Brisbane Market Analysis 2004

1
Global Hospitality Consulting
Brisbane Hotel Performance

We can't solve problems by using the same kind of thinking we used when we created them (Albert Einstein) If we keep doing what we're doing, we're going to keep getting what we're getting (Stephen R. Covey) Opportunity is missed by most people because it is dressed in overalls and looks like work (Thomas Edison)
Rutger Smits
Director, HVS International Sydney 9 September 2004
HVS International Sydney Brisbane Market Outlook 2004
Objectives of the Presentation

Provide an understanding of market dynamics
Assist in decision making processes (budgets, contracting) Generic only, you have to do your own homework!
Performance review and cycle analysis

Review historic performance in key cities (Inner) Review historic performance in Brisbane (TR and Inner) Analyse the impact of supply and demand on occ% and rate 3-year performance outlook
Mathematics class
Review weekday occupancy profiles Analyse the impact of rate on gross profit
Discussion of Yield Strategies

Room Occupancy Trend Key Cities (Mar 1987 Mar 2004)

90.0% 85.0% 80.0% 75.0% 70.0% 65.0% 60.0% 55.0% 50.0% 45.0%
HVS International Sydney
M ar -8 7 M ar -8 8 M ar -8 9 M ar -9 0 M ar -9 1 M ar -9 2 M ar -9 3 M ar -9 4 M ar -9 5 M ar -9 6 M ar -9 7 M ar -9 8 M ar -9 9 M ar -0 0 M ar -0 1 M ar -0 2 M ar -0 3 M ar -0 4
Sydney Melbourne Brisbane Perth Adelaide
Brisbane Market Outlook 2004
Average Room Rate Trend Key Cities (Mar 1987 Mar 2004)
$250.00 $225.00
$200.00
$175.00
$150.00
$125.00
$100.00
$75.00
$50.00
9 7 8 0 1 2 3 4 5 6 7 8 9 0 1 2 3 M ar -8 M ar -8 M ar -8 M ar -0 M ar -9 M ar -9 M ar -9 M ar -9 M ar -9 M ar -9 M ar -9 M ar -9 M ar -9 M ar -9 M ar -0 M ar -0 M ar -0 M ar -0 4
Sydney
Melbourne
Brisbane
Perth
Adelaide
Adjusted Average Rate Trend Key Cities (Mar 1987 Mar 2004)
$300.00 $275.00 $250.00 $225.00 $200.00 $175.00 $150.00 $125.00 $100.00 $75.00
M ar -8
M ar -8
M ar -8
M ar -9
M ar -9
M ar -9
M ar -9
M ar -9
M ar -9
M ar -9
M ar -9
M ar -9
M ar -9
M ar -0
M ar -0
M ar -0
M ar -0
Sydney
Melbourne
Brisbane
Perth
Adelaide
M ar -0
RevPAR Trend Key Cities (Mar 1987 Mar 2004)

$175.00
$150.00
$125.00
$100.00
$75.00
$50.00
$25.00
M ar -9
M ar -0
M ar -9
M ar -0
M ar -0
M ar -9
M ar -9
M ar -8
M ar -8
Sydney
M ar -8
M ar -9
Melbourne
M ar -9
M ar -9
M ar -9
M ar -9
Brisbane
M ar -9
Perth
Adelaide
M ar -0
M ar -0
Adjusted RevPAR Trend Key Cities (Mar 1987 Mar 2004)

$250.00 $225.00 $200.00 $175.00 $150.00 $125.00 $100.00 $75.00 $50.00 $25.00
M ar -9
M ar -8
M ar -0
M ar -8
M ar -0
M ar -9
M ar -9
M ar -8
M ar -9
Sydney
Melbourne
Brisbane
M ar -9
M ar -9
Perth
M ar -0
Adelaide
M ar -0
M ar -0
M ar -9
M ar -9
M ar -9
M ar -9
Room Occupancy Key Cities (March 2000 March 2004)

85.0% 80.0%
75.0%
70.0%
65.0%
60.0%
55.0%
50.0%
Sydney
0 Ju n00 Se p00 D ec -0 0 M ar -0 1 Ju n01 Se p01 D ec -0 1 M ar -0 2 Ju n02 Se p02 D ec -0 2 M ar -0 3 Ju n03 Se p03 D ec -0 3 M ar -0 4

