Zacks Industry Outlook Highlights: Starwood Hotels and Resorts Worldwide,
Wyndham Worldwide and Marriott International
CHICAGO, Aug. 2, 2013
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).
Industry: Hotels & Lodging
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.
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