 130 2001 2001 110 Base = 100 in Q4 2005 90 2008 70 50 30 Source: ESRI / KBC Bank Ireland

RECOVERY IN VOLUME & PRICING 25 20 Furniture Clothing Sweet 15 Spot Electrical 10 Furniture 5 Grocery Bars Clothing Prices Grocery 0 (% y/y) -8 -6 -4 -2 0 2 4 6 8 Electrical -5 Bars -10 Recession -15 -20 Oct-13 Oct-15 Source: CSO, Savills Research Sales Volume (% y/y)

IRISH RETAIL SALES – Gap Closing as Capital Expenditure Recovers 120 115 110 Index: 2005 = 100 105 100 95 90 85 All retail businesses, excluding motor trades - 3 Month Moving Average All retail businesses - 3 Month Moving Average Source: CSO

IRISH ENERGY PRICES 110 DOWN 11% 100 UP 28% 90 80 Jan-2010 Jul-2010 Jan-2011 Jul-2011 Jan-2012 Jul-2012 Jan-2013 Jul-2013 Jan-2014 Jul-2014 Jan-2015 Jul-2015 Jan-2016

ECONOMIC OVERVIEW - Now Oil Global Stock International Debt Price Euro Economy Market Availability Occupancy Hotel Visitor Transaction Valuation Multiples & ADR Consolidation Numbers Volumes Stablising Continues

STOCK MARKET

DALATA PLC (2 years) 6.00 DOWN 17% 5.00 UP 58% Eur/share 4.00 UP 30% UP 18% 3.00 2.00

INTERNATIONAL (2 years) 5,500 3000 2800 5,000 2600 £/share £/share 4,500 2400 2200 4,000 2000 3,500 1800 90 52 85 47 80 $/share Eur/share 75 42 70 37 65 60 32 55 27 50

IRISH HOTEL TRANSACTIONS

HOTEL ASSET SALES BY VOLUME & VALUE € 1,200 80 70 € 1,000 60 € 800 50 Millions € 600 40 Hotels 30 € 400 20 € 200 10 € 0 0 2011 Total Sold 2011 Total Sold 2012 Total Sold 2013 Total Sold 2014 Total Sold 2015 2012 2013 2014 2015 Inns Asset Sales Moran Bewleys & Jurys No. of Hotels Sold

HOTEL TRANSACTIONS – By Value & Buyer Type 11% 14% Price points Up to € 10m 50% 28% No of € 10m – € 40m 61% Value 36% Hotels € 40m +

HOTEL TRANSACTIONS € 40M + 11% No of Hotels 50% Value John Malone

HOTEL TRANSACTIONS € 10M - € 40M 28% 4 2 No of Hotels 4 36% 10 INDIVIDUAL BUYERS Value

HOTEL TRANSACTIONS € 10M - € 40M Belfast x 3 Fermanagh x 1 Galway Dublin x 3 x 7 Kildare x 1 Wexford x 1 Limerick x 1 Cork x 3

HOTEL TRANSACTIONS UNDER € 10M 61% No of Hotels Philip Hotel Hibernian Hotel Metropole Hotel South Court Hotel Holdings Ltd Kilkenny Cork Limerick 14% Metro Hotel Charleville Park Gallagher's Hotel Dublin 9 Hotel Co Cork Letterkenny Value

HOTEL VALUES – THE RECOVERY Dublin Hotel 2007 2010 2012 2016 € 10m € 6.5m € 7.5m € 10m Sales € 3m € 1.0m € 1.7m € 3.5m EBITDAR x 20 x 10 x 11 x 15 Value Multiple € 60m € 10m € 19m € 52m Value € 340k € 60k € 110k € 300k Per Bedroom These figures are not intended as a formal valuation and should not be relied upon as such. They are given in the course of our property advisory role and do not come within the scope of the valuation and Appraisal Manual issued by the Society of Chartered Surveyors. Savills accepts no liability for work completed.

HOTEL VALUES – THE RECOVERY Regional Hotel 2007 2010 2012 2016 € 5m € 3.5m € 3.8m € 4.5m Sales € 1m € 0.3m € 0.4m € 0.8m EBITDAR x 15 x 7 x 9 x 10 Value Multiple € 15m € 2m € 3.5m € 8m Value € 150k € 20k € 35k € 80k Per Bedroom These figures are not intended as a formal valuation and should not be relied upon as such. They are given in the course of our property advisory role and do not come within the scope of the valuation and Appraisal Manual issued by the Society of Chartered Surveyors. Savills accepts no liability for work completed.

HOTEL DEVELOPMENT

BUY OR BUILD? 2016 2015 Clarion Sligo €80k Pillo Galway €100k 2013 2015 2014 2016 Bewleys Clarion IFSC Oriel House Ballsbridge Clarion Hotel Hotel €200k €250k €200k+ €100k

POTENTIAL NEW HOTEL BEDROOMS BY KEY LOCATIONS 1,600 1,400 1,200 1,000 800 No. of Beds 600 400 200 0 Dublin 1 Dublin 2 Dublin Airport Dublin 8 Cork

HOTEL BRANDS

BRANDS IN IRELAND 3,000 2,700 2,400 2,100 1,800 1,500 1,200 Regional 900 Dublin 600 300 0 -300 -600

SAVILLS HOTELS AND LEISURE • Acquisitions and Disposals • Source local and international Investors or Partners • Negotiation of Hotel Leases, Management and Franchise Agreements • Development Feasibility • Strategic Reviews with appropriate solutions • Commercially aware Valuations