Melbourne Brisbane Perth Adelaide
M ar -0
Rolling Room Occupancy Trend Key Cities (March 2000 March 2004)
80.0% 78.0% 76.0% 74.0% 72.0% 70.0% 68.0% 66.0% 64.0% 62.0% 60.0%
0 Ju n00 Se p00 D ec -0 0 M ar -0 1 Ju n01 Se p01 D ec -0 1 M ar -0 2 Ju n02 Se p02 D ec -0 2 M ar -0 3 Ju n03 Se p03 D ec -0 3 M ar -0 4 M ar -0
Sydney
Melbourne
Brisbane
Perth
Adelaide
Average Room Rate Key Cities (March 2000 March 2004)

240.00 220.00
10
200.00
180.00
160.00
140.00
120.00
100.00
80.00
Sydney
Melbourne
Brisbane
Perth
Adelaide
Rolling Average Room Rate Trend Key Cities (March 2000 March 2004)
200.00
11
180.00
160.00
140.00
120.00
100.00
80.00

M ar -0
RevPAR Key Cities (March 2000 March 2004)

170.00
12
150.00
130.00
110.00
90.00
70.00
50.00

M ar -0
Rolling RevPAR Trend Key Cities (March 2000 March 2004)

150.00
13
130.00
110.00
90.00
70.00
50.00
Sydney
Melbourne
Brisbane
Perth
Adelaide
Hotel Rooms Ratio by Classification Brisbane TR (1999 2003)

3,000
14
2,500
2,000
No of Rooms
1,500
1,000
500
0
M ar -9 Ju 9 n9 Se 9 p9 D 9 ec -9 M 9 ar -0 Ju 0 n0 Se 0 p0 D 0 ec -0 M 0 ar -0 Ju 1 n0 Se 1 p0 D 1 ec -0 M 1 ar -0 Ju 2 n0 Se 2 p0 D 2 ec -0 M 2 ar -0 Ju 3 n0 Se 3 p0 D 3 ec -0 3
5 Star
4 Star
3 Star
Serv'd Apts
Room Occupancy by Grade Brisbane TR (1999 2003)

90.0% 85.0% 80.0% 75.0% 70.0% 65.0% 60.0% 55.0% 50.0% 45.0% 40.0%
15
Ju 9 n9 Se 9 p9 D 9 ec -9 M 9 ar -0 Ju 0 nSe 00 p0 D 0 ec -0 M 0 ar -0 Ju 1 nSe 01 p0 D 1 ec -0 M 1 ar -0 Ju 2 nSe 02 p0 D 2 ec -0 M 2 ar -0 Ju 3 n0 Se 3 p0 D 3 ec -0 3

5 Star 4 Star 3 Star Serv'd Apts
ar -9
Room Occupancy Trend by Grade Brisbane TR (1999 2003)

85.0% 80.0% 75.0% 70.0% 65.0% 60.0% 55.0% 50.0% 45.0%
ec -9 9 M ar -0 0 Ju n0 Se 0 p00 D ec -0 0 M ar -0 1 Ju n0 Se 1 p01 D ec -0 1 M ar -0 2 Ju n0 Se 2 p02 D ec -0 2 M ar -0 3 Ju n0 Se 3 p03 D ec -0 3
16
5 Star
4 Star
Serv.Apt.
3 Star
Average Room Rate by Grade Brisbane TR (1999 2003)

$175
Adjusted for GST and Inflation
17
$150
$125
$100
$75
$50
Ju 9 n9 Se 9 p9 D 9 ec -9 M 9 ar -0 Ju 0 n0 Se 0 p0 D 0 ec -0 M 0 ar -0 Ju 1 n0 Se 1 p0 D 1 ec -0 M 1 ar -0 Ju 2 n0 Se 2 p0 D 2 ec -0 M 2 ar -0 Ju 3 n0 Se 3 p0 D 3 ec -0 3 ar -9 M
5 Star
4 Star
Serv.Apt.
3 Star
Average Room Rate Trend by Grade Brisbane TR (1999 2003)

