| August 30, 2016

Lodging Industry 2Q Results and Outlook for 3Q

Key Points

  1. RevPAR Growth: Following a softer than anticipated 1H, lodging companies reduced their full year outlook and provided a lower bar for the 2H. Initial feedback on 3Q points to July and August both tracking in line to modestly below the updated budgets. September still looks good from a Group standpoint, however confidence in the Transient side is moderating.
  2. Results Summary: In this report we review the 3Q and 2016 outlooks by brand and REIT as well as review the 2Q results. The updated 2016 outlook now points to 2.4% growth (down from prior of 3.7%), which compares to 4.7% growth seen in 2015. 2Q RevPAR for the publicly traded hotel co’s materialized ~100bps lower than expected to average 2.4%, in line with 2.3% growth in 1Q. For hotel co’s that guided (brands and REITs), 3Q is expected to avg 2.0% RevPAR growth vs. 2.7% growth in 2Q (moderation of 70bps). The brands expect similar growth in 3Q as 2Q overall.

Conclusion

We touched based with hotel industry participants to get an update on how 3Q was materializing. Modest growth levels sound to be continuing throughout 3Q. The outlook for 4Q remains mixed as the quarter looks softer from a Group perspective. Feedback surrounding the book direct campaigns continues to point to a bit of share shift in favor of brand.com. In this report, we a.) include anecdotal feedback from lodging participants, b.) provide a recap of publicly traded hotel co’s results, and c.) include forward commentary/guidance from the Brand’s and REIT’s most recent earnings calls.

LINK TO FULL REPORT

Report provided courtesty of Hunter Hotels