Brian Berry "INDUSTRY TRENDS & INSIGHTS" - Group data analytics/revenue management Session

HSMAI WASHINGTON, DC CHAPTER Brain Berry SVP Sales and Data Analytics, Cvent Inc.

INDUSTRY TRENDS & INSIGHTS ▪ ▪ ▪ ▪

Meeting & Event Performance Industry Threats Meeting Planner Insights Key Strategies and tips

WHAT DOES INDUSTRY DATA SUGGEST?

U.S. GROUP DEMAND & OCCUPANCY (12 MMA) 5.0%

ADR

4.0%

GROUP OCCUPANCY

3.0% 2.0%

Demand

2015: +0.4%

1.0%

2016: -1.7%

0.0%

2017: -2.4%

-1.0% -2.0%

Occupancy

-3.0% -4.0% Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 15 16 16 16 16 16 16 16 16 16 16 16 16 17 17 17 17 17 17 17 17 17 17 17 17 18 18 18

Source: STR U.S. Upper Upscale and Luxury Class

YTD: -0.1% July 2018

GROUP OCCUPANCY BY MARKET 2014-2017 Luxury and Upper Upscale Group Occupancy Change (%) 20.0 15.0 10.0 5.0

0.0 -5.0 -10.0 -15.0 -20.0

-4.6

TRANSIENT AND GROUP MIX TREND

DIVERGENT DEMAND DRIVERS TRANSIENT (LEISURE) ▪ Retiring Baby Boomers ▪ Strong Employment ▪ Consumer Confidence

▪ International Arrivals ▪ Experiential Consumers

DIVERGENT DEMAND DRIVERS

Business Confidence Index 102 101 100 99

GROUP (BUSINESS)

98

▪ Business Confidence

97

▪ Spending/Investment

96 95

▪ Alternatives

94

▪ Work-Life Balance

93

▪ Las Vegas

Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

WHAT DOES CVENT’S DATA SUGGEST?

GROUP BUSINESS OUTLOOK To download full report, please visit: explore.cvent.com/groupbusinessoutlook

GROUP BUSINESS OUTLOOK – FUTURE PACE

SMALL IS THE NEW BIG

73% Less than 50 Rooms

42% Growth in 2 Years

INDUSTRY INSIGHTS: TAKEAWAYS AND STRATEGIES

Storm Clouds

Group performance has been softening and appears to be getting weaker

Group-Up!

Typically, the best strategy in an uncertain or declining market is to increase group mix

HyperCompetitive

Growing group isn’t going to be easy. Blocks are shrinking, demand is declining, and supply is increasing

WHAT ARE THE RISKS?

GLOBAL GDP – ALTERNATIVE SCENARIOS

ECONOMIC RISK Impact to GDP

U.S. HOTEL SUPPLY GROWTH Supply

% Chg

160,000

4.5%

140,000

4.0% 3.5%

120,000

3.0% 100,000 2.5% 80,000 2.0% 60,000

1.5% 40,000

1.0%

20,000

0.5%

-

0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

WHAT ARE PLANNERS SAYING?

PLANNERS EXPECT TO SPEND MORE

52%

50%

32%

31%

How has your budget changed?

17%

INCREASED

NO CHANGE 2018

2017

19%

DECREASED

PLANNERS DON’T VIEW HOTELS AS A COMMODITY

1-3% SAVINGS

A DISCOUNT WOULD NOT CHANGE DECISION 3-5% SAVINGS

Savings level to switch to second choice

6-10% SAVINGS

OVER 10% SAVINGS

2%

10%

20%

33%

35%

PLANNERS ARE FLEXIBLE

PLANNERS WANT CONCESSIONS

Source: Cvent Planner Sourcing Report 2017

PLANNERS ARE CHANGING

67%

PLANNER SOURCING

Online Sourcing Tool Search Engine

The buyer’s journey is now done digitally

*Cvent Planner Report

Direct to Venue Peer Recommendation

Other

38% 29% 17% 12% 4%

DIGITAL TRANSFORMATION Cvent Hospitality Cloud Growth: Revenue Sourced $14.7B $11.4B $9.8B $8.0B $6.5B $4.7B $50M

$600M

2008

2009

$2.4B 2010

$3.2B

2011

2012

2013

2014

2015

2016

2017

THE IMPACT OF CVENT

Unique RFPs Value Sourced $83,013,344,423 Total Room Nights Sourced 258,256,608

Total Unique RFPs Value Sourced

*Source: CSN and Lanyon Group 2008-2017

Total RFPs Sourced 11,898,500

Thank You Brian Berry SVP Sales and Data Analytics, Cvent Inc.

WASHINGTON DC

$1,556,491,047 Sourced through Cvent Aug ‘17 – Jul ‘18

93,687 RFPs received in the last 12 months

SLICING THE DATA FURTHER

~7.8k Per month

257 Per day

BOOKING WINDOW| AUG ‘17 – JUL ‘18 Booking Window

YOY RFP Percent

1-30 Days

-5%

31-60 Days

-2%

61-90 Days

4%

91-120 Days

-1%

121-180 Days

6%

181-270 Days

4%

271-365 Days

7%

366+ Days

5%

AVERAGE AWARDED ADR Brand Scale

AUG ‘17 – JUL ‘18

Luxury

$274

Upper Upscale

$200

Upscale

$188

Upper Midscale

$160

Midscale

$145

Economy

$79

Independent

$195

FUTURE PROPOSED ADR – WASHINGTON DC 300.00 250.00 200.00 150.00

100.00 50.00 0.00 Q1 2019

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

AVERAGE RESPONSE RATE | AUG ‘17 – JUL ‘18

Response Rate

Bid Rate

Turned Down Rate

Turned Down Rate with Planners were Flexible

93.9%

45.9%

45.0%

39.0%

(0.1%) vs. Prior Year

(+8.8%) vs. Prior Year

(-8.4%) vs. Prior Year

(4.6%) vs. Prior Year

TOP 10 COMPETING MARKETS – RECEIVED RFPS FL - ORLANDO DC - WASHINGTON TN - NASHVILLE TX - DALLAS / FORT WORTH

MARKETS

FL - MIAMI CO - DENVER GA - ATLANTA IL - CHICAGO MA - BOSTON PA - PHILADELPHIA MD - BALTIMORE 0

500

1000

1500

SUM OF RECEIVED RFPS

2000

2500

3000

3500

TOP 10 COMPETING MARKETS – AWARDED RFPS DC - WASHINGTON FL - ORLANDO IL - CHICAGO

MARKETS

TX - DALLAS / FORT WORTH GA - ATLANTA CO - DENVER TN - NASHVILLE FL - MIAMI MA - BOSTON PA - PHILADELPHIA MD - BALTIMORE 0

50

100

150

200

250

SUM OF AWARED RFPS

300

350

400

450

500

UNIQUE RFPS THROUGH CVENT 20…

5342

20…

8545

20…

8391

20…

7102

20…

6433

20…

5367

20…

4433

20…

3574

20…

2664

0

2000

4000

6000

8000

10000

FUTURE RECEIVED RFP PACE VS. STLY 900

Current

800

Previous

700 600

500 400 300 200 100

0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 ARRIVAL MONTH

FUTURE AWARED RFP PACE VS. STLY 350 Current

300

Previous

250 200

150 100 50

0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 ARRIVAL MONTH