$175
18
$150
$125
$100
$75
$50
5 Star
4 Star
Serv.Apt.
3 Star
RevPAR by Grade Brisbane TR (1999 2003)

$130
Adjusted for GSt and Inflation
19
$105
$80
$55
$30
Ju 9 n9 Se 9 p9 D 9 ec -9 M 9 ar -0 Ju 0 n0 Se 0 p0 D 0 ec -0 M 0 ar -0 Ju 1 n0 Se 1 p0 D 1 ec -0 M 1 ar -0 Ju 2 n0 Se 2 p0 D 2 ec -0 M 2 ar -0 Ju 3 n0 Se 3 p0 D 3 ec -0 3
5 Star 4 Star Serv.Apt. 3 Star
ar -9
RevPAR Trend by Grade Brisbane TR (1999 2003)

$150
20
$125
$100
$75
$50
$25

5 Star 4 Star Serv.Apt. 3 Star
Supply & Demand Trends by Quarter (March 1984 March 2004)

85.0% 700,000
21
Supply CAG 84-04 = 4.4%

80.0% 600,000
75.0%
500,000
Occupancy
70.0%
400,000
65.0%
300,000
60.0%
200,000
55.0%
100,000
50.0%
M ar -8 M 4 ar -8 M 5 ar -8 M 6 ar -8 M 7 ar -8 M 8 ar -8 M 9 ar -9 M 0 ar -9 M 1 ar -9 M 2 ar -9 M 3 ar -9 M 4 ar -9 M 5 ar -9 M 6 ar -9 M 7 ar -9 M 8 ar -9 M 9 ar -0 M 0 ar -0 M 1 ar -0 M 2 ar -0 M 3 ar -0 4
Supply
Demand
Supply Trend
Demand Trend
No of Rooms
Demand CAG 84-04 = 5.7%
Occupancy Trend by Quarter (March 1984 March 2004)

90.0% 700,000 85.0% 600,000
22
80.0% 500,000 75.0% Occupancy 400,000 70.0% 300,000 65.0% 200,000 60.0% 100,000 No of Rooms
55.0%
50.0%
-8 M 4 ar -8 M 5 ar -8 M 6 ar -8 M 7 ar -8 M 8 ar -8 M 9 ar -9 M 0 ar -9 M 1 ar -9 M 2 ar -9 M 3 ar -9 M 4 ar -9 M 5 ar -9 M 6 ar -9 M 7 ar -9 M 8 ar -9 M 9 ar -0 M 0 ar -0 M 1 ar -0 M 2 ar -0 M 3 ar -0 4 M ar
Supply
Demand
Occ %
Adjusted Rate Trend by Quarter (March 1984 March 2004)

90.0% $200.00 85.0% $180.00
23
80.0%
$160.00
75.0% Occupancy
$140.00 Rate
70.0%
$120.00
65.0%
$100.00
60.0%
$80.00
55.0%
$60.00
50.0%
$40.00
Rate
Adj Rate
Occ% Trend
Occupancy & Rate Trend Correlation (March 1984 March 2004)

90.0% $200.00 85.0%
24
1984-89 Supply growth
1995-2000 Supply growth
$180.00
80.0%
$160.00
75.0% Occupancy
3 years
$140.00 Rate
70.0%
$120.00
65.0%
$100.00
60.0%
$80.00
55.0%
5 years 3 years
$60.00
50.0%
$40.00
-8 M 4 ar -8 M 5 ar -8 M 6 ar -8 M 7 ar -8 M 8 ar -8 M 9 ar -9 M 0 ar -9 M 1 ar -9 M 2 ar -9 M 3 ar -9 M 4 ar -9 M 5 ar -9 M 6 ar -9 M 7 ar -9 M 8 ar -9 M 9 ar -0 M 0 ar -0 M 1 ar -0 M 2 ar -0 M 3 ar -0 4
M ar
Occ% Trend
Adj. Rate Trend
The RevPAR Cycle (March 1984 March 2004)

