The document discusses industry trends, customer sentiment, and demand regeneration related to hotel reopening and recovery during the COVID-19 pandemic. It covers topics such as the current state of the virus and health projections, impacts on the hotel industry like declining RevPAR, stages of recovery, consumer sentiment around travel, and strategies for regenerating demand by appealing to human behavior and needs. The presentation aims to provide an overview of these issues and insights to inform industry participants.

1. Industry Trends,
Customer Sentiment &
Demand Regeneration
Hotel Reopening and Recovery
Milestone Webinar Series
June 23, 2020
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2. Agenda
• Science
• An Efficient Foe
• Industry Stats
• Recovery Optimism
• Sentiment
• Consumers Want to Travel Again
• Demand Regeneration
• Do You Understand Human Behavior?
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 2

3. Science
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 3
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4. Covid-19 is Serious
• Good News
• Transmissibility, severity &
mortality lower than projected
• Masks, social distancing, testing
& tracing work to reduce spread
• Bad News
• Need herd immunity to beat it
• Remove access to hosts
• Successful vaccine
• Convenience v. security…
• Social distancing fatigue
• Desire return to normal
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 4
United States (as of June 21, 2020)
Source: “United States” Worldometer.info June 22, 2020 https://www.worldometers.info/coronavirus/

5. Future US Health Projections
• First Wave
• Peak – March 29
• Plateaus through summer as 1st wave
spreads into new cities & local outbreaks
• Second Wave
• Begins in fall due to school/business
reopening, greater mobility, indoor activity
• In October, cases nearing March level
• Fortunately, death rate half of March level
• Why a 2nd Wave? The Mobility Rate
• February: Base line
• April 5-10: -53%
• September 1-15: -1%
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 5
United States (Forecast to October 2020)
Source: “United States of America” Institute for Health Metrics and Evaluation June 22, 2020 https://covid19.healthdata.org/

6. Industry Stats
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 6
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7. Hotel Industry Dynamics
• Lockdowns Impact RevPAR
• Not directly tied to case rate
• Depends on LOCAL decisions
• US has abandoned lockdowns
• RevPAR Disruption Improving
• Bottom April 11: -84% YoY
• Current June 13: -63% YoY
• Seeing Continual Progress
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 7
Source: “Video: U.S. performance results for week ending June 13” STR https://str.com/data-insights-blog/video-us-performance-results-week-ending-june-13

8. Stages of Recovery
• Projected Sequence:
• Local Leisure
• Domestic Leisure
• Domestic Business
• International
• Group/MICE
• Destination Exceptions
• Beach
• Mountain
• Highway/Rural
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 8
Source: “Webinar Recording: COVID-19 impact on Europe hotel performance - 18 June” STR https://str.com/whitepaper/covid-19-impact-europe-hotel-performance-18-june

9. It’s All About Demand
• Understanding Occupancy %
• Reporting Occ% – Open Hotels
• Economic Occ% – Full Supply
• Advantage to “Smaller Guys”
• Less International Traffic
• Less Dense Destinations
• Less Meeting Space
• Fewer Rooms
• Longer LOS
• Lower ADR
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 9
Source: “Webinar Recording: COVID-19 impact on Europe hotel performance - 18 June” STR https://str.com/whitepaper/covid-19-impact-europe-hotel-performance-18-june

10. Industry Remains Optimistic
• CBRE Forecast
• Demand recovery to pre-Covid-19
levels by 3rd quarter 2022
• ADR lag slows RevPAR to 2023
• Multiplication Refresher
• 100 rooms * -50% = 50 rooms
• 50 rooms * +50% = 25 rooms
• End result = 75 rooms
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 10
Source: “STR, Tourism Economics adjust U.S. hotel forecast downward” Hotel Management May 2020 https://www.hotelmanagement.net/operate/str-tourism-economics-adjust-u-s-hotel-forecast-downward

11. Customer Sentiment
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 11
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12. Consumers Want to Travel
• Travel Ranking Relatively Well
• Intent 2nd to dining out
• Challenging Areas
• International travel lagging
• Good news for US hoteliers
• Major demand generators low
• Amusement parks & concerts
• Additionally – Sporting events
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 12
Source: “When Will Consumers Feel Safe Again?” Morning Consult June 2020 http://morningconsult.com/2020/06/15/tracking-consumer-comfort-with-dining-out-and-other-leisure-activities/?utm_source=morning_brew

13. Safety is Highly Personal
• There is No Silver Bullet
• Priorities Vary Widely by Country / Person
• Top US Protection Methods (>10%)
1. Intense Room Cleaning – 32%
2. Rapid Tests at Check-In – 27%
3. Temperature Check All Guests – 21%
4. More Downtime Between Stays – 19%
5. Fewer Seats in F&B/Public Areas – 18%
6. Free Hand Sanitizer – 18%
7. Issue Free PPE for Guests – 13%
8. Automated Check-in – 13%
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 13
Source: “Hospitality and COVID-19: How long until ‘no vacancy’ for US hotels?” June 2020 McKinsey & Co https://www.mckinsey.com/industries/travel-logistics-and-transport-infrastructure/our-insights/hospitality-and-covid-19-how-long-until-no-vacancy-for-us-hotels

14. Intentions – Next 6 Months
• Domestic Leisure Trips Rebound
• 40% Likely/Extremely Likely to travel (June)
• Net leisure travel sentiment score:
• March 27: +9
• April 11: -7
• May 8: +/- 0
• June 9: +9
• Domestic Business Trips Up Too
• 41% Likely/Extremely Likely to travel (June)
• Net busines travel sentiment score:
• March 27: +7
• April 11: -8
• May 8: -14
• June 9: +1
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 14
Source: “Travel Intentions Pulse Survey” MMGY June 2020 https://www.mmgyintel.com/travel-intentions-pulse-survey-tips-impact-covid-19

15. Demand Regeneration
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 15
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16. Human Behavior
• Maslow’s Need’s Hierarchy
• Must Satisfy Basic Needs First
• Roadmap for Recovery
1. Protect Health
2. Help Them Feel Safe
3. Promote Belonging
4. Enable Guest Control
5. Encourage Creativity
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 16

17. Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 17
Demonstrate Expertise
• Engage Health Experts
• Involve Local Community
• Protect Guests & Staff
• Explain Processes & Protocols
• Clearly Communicate Procedures
• Set Guest Expectations
• Create Opportunities
• Persona-Informed Activities
• On & Off-site Locations

18. Industry Trends,
Customer Sentiment &
Demand Regeneration
Thank you for your attention
Robert Cole
robert@rockcheetah.com
+1.262.309.9560
Milestone - Communicate Correctly Industry Trends, Sentiment & Demand Regeneration Robert Cole  RockCheetah | 18