MARKETVIEW Domestic market locked in for the summer Australia Hotels, Q3 2020 $175 *Arrows indicate change from previous year. Chart 1: Short-term Domestic Resident Departures vs. Short-term International Arrivals - Australia $9051.7% Key Points Annual RevPAR declined 33.9% to $90 for the year ending September 2020 National occupancy declined 29.8% to 51.7% for the year ending September 2020 ADR declined 5.9% to $175 for the year ending September 2020 No market registered positive annual RevPAR growth for the year ending September 2020 No new international visitor arrivals were recorded in Q2 2020 as international borders remain closed Domestic overnight trips for the year ending June 2020 reached 92.0 million, declining 19% on 2019. Domestic overnight spend for the year ending June was $63 billion, down 19% on 2019. Hotel sales volume for Q3 2020 was $289 million 92.0 million $63.0 bn PERFORMANCE IMPROVING SINCE Q2 Q3 2020 CBRE Research 2020 CBRE, Inc. | 1 6.2 6.5 6.9 7.4 8.3 8.8 9.2 9.5 8.5 9.1 9.5 9.8 10.4 10.9 11.4 11.6 15 10 5 5 10 15 2012 2013 2014 2015 2016 2017 2018 2019 Visito r nig hts (millio ns) Short-term international arrivals Short-term domestic resident departures Source: ABS; CBRE Research Q3 2020 MARKETVIEW AUSTRALIA HOTELS Source: STR, CBRE Research Q3 2020 National Overview *Rolling annual Sep-20 Q3 2020 CBRE Research 2020 CBRE, Inc. | 2 MARKETVIEW OCCUPANCY AUSTRALIA HOTELS Chart 2: Quarterly Occupancy Change* Chart 4: Rolling Annual Average Daily Rate Change 12 Months to September Chart 3:Rolling Annual Occupancy Change 12 Months to September Q3 2020 CBRE Research 2020 CBRE, Inc. | 3 Note: Quarterly occupancy represents a weighted figure of monthly occupancy Source: STR; CBRE Research Q3 2020 -40% -35% -30% -25% -20% -15% -10% -5% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% September 2019 Occupancy September 2020 Occupancy Annual change (%) - RHS Source: STR; CBRE Research Q3 2020 Source: STR; CBRE Research Q3 2020 -25% -20% -15% -10% -5% 0% 5% $0 $50 $100 $150 $200 $250 September 2019 ADR September 2020 ADR Annual change (%) - RHS Hotel Performance +53% +100% +148% +73% +164% +64% +51% +73% +32% +7% 0% 50% 100% 150% 200% 0% 10% 20% 30% 40% 50% 60% Perth Darwin Cairns Brisbane Gold Coast Adelaide Canberra Hobart Sydney Melbourne Q2 2020 Occupancy Q3 2020 Occupancy Q-o-q Change (%) - RHS MARKETVIEW TRAVEL BUBBLESVISITATION AIRLINE CAPACITY AUSTRALIA HOTELS Chart 6: Domestic visitor nights and historic annual growth Q3 2020 CBRE Research 2020 CBRE, Inc. | 4 Note: Figures expressed as YE June Source: TRA Q2 2020; CBRE Research Table 1: Key Risks and Opportunities to Domestic and International Travel Risks Opportunities Confidence in travel will be strongly linked to the availability of a successful COVID-19 vaccine, of which timing is uncertain Persistent delays in state border reopenings will continue to limit interstate travel Reduced domestic flight capacity could impact accessibility to a number of fly-to markets High implementation costs and increased traveller expenses associated with travel bubbles could limit viability moving forward Local regional operators are expected to capitalise on a captive domestic market particularly as Australia approaches its summer months Australia can leverage its low COVID- 19 infection rate as a competitive advantage to attract short-term international travel Travel bubbles can present a lucrative opportunity for operators if implemented efficiently e.g. allowing quarantine-free travel Ongoing surges in COVID-19 cases in Europe and North America will perturb Australians travelling overseas even as borders gradually open Demand Drivers 7% 8% 6% 5% 2% 4% 3% 8% 9% 7% 0% 2% 4% 6% 8% 10% 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Sydney Melbourne Brisbane Gold Coast Cairns Adelaide Perth Hobart Darwin Canberra Visito r nig hts (00 0s) Jun-19 Jun-20 Annual change (2014-19) - RHS MARKETVIEW SALES ACTIVITY PICKS UP IN Q3 HOTEL LOCATION SALE DATE PRICE (m) KEYS Vibe Hotel Melbourne Melbourne Jul-20 $108 206 The Fantauzzo Art Series Brisbane Sep-20 $67 166 Radisson Hotel Source: CBRE Research Q3 2020 5,238 699 2,257 1,133 525 1,114 311 200 264 373 0% 5% 10% 15% 20% 25% 30% MARKETVIEW Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE. AUSTRALIA HOTELS RESEARCH CONTACTS Liability limited by a scheme approved under Professional Standards Legislation. CBRE OFFICES