Kansas City Lodging Market Analysis

Kansas City Lodging Market Analysis

The Impacts of Inventory Additions within the Kansas City Marketplace

December 18, 2018

Objectives & Agenda

Section 1 ? IMPACT OF SUPPLY GROWTH

Section 2 ? COMPARABLE & COMPETITIVE MARKETS

Determine Impact of Inventory Additions

Compare & Contrast the Marketplace

Section 3 ? MARKET ASSUMPTIONS & MODELING

Project Sales & Funding

Implications

? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.

Process

Research and Outreach

? Analyzed STR reports ? Tracked added inventory ? Surveyed Market Mix

Analysis and Projections

Comparison and

Assessments

? Reviewed sales reports & impacts

? Prepared outlook & projections

? Developed future sales goals ? Established associated

budget scenarios based on collections from Convention and Tourism Tax District

? Compared results to other like destinations and national trends

? Reviewed health of Kansas City economy

? Present findings and opportunities

? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.

Section 1:

Historic Impact of Kansas City Supply Growth

Lodging Supply & Performance

Kansas City Convention & Tourism District Lodging Performance

72% Occupancy for "healthy"

lodging market

$140

70%

$120

60%

$100

50%

$80

40%

$60

30%

$40

20%

$20

10%

$0 2007

ADR RevPAR Occupancy New Rooms

$96.09 $57.85 60.2%

152

2008

$98.27 $58.87 59.9%

72

2009

$90.93 $50.82 55.9%

0

2010

$91.69 $53.49 58.3%

343

2011

$93.13 $54.24 58.2%

0

ADR

2012

$97.00 $57.59 59.4%

232

2013

$97.98 $58.62 59.8%

132

RevPAR

2014

2015

2016

2017

0%

2018 YTD

Annual Avg

$101.34 $106.19 $108.87 $113.38 $116.64 $100.96

$64.96 $70.28 $69.96 $76.23 $77.36 $62.52

64.1%

66.2%

64.3%

67.2%

66.3%

61.7%

0

0

227

232

357

Occupancy

New Rooms

Source: Smith Travel Research, JLL

? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.

Future Room Inventory

Convention & Tourism Tax District

Year 2017

Number of Hotels

83

Cumulative Potential & Added Inventory

13,121

Added Rooms (construction)

N/A

Announced Potential Rooms -

2018

91

13,946

825

-

2019

96

14,895

514

435 (4 properties)

2020

98

16,169

1,121

153 (1 property)

2021

98+

16,411

-

242 (1 property)

2022

98+

16,931

-

520 (3 properties)

Source: Visit KC, STR, JLL

? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.

Impact of New Inventory on Occupancy

Convention & Tourism Tax District Occupancy with Added Supply

72% Occupancy

for "healthy"

80%

lodging market

Stabilization line for 67% occupancy rate*

70%

60%

50%

40%

The path of doing nothing

Stability requires production of 483,938 new room nights in 2020

Projected decrease in occupancy rate with no

change in demand

20,000 18,000 16,000 14,000 12,000 10,000

Occupancy Rate Total Number of Rooms

8,000 30%

6,000 20%

4,000

10% 2,000

0%

0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Full service

Select service

Occupancy at 67.2%

Occupancy

Projected Occupancy - No New Demand

* "Stabilization occupancy" derived from taking the average occupancy for 2016, 2017, and 2018, with 2018 occupancy projected to be 66.5%.

Source: STR, JLL

? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.

7

Impact on ADR & RevPAR

Average Daily Rate & RevPAR Total Number of Rooms

Convention & Tourism Tax District Performance with Added Supply

$140

2.8% actual CAGR in ADR

from 2009 through 2017

$120

Temptation point for lowering ADR

$100

1.15% projected CAGR in ADR from 2017 through 2023

$80

$60

20,000 18,000 16,000 14,000 12,000 10,000 8,000

$40

6,000

Projected RevPAR drops by

9.2% between 2017 and 2020

4,000

$20

2,000

$0

0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

full service

select service

RReevvPPaArR

ADR

Source: STR, JLL

? 2018 Jones Lang LaSalle IP, Inc. All rights reserved.

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