90.0% $200.00 85.0% $180.00
25
80.0%
$160.00
75.0% Occupancy
$140.00
70.0%
Downturn, supply stop Rate Recovery, new development $120.00 Impact of new supply
$100.00
65.0%
Occupancy recovery
60.0%
RevPAR Recovery
Market collapses
$80.00
55.0%
$60.00
50.0%
$40.00
Occ% Trend
Rate Trend
RevPAR Trend
Rate
Brisbane - Seasonality Analysis (March 1984 March 2004)

100.0% 95.0% $240.00 90.0% 85.0% 80.0% 75.0% 70.0% 65.0% 60.0% $140.00 55.0% 50.0%
26
$260.00
$220.00
Occupancy
$200.00
$180.00
$160.00
$120.00
Occ %

100.0% 95.0% $160.00 90.0% 85.0% 80.0% 75.0% 70.0% 65.0% 60.0% $60.00 55.0% 50.0%
27
$180.00
$140.00
Occupancy
$120.00 Rate $100.00 $80.00 $40.00
Occ %
Adj. Rate

100.0% 95.0% $160.00 90.0% 85.0% 80.0% 75.0% 70.0% 65.0% 60.0% $60.00 55.0% 50.0%
28
$180.00
$140.00
Occupancy
$120.00 Rate
$100.00
$80.00
$40.00
Occ %
Adj. Rate
Adj RevPAR
Brisbane (TR) - Demand Analysis Visitors Nights Domestic visitor nights in 2003: 16.6 million
2001: 15.9 million 2002: 16.1 million 21% stay in hotels 3.45 million hotel room nights in 2003
29
International visitor nights in 2003: 8.4 million

2001: 8.1 million 2002: 8.2 million 13.6% stay in hotels 1.14 million hotel room nights in 2003
Total of 4.59 million hotel room nights in 2003

18% of total visitor nights 75% domestic 25% international
Brisbane - Domestic Visitor Nights (1989 2003)

20,000 18,000
30
89-03 = 0.8% 89-93 = -7.8% 94-99 = 8.3% 00-03 = 1.8%
16,000
14,000
Nights (000s)
12,000
10,000
8,000
6,000
4,000
2,000
19 89
19 90
19 91
19 92
19 93
19 94
19 95
19 96
19 97
19 98
19 99
20 00
20 01
20 02
Nights Elsewhere
Nights in Hotels
20 03
Brisbane (TR) - Demand Analysis International Visitors International visitors in 2003: 750,000 International visitors nights in 2003: 8.4 million Average length of stay about 11 days Only about 13.7% staying in a hotel Top producers:
UK most room nights (18%), but only 11% stay in hotels NZ most hotel room nights, 16% of total room nights
31
USA 3rd largest producer of hotel room nights, Other Europe 4th, Japan 5th China only 2.6% of total nights, but 5.7% of hotel nights, because 83% uses hotels USA stay longest (4.5 days) Chinese only stay 2.2 days
Brisbane - International Visitor Nights (1989 2003)

10,000
32
89-03 = 4.0% 89-93 = 3.8% 94-99 = 7.9% 00-03 = 6.3%
9,000
8,000
7,000
Nights (000s)
6,000
5,000
4,000
3,000
2,000
1,000
19 89 19 90 19 91 19 92 19 93 19 96 19 95 19 94 19 97 19 98 19 99 20 00 20 01 20 02 20 03
Nights Elsewhere
Nights in Hotels
33
Looking Forward.. New Supply Demand Growth Occupancy Projections Rate Predictions
Additions to Hotel Supply (2004 2007)

Saville Pac. Int. 250 rooms & apartments 190 rooms & suites ? ? ? Q3 2005 Q1 2007
34
Brisbane Airport Hotel Cruise Ship Terminal Planning will take two years Construction will take 2 years Supply growth is predictable Supply growth is limited
Brisbane - Supply Forecast (1983 2007)

2,700,000 2,400,000 2,100,000
35
CAG 83-03 = 4.4% CAG 04-07 = 1.5% CAG 83-07 = 3.8%
1,800,000 Roomnights 1,500,000 1,200,000 900,000 600,000 300,000 0

19 8 3 98 4 98 5 9 86 987 988 98 9 99 0 9 91 9 92 993 99 4 99 5 99 6 9 97 998 999 00 0 00 1 0 02 003 004 00 5 00 6 00 7 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2
Demand
Supply
Supply Trend
Demand Trend
Brisbane - Domestic Visitor Nights (1989 2007)

