Transcript Craig Wright`s presentation

Sick Patient or Post-Mortem?
Diagnosing the Canadian Hotel Investment Industry
What Will It Take To Survive?
Moderator:
Lyle Hall, HLT Advisory Inc.
Panel:
David Larone, Director, PKF Consulting Inc
Betsy MacDonald, Managing Director, HVS
Abid J. Gilani, SVP Treasury, Marriott International
Chuck Henry, President, Hotel Capital Advisers, Inc.
Craig Wright, Senior VP & Chief Economist, RBC Capital Markets - Real Estate Group
Craig Wright
SVP & Chief Economist
3-month TED Spread*
Basis points
400
350
300
250
200
150
100
50
0
2002
2003
*3-month LIBOR rate - 3-month T-bill
Source: Federal Reserve Board
2004
2005
2006
2007
2008
2009
World GDP Growth
% change, year-over-year
Forecast
9
7
5
3
1
-1
73
75
77
79
81
83
85
87
Source: International Monetary Fund, RBC Economics Research
89
91
93
95
97
99
01
03
05
07
09
Canadian and U.S. Real GDP
10
Quarter-over-quarter annualized % change
8
Canada
Forecast
U.S
6
4
2
0
-2
Annual Growth Rates
-4
-6
'07
'08
'09F
’10F
Canada
2.7
0.5
-1.4
2.6
U.S.
2.0
1.1
-2.4
2.2
-8
00
01
02
03
04
05
06
Source: Statistics Canada, Bureau of Economic Analysis, RBC Economics Research
07
08
09
10
Unemployment rate
15
%
Forecast
U.S.
Canada
13
Canada long-term average: 8.7
11
9
7
5
U.S. long-term average: 6.0
3
82
84
86
88
90
92
94
96
Source: Bank of Canada, Bureau of Labor Statistics, RBC Economics Research
98
00
02
04
06
08
10
Federal Government Budgetary Balance
30.0
Billions of dollars
19.9
20.0
14.3
10.0
3.0
13.2
8.0
5.8
6.6
Federal budget projection
13.8
9.6
9.1
1.5
0.0
0.7
-1.1
-10.0
-7.3
-8.7
-13.0
-20.0
-30.0
-40.0
-29.8
-30.0
-33.7
95-96
97-98
99-00
01-02
Source: Department of Finance, , RBC Economics Research
03-04
05-06
07-08
09-10
11-12
13-14
Canadian and U.S. Central Bank
Policy Target Rates
7
%
%
BoC overnight rate
6
Forecast
Fed funds rate
7
6
5
5
4
4
3
3
2
2
1
1
0
0
00
01
02
03
04
05
Source: Bank of Canada, Federal Reserve Board, RBC Economics Research
06
07
08
09
10
Real GDP Growth
% change, ranked by 2009 growth
SASK.
MAN.
2009
N.S.
2010
QUE.
N.B.
P.E.I.
NFLD.
CANADA
B.C.
ONT.
ALTA.
-3
-2
Source: RBC Economics Research
-1
0
1
2
3
4
Recession: Then and Now
(% Change, Peak to Trough)
1980's
1990's
Today
U.S. GDP
-2.7
-1.3
-1.8
Canadian GDP
-4.9
-1.5
-0.8
Housing Starts
-19.2
-18.2
-35.7
Employment
-5.0
-3.5
-1.7
5.7ppts
4.6ppts
1.4ppts
Unemployment rate (diff.)
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