CHICAGO, Aug. 2, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Hotels & Lodging, including Starwood Hotels and Resorts Worldwide Inc. (NYSE:HOT-Free Report), Wyndham Worldwide Corp. (NYSE:WYN-Free Report) and Marriott International (NYSE:MAR-Free Report).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Industry: Hotels & Lodging
Link: http://www.zacks.com/commentary/28391/Hotels-&-Lodging-Stock-Outlook---Aug.-2013
The U.S. hotel & lodging industry saw a solid start to 2013, with lodging performance indicators going up in most parts of the world. With concerns still lingering over a number of macro issues that could still leave the sector in disarray, we have now come halfway through 2013 and would like to take a close look at how things are shaping up.
In the second quarter, two of the sector heavyweights --Starwood Hotels and Resorts Worldwide Inc. (NYSE:HOT-Free Report) and Wyndham Worldwide Corp. (NYSE:WYN-Free Report) -- surpassed their respective Zacks Consensus Estimates on earnings. While Wyndham managed to beat on revenues, Starwood missed. Both have raised earnings guidance for the full year.
Notwithstanding the common macroeconomic hurdles expected ahead, the lodging sector would continue its recovery trail this year thanks to improving U.S. business as well as strong international travel and tourism volumes. The number of hotels Starwood opened and new deals signed in North America in 2012 were much more than the past couple of years.
Other important factors like higher barriers to entry and lower reliance on third-party wholesalers have positioned the hoteliers to attain peak levels not seen since the onset of the global economic crisis in 2007. The hoteliers are giving every effort to improve their primary performance metrics like occupancy and RevPAR (revenue per available room).
Market researcher Price Waterhouse Coopers expects RevPAR growth of 5.9% in 2013, representing the fourth year of lodging recovery. According to the market researcher, hotels across the gamut of price tiers, in particular the higher-priced ones, are expected to drive this recovery and a consequent growth in the sector.
Owing to gradual economic recovery, the hotel industry continues to see upside. Starwood has estimated high-end travel spending to have grown nearly 40% over the last four years, almost double as fast as global GPD. The supply situation remains tight both in the U.S. and Europe . PWC forecasts 0.8% supply growth and around 1.8% demand growth in 2013. This scenario is anticipated to push up occupancy levels. Supply growth is expected to remain low for a few years to come.
For 2014, PKF Hospitality Research predicts RevPAR to increase 7.7% buoyed by a 3.3% rise in demand and an occupancy level of 63.8%. As per the research firm, this is going to be the highest annual occupancy level since 1997.
According to Marriott International (NYSE:MAR-Free Report), fewer supplies combined with nearly peak occupancy levels will help hoteliers charge higher for the rooms in 2013. In a nutshell, with lower supply, RevPAR is improving on strong demand and continued higher pricing.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Get the full Report on HOT - FREE
Get the full Report on WYN - FREE
Get the full Report on MAR - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
Share this article