20,000
36
89-03 = 0.8% 89-93 = -7.8% 94-99 = 8.3% 00-03=1.8%
04-07 = 2.5%
18,000
16,000
14,000
Nights (000s)
12,000
10,000
8,000
Hotel room nights increasing at constant ratio of 24% of total
6,000
4,000
2,000
19 96 19 89 19 92 19 91 19 90 19 93 19 94 19 95 19 98 19 97 19 99 20 00 20 01 20 02 20 03 20 05 20 06 20 04 20 07
Nights Elsewhere
Nights in Hotels
Brisbane - International Visitor Nights (1989 2007)

10,000
37
89-03 = 4.0% 89-93 = 3.8% 94-99 = 7.9% 00-03=6.3%
04-07 = 4.5%
9,000
8,000
7,000
Nights (000s)
6,000
5,000
4,000
Hotel room nights increasing at constant ratio of 14% of total
3,000
2,000
1,000
19 89 19 92 19 95 19 91 19 94 19 97 19 98 19 93 20 00 19 90 20 03 20 01 19 96 20 06 19 99 20 02 20 04 20 07 20 05
Nights Elsewhere
Nights in Hotels
Brisbane - Demand Forecast (1983 2007)

2,700,000 2,400,000 2,100,000
38
CAG 83-03 = 5.7% CAG 04-07 = 3.5% CAG 83-07 = 5.4%
1,800,000 Roomnights 1,500,000 1,200,000 900,000 600,000 300,000 0

03 00 02 04 05 95 97 99 93 94 90 92 85 87 89 83 84 86 88 91 96 98 01 20 20 20 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 06 07
Demand
Supply
Brisbane - Occupancy Forecast (1983 2007)

2,700,000 2,400,000 2,100,000 1,800,000 Roomnights 1,500,000 1,200,000 900,000 600,000 300,000 0
03 00 01 02 04 05 94 92 95 97 90 87 91 88 89 84 83 85 86 93 96 98 99 20 20 20 20 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 06 07
39
85.0% 80.0% 75.0% 70.0% 65.0% 60.0% 55.0% 50.0% 45.0% 40.0% Occupancy
Demand
Supply
Occ% Trend
Brisbane - Average Rate Projection (1983 2007)

85.0% 80.0% $175.00 75.0% 70.0% Roomnights 65.0% $125.00 60.0% 55.0% 50.0% $75.00 45.0% 40.0%
97 99 02 94 04 96 86 91 93 98 01 03 05 06 88 83 85 89 84 87 90 92 95 00 20 19 20 20 20 20 20 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 07
40
$200.00
$150.00
$100.00
$50.00
Rate
Adj. Rate
Occ%
Rate
41
A Few Calculations
Occupancy patterns
Weekday (Tuesday Thursday) Extended Weekend (Friday Monday)
From gross rate to gross profit The importance of rate growth

42
Occupancy Profiles
Weekday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Average
A 70.0% 74.2% 74.2% 74.2% 65.0% 72.5% 60.0% 70.0%
B 75.0% 80.8% 80.8% 80.8% 70.0% 75.0% 62.5% 75.0%
C 80.0% 87.5% 87.5% 87.5% 75.0% 77.5% 65.0% 80.0%
D 85.0% 94.2% 94.2% 94.2% 80.0% 80.0% 67.5% 85.0%
From Rate to Profit Typical Average Rate

Gross Rate GST 10% S&BC 6.5% Comm. 10% Freq Fl. 5.5% Cr.card 2.5% Amenities $ 15 $160 $ 145 $ 135 $ 119 $ 110 $ 106 $ 91 $ 91 Wages 15% Other cost $ 10 A&G 4.5% S&M 5.5% Maint. 3% Energy 2.5% MGFE 2% $ $ $ $ $ $ $ 24 10 7 9 5 4 3
43
NET RATE
Expenses
$ 62
Gross Profit $ 29 (20%)

