Hotel- And Lodging-Stock Outlook
Zacks Investment Research | Dec 06, 2013 07:46AM ET
The year 2013 is expected to end on a positive note for the hotel & lodging industry based on growing global travel demand and improving lodging performance indicators in most parts of the world. The recent run in the sector was largely supported by better-than-expected improvement in the job market in Oct 2013.
Though the partial U.S. government shutdown in early October had been a dampener, the lodging sector should continue its recovery into next year, underpinned by rising consumer confidence, growing U.S. business and strong international travel and tourism volumes.
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 making every effort to improve their primary performance metrics like occupancy and RevPAR (revenue per available room).
A recent report by Price Waterhouse Coopers shows that the fiscal cliff notwithstanding, the lodging sector will continue to outperform in 2014 and 2015 on the back of robust booking trend and a solid travel and tourism market. The market researcher expects RevPAR growth of 5.5% in 2013 and 5.9% in 2014, driven by increased occupancy rate and higher average daily rate (ADR). As per Price Waterhouse Coopers, 2014 will be the fifth consecutive year of positive RevPAR growth.
Price Waterhouse Coopers also added that high-priced segments will be the major driver of industry growth.
Furthermore, mega sporting events in South America scheduled in 2014 through 2016 will boost tourism. As owners and operators strive to enhance value and competitiveness, industry-best practices, like sustainability and brand refreshment, will remain industry priorities.
How Well Did Leading Hoteliers Do in Q3?
The third quarter of 2013 was quite strong for most of the sector heavyweights – Starwood Hotels and Resorts Worldwide Inc. (Original post
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