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HOTEL HORIZONS ® Q4 2020 EDITION Nashville, TN
Nashville Forecast - Upper-Priced Hotels NEW DEVEL OPMENT
CBRE HOTELS RESEARCH YEAR PERIOD OCC Δ OCC ADR Δ ADR REVPAR Δ REVPAR Δ SUPPLY Δ DEMAND
2016 Annual 78.8% 2.5% $195.81 7.9% $154.34 10.6% 0.4% 2.9%
e
l

H Hotel Horizons ® 2017 Annual 78.1% -0.9% $210.192020 EDITION $164.15 6.4% 4.1% 3.1%
o
t
H
o
n
s
z
o
r
i
Q4
7.3%
2018 1 75.3% 3.2% $205.40 3.3% $154.71 6.5% 3.3% 6.6%
2018 2 85.1% 4.7% $226.24 3.6% $192.58 8.4% 5.7% 10.7%
I
L
V
A
S
H
L
T
N
N NASHVILLE, TN 2018 3 78.4% -2.6% $211.54 1.7% $165.85 -0.9% 8.8% 6.0%
E
,

75.7%
4
Regional Economic Summary 2018 Hotel Market Summary -2.2% $220.55 2.9% $167.07 0.6% 13.6% 11.1%
2.9%
7.9%
$170.07
3.6%
2018
8.6%
0.7%
$216.35
78.6%
Annual
“Business contacts in the Sixth District indicated that In 2020, Nashville hotels finished the year with a RevPAR $159.21 2.9% 16.8% 15.9%
$212.91
74.8%
3.7%
1
-0.7%
2019
economic activity continued to expand at a modest pace decline of 62.1%. This was the result of a decline in 0.2% $191.23 -0.7% 12.6% 11.5%
$226.77
84.3%
-0.9%
2019
2
from mid-November through December. Labor markets occupancy of 45.8% and a 30.1% decrease in average daily $174.47 5.2% 7.7% 12.7%
4.6%
82.0%
2019
$212.67
0.5%
3
continued to gradually improve, and wage pressures were room rates (ADR). The 62.1% decline in Nashville RevPAR
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4
77.3%
$217.03
2019
2.0%
muted, on balance. Nonlabor costs related to construction was greater than the national decline of 51.8%. -1.6% $167.69 0.4% 5.6% 7.7%
2019
and supply chains rose further over the reporting period. Annual 79.6% 1.2% $217.52 0.5% $173.12 1.8% 10.5% 11.8%
2020
$203.03
61.3%
-18.0%
1
-4.6%t
Although retail contacts reported overall holiday sales were Nashville's upper-priced properties suffered the greates $124.55 -21.8% 2.8% -15.7%
2
-43.8%
-91.0%
2020
$127.45
7.5%
subdued, ecommerce activity remained strong. Auto dealers decline in RevPAR during 2020. The properties in this $9.62 -95.0% 2.8% -90.8%
-75.2%
2020
$145.92
20.3%
-31.4%
3
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noted sales declined since the previous report. Tourism and category experienced a 63.8% drop in occupancy and a 18.5% $29.66 -83.0% 2.8% -74.5%
$156.74
-66.0%
-27.8%
2020
26.2%
4
hospitality activity softened. Residential real estate demand decrease in ADR. Middle-priced hotels saw their RevPAR $41.13 -75.5% 4.5% -64.5%
-63.8%
-18.5%
28.8%
$177.32
Annual
2020
remained strong, but challenges in commercial real estate decline by 61.3% during the year, while lower-priced $51.13 -70.5% 3.2% -62.6%
1
$160.12
29.1%
2021F
-52.5%
markets persisted. Overall manufacturing activity rose properties experienced a RevPAR fall of 36.7%. -21.1% $46.66 -62.5% 2.9% -51.1%
moderately. Banking conditions remained stable, but some Moving into 2021, Nashville RevPAR is expected to grow $67.23 598.9% 2.9% 480.1%
463.7%
42.6%
2021F
$158.00
2
24.0%
contacts noted an uptick in delinquencies, mostly with 45.1%. By year-end 2021, Nashville RevPAR will still be 45.0% $106.45 258.9% 5.7% 237.2%
2021F
$164.13
219.1%
64.9%
12.5%
3
residential mortgages. 2021F less than the 2019 RevPAR level. RevPAR for Nashville hotels $119.81 191.3% 7.9% 187.5%
70.0%
4
$171.26
9.3%
166.6%
Travel and tourism activity softened since the previous is no 52.1% 80.7% $164.91 -7.0% $85.95 68.1% 4.9% 89.5%
Annualt expected to surpass 2019 levels until 2024. For the
2021F
report. Contacts noted that properties affected by recent year, occupancy is forecast to grow by 44.6%, while average $117.91 37.2% 7.7% 41.0%
30.9%
$172.84
68.2%
4.8%
2022F
Annual
hurricanes, primarily in Alabama, had not completed repairs room rates are projected to increase 0.3%. 11.0% $142.40 20.8% 3.4% 12.5%
74.3%
8.8%
2023F
Annual
$191.77
as quickly as anticipated, which led to canceled reservations. Annual 76.8% 3.4% $207.23 8.1% $159.14 11.8% 2.9% 6.4%
2024F
Drive-to destinations across the District continued to Annual 76.8% 0.0% $221.13 6.7% $169.74 6.7% 2.7% 2.7%
2025F
experience solid activity; however, some contacts anticipate
Source: CBRE Hotels Research, Kalibri Labs, Q4 2020
that surges in COVID-19 cases would dampen demand in the
near term..”