The Impact of Rate Growth Typical Rate

10% Rate Increase Gross Rate GST 10% Direct costs NET RATE Expenses Gross Profit $ $ $ $ $ $ 160 145 54 91 62 29 Gross Rate GST 10% Direct costs NET RATE Expenses Gross Profit $ $ $ $ $ $ 176 160 58 102 62 40
44
Profit Margin
20%
Profit Margin
25%
A 10% rate increase results in a 38% profit increase

From Rate to Profit Group Rate

Gross Rate $ 160 GST 10% $ 145 Res. Fee 3% $ 140 Comm. 10% $ 124 Freq Fl. n/a $ 124 Cr.card n/a $ 124 Amenities $ 15 $ 109 $ 109 Wages 15% Other cost $ 10 A&G 4.5% S&M 5.5% Maint. 3% Energy 2.5% MGFE 2% $ $ $ $ $ $ $ 24 10 7 9 5 4 3
45
NET RATE
Expenses
$ 62
Gross Profit$ 47 (32%)

The Impact of Rate Growth Group Rate

10% Rate Increase Gross Rate $ 176 Gross Rate $ GST 10% $ 160 160 Direct costs $ 38 GST 10% $ 145 NET RATE $ 122 Direct costs $ Expenses $ 62 36 Gross Profit $ 60 NET RATE $ 109 Profit Margin 37% Expenses $ 62 Gross $ A 10% Profit rate increase results in a 28% profit increase 47
46
47
Conclusions Rate and Profitability

The rate cycle and occupancy cycle are not synchronised Anticipated occupancy constraints create opportunities for rate growth Seasonal and weekday patterns can provide further yield opportunities A 10% rate rise may result in a 35% profit improvement, across all segments
Long term yield management requires a pro-active approach !

48
Yield Strategies
Long term yield strategy: should be based on your marketing and business plan
Market supply and demand projections Property positioning strategy Demand penetration analysis
Short term strategy: aimed at maximising RevPAR by making short term decisions
Yield management software Ad-hoc discounts and packages Lose-it rates for short term bookings
Short term strategy should not undermine long term objectives !!!
49
Long Term Yield Management

Yield Management = Revenue Management Invented by airline industry Principles:
Perishable product Supply is known Demand is predictable Loading factor (= occupancy) can be predicted Consumer behaviour can be anticipated Price elasticity can be calculated Inventory can be actively managed
Long term pricing strategy = pro-active Daily yield management = re-active

50
Airlines vs. Hotel Industry

Airline:
Uniform product in three classes (economy, business, first) Large variety of fares for each class (red-e, super saver etc) Limited availability of cheap fares Long term booking = lower fare Active inventory management
Hotel:
Uniform product in different room types Large variety of rates for each room type Low rates always available Long term booking = higher rate Passive inventory management
51
Current Long-Term Strategies

Contracted rates are offered on run of house
free upgrades during high demand periods
High volume contracts get lower rates

is actual production in line with rate offered?
Next years rate based on past performance

Looking backwards, not forwards!
Long term contracts made on todays rates

Is that rate appropriate for the contract period?
Focus on quantity not quality (more is better)

High rate business is more profitable!
52
What can we improve?

Think ahead and be more pro-active
Long term planning vs. short term yield management
Diversify pricing strategy based on lead time

Give long-term bookings lower rates, but limit availability Demand higher rates for short-term bookings, unless the expected occupancy is low and discounts are appropriate
Redefine contracted business

Rate structure by room type, not run of the house Enforce this structure where possible Award volume discount based on actual production, not on predictions or last years production Reward commitment but charge for flexibility
53
Potential problem areas

Perceived fairness is important
Provide arguments to support rate increases Be transparent in rate policies and explain the structure When offering discounts, attach booking restrictions When asking high rates, be more flexible
Do not abuse yield opportunity

Do not insist on high rates when not appropriate Be mindful of the need for repeat business
Good yielding is an art, not a science

Do not leave to inexperienced staff
54
Summary
Market cycles are driven by supply, not demand ! Supply is predictable, as new developments take time Long-term demand can be forecast with reasonable accuracy The rate cycle is lagging the occupancy cycle, due to lack of planning and anticipation The long-term market cycle is predictable ! Use long-term yield management strategies A 10% or $20 rate rise may result in a 30% profit improvement
If you fail to plan, you are planning to fail !

