Zacks Industry Outlook Highlights: Starwood Hotels and Resorts Worldwide, Marriott International, Wyndham Worldwide, Choice

  Zacks Industry Outlook Highlights: Starwood Hotels and Resorts Worldwide,
  Marriott International, Wyndham Worldwide, Choice Hotels International and
                                 Hyatt Hotels

PR Newswire

CHICAGO, April 10, 2013

CHICAGO, April 10, 2013 /PRNewswire/ --Today, Zacks Equity Research discusses
the U.S. Hotels & Lodging, including Starwood Hotels and Resorts Worldwide
Inc. (NYSE:HOT), Marriott International Inc. (NYSE:MAR), Wyndham Worldwide
Corp. (NYSE:WYN), Choice Hotels International (NYSE:CHH) and Hyatt Hotels
Corp. (NYSE:H).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

A synopsis of today's Industry Outlook is presented below. The full article
can be read at 

Link: 
http://www.zacks.com/commentary/26697/hotels-amp-lodging-stock-outlook-april-2013

The U.S. hotel & lodging industry wrapped up the year 2012 on a positive note,
with lodging performance indicators witnessing considerable improvement in
most parts of the world. In the fourth quarter, these sector heavyweights
surpassed our earnings expectations: Starwood Hotels and Resorts Worldwide
Inc. (NYSE:HOT), Marriott International Inc. (NYSE:MAR), Wyndham Worldwide
Corp. (NYSE:WYN), Choice Hotels International (NYSE:CHH) and Hyatt Hotels
Corp. (NYSE:H).

Notwithstanding the common macroeconomic hurdles expected ahead, the lodging
sector should continue its recovery this year, underpinned by 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 higher the past couple of years.

Coming to the near-term industry dynamics, hoteliers will likely report
significant RevPAR (revenue per available room) growth in the first quarter
mainly on improved room rates which will be powered by stronger group
business.

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 consequent growth
in the sector.

OPPORTUNITIES

Improving Trends in North America: Owing to gradual economic recovery, the
hotel industry continues to witness an upside. With lower supply in the U.S.,
RevPAR is improving on strong demand and continued higher pricing. System-wide
occupancies in North America appear steady and above the prior peak level in
2006.

On a positive note, Canada also improved sequentially in the fourth quarter of
2012, and hoteliers expect to witness RevPAR growth from their Canadian
businesses in 2013. Starwood expects 2013 to be its strongest year since the
recession, in terms of hotel openings in North America.

The U.S. government has also implemented a new National Travel and Tourism
Strategy, the main objective of which is to attract more than 100 million
international visitors by 2021. The government believes that this will provide
a significant growth stimulus for the local economy. The strategy, if
successful, will reap profits for the U.S. hoteliers.

For 2013, Smith Travel Research predicts occupancy to be virtually flat with a
0.3% increase to 61.4%, ADR to rise 4.6% to $111.01 and RevPAR to grow 4.9% to
$68.17.

Demand Exceeds Supply: Room rates are on the rise in an environment marked by
higher demand and lower supply. 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.

According to Marriott, fewer supplies combined with nearly peak occupancy
levels will help hoteliers charge higher for rooms in 2013. Smith Travel
Research anticipates room rates to reach 2008 levels on a nominal basis, going
forward.

Shift Toward Asset-Light Model: Since late 2010, transition to an "asset
light" business model has gained prominence in hotels and REIT industries.
Asset sales remain a long-term strategy to strengthen financial flexibility,
helping companies grow through management and licensing arrangements instead
of direct ownership of real estate. A higher concentration of management and
franchise fees reduces earnings volatility and provides a more stable growth
profile.

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