Federal Reserve Bank Beige Book, January 2021 2020 Annual Change in RevPAR
All Hotels Upper-Priced Mid-Priced Lower-Priced
National Upper-Priced Hotels - 2020 Operating Performance
Nashville: Next 4 Quarters DOLLARS PER AVAILABLE ROOM: YEAR-OVER-YEAR CHANGE - DECEMBER YTD 2020 VS DECEMBER YTD 2019
The arrows show the forecast direction of change over the next 4 quarters vs. the
previous 4 quarters. Green indicates the change will be above the long run average, Occupancy -55.4%
yellow indicates it will be the same, and orange indicates it will be below. ADR -36.7% -19.1%
Occupancy Rooms Revenue -64.0%
Occupancy will increase to 58.1%, better than the previous 4 quarters' F&B Revenue -62.1% -70.7%
-61.3%
rate of 40.2%, but below the long run average of 66.1% Total Operating Revenue -64.2%
Departmental Expenses -70.5% -57.9%
Departmental Profit -67.8%
Average Daily Rate Undistributed Expenses Source: Kalibri Labs, Q4 2020
ADR growth expectations are increasing, positive 0.3% vs. the past 4 Gross Operating Profit -91.8% -42.0%
Annual Performance - Five Year History and Forecast
quarters' rate of negative 30.1%, but are below the long run average of Management Fees OCC Δ OCC ADR -65.9% REVPAR Δ REVPAR
Δ ADR
YEAR
positive 1.7% Income Before Non-Operating 76.4% 2.4% -94.2% $139.92 6.0% $106.90 8.5%
2016
Revenue Per Available Room Non-Operating Income and Expenses 75.9% -0.7% $147.58 5.5% $111.97 4.7% -13.5%
2017
2018
74.1%
RevPAR growth projections are climbing to 45.1% as compared to the EBITDA -124.0% -2.4% $152.19 3.1% $112.73 0.7%
past 4 quarters' rate of negative 62.1%, and are greater than the long 2019 -140% 74.2% -120% 0.1% -100% $153.09 -80% 0.6% -60% $113.54 -40% 0.7% -20% 0%
run average of positive 1.1% 2020 40.2% -45.8% $107.07 -30.1% $43.05 -62.1%
2021F
Supply (orange indicates above long-term average) Sample Averages: 281 Rooms, 32.6% Occupancy, $147.96 ADR $107.43 0.3% $62.45 45.1%
58.1%
44.6%
Source: CBRE Hotels Research, Same-Store Sample, Open All Twelve Months
Supply growth is less active, 5.4% vs. the past 4 quarters' rate of 6.1%, 2022F 68.4% 17.7% $124.89 16.3% $85.49 36.9%
though it is greater than the long run average of 2.3% For a more comparable and detailed financial comparison, we recommend a Benchmarker report.
6.8%
73.1%
SM
2023F
$104.30
14.2%
$142.64
22.0%
10.7%
2024F Please contact Robert Mandelbaum at +1 404 812 5187 for more information.
74.6%
2.0%
8.6%
$115.51
$154.94
Demand 2025F 74.2% -0.5% $163.43 5.5% $121.18 4.9%
Forecast demand growth is climbing, positive 52.4% vs. the past 4 Long Run Averages 2000 to 2020 P. 5 / CBRE HOTELS RESEARCH
quarters' rate of negative 42.5%, and is greater than the long run 127
HO TEL ZAZA + ZAZA HO SPIT ALITY | 20 21 MARCH YTD
average of positive 0.8% Occupancy: 66.1%, ADR Change: 1.7%, RevPAR Change: 1.1%
Source: CBRE Hotels Research, Kalibri Labs, Q4 2020