55
Global Hospitality Consulting
HVS International 02 9233 1125 Tel Level 1, 5 Elizabeth Street 02 9233 1147 Fax Sydney NSW 2000 hvssydney@hvsinternational.com
www.hvsinternational.com

Brisbane Market Analysis 2004

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1

Global Hospitality Consulting

Brisbane Hotel Performance

Objectives of the Presentation

Performance review and cycle analysis

Discussion of Yield Strategies

Room Occupancy Trend Key Cities (Mar 1987 Mar 2004)

HVS International Sydney

Brisbane Market Outlook 2004

HVS International Sydney

Brisbane Market Outlook 2004

HVS International Sydney

Brisbane Market Outlook 2004

RevPAR Trend Key Cities (Mar 1987 Mar 2004)

HVS International Sydney

Brisbane Market Outlook 2004

Adjusted RevPAR Trend Key Cities (Mar 1987 Mar 2004)

HVS International Sydney

Brisbane Market Outlook 2004

Room Occupancy Key Cities (March 2000 March 2004)

HVS International Sydney

0 Ju n00 Se p00 D ec -0 0 M ar -0 1 Ju n01 Se p01 D ec -0 1 M ar -0 2 Ju n02 Se p02 D ec -0 2 M ar -0 3 Ju n03 Se p03 D ec -0 3 M ar -0 4

Brisbane Market Outlook 2004

HVS International Sydney

Brisbane Market Outlook 2004

Average Room Rate Key Cities (March 2000 March 2004)

HVS International Sydney

Brisbane Market Outlook 2004

HVS International Sydney

0 Ju n00 Se p00 D ec -0 0 M ar -0 1 Ju n01 Se p01 D ec -0 1 M ar -0 2 Ju n02 Se p02 D ec -0 2 M ar -0 3 Ju n03 Se p03 D ec -0 3 M ar -0 4

Brisbane Market Outlook 2004

RevPAR Key Cities (March 2000 March 2004)

HVS International Sydney

0 Ju n00 Se p00 D ec -0 0 M ar -0 1 Ju n01 Se p01 D ec -0 1 M ar -0 2 Ju n02 Se p02 D ec -0 2 M ar -0 3 Ju n03 Se p03 D ec -0 3 M ar -0 4

Brisbane Market Outlook 2004

Rolling RevPAR Trend Key Cities (March 2000 March 2004)

HVS International Sydney

Brisbane Market Outlook 2004

Hotel Rooms Ratio by Classification Brisbane TR (1999 2003)

HVS International Sydney

Brisbane Market Outlook 2004

Room Occupancy by Grade Brisbane TR (1999 2003)

HVS International Sydney

Ju 9 n9 Se 9 p9 D 9 ec -9 M 9 ar -0 Ju 0 nSe 00 p0 D 0 ec -0 M 0 ar -0 Ju 1 nSe 01 p0 D 1 ec -0 M 1 ar -0 Ju 2 nSe 02 p0 D 2 ec -0 M 2 ar -0 Ju 3 n0 Se 3 p0 D 3 ec -0 3

Brisbane Market Outlook 2004

Room Occupancy Trend by Grade Brisbane TR (1999 2003)

HVS International Sydney

Brisbane Market Outlook 2004

Average Room Rate by Grade Brisbane TR (1999 2003)

HVS International Sydney

Brisbane Market Outlook 2004

Average Room Rate Trend by Grade Brisbane TR (1999 2003)

HVS International Sydney

Brisbane Market Outlook 2004

RevPAR by Grade Brisbane TR (1999 2003)

HVS International Sydney

Brisbane Market Outlook 2004

RevPAR Trend by Grade Brisbane TR (1999 2003)

HVS International Sydney

ec -9 9 M ar -0 0 Ju n0 Se 0 p00 D ec -0 0 M ar -0 1 Ju n0 Se 1 p01 D ec -0 1 M ar -0 2 Ju n0 Se 2 p02 D ec -0 2 M ar -0 3 Ju n0 Se 3 p03 D ec -0 3

Brisbane Market Outlook 2004

Supply & Demand Trends by Quarter (March 1984 March 2004)

Supply CAG 84-04 = 4.4%

HVS International Sydney