- Hotel company cuts 2015 growth forecast, seeing weaker demand
- Shares fall 15%; Hilton, Marriott, Host Hotels also decline
La Quinta Holdings Inc. fell the most since going public last year after its longtime chief executive officer resigned and the hotel chain cut its 2015 growth forecast. Other lodging companies also sank.
La Quinta after the market closed Thursday said that weaker-than-expected demand for hotel rooms in the past two months pointed to slower earnings growth this year. The company also said CEO Wayne Goldberg, who’s been with the Irving, Texas-based chain for 15 years and was in the head role since 2006, stepped down. Chief Financial Officer Keith Cline was appointed to fill the role in the interim.
The stock slid 15 percent to close at $16.05, the biggest decline since Blackstone Group LP took the company public in April 2014. The private equity firm remains La Quinta’s biggest shareholder, with about a 27 percent stake, according to data compiled by Bloomberg.
Hilton Worldwide Holdings Inc., a hotel company that also has Blackstone as a top investor, slid 5.7 percent to $23.96. Marriott International Inc. fell 3.4 percent to $69.68. Host Hotels & Resorts Inc., the largest U.S. lodging real estate investment trust, dropped 5.1 percent to $16.53.
La Quinta said 2015 revenue per available room, a performance measure for hotel operators that incorporates rates and occupancies, would grow 3.5 percent to 4.5 percent, lower than the range of 4.5 percent to 5.5 percent in its prior forecast.
“La Quinta has an exceptionally strong and experienced management team in place to continue the company’s robust franchise growth, deliver the outstanding experiences its guests have come to expect and drive shareholder value,” Chairman Mitesh Shah said in Thursday’s statement.
JPMorgan Chase & Co. and Citigroup Inc. analysts cut their ratings on the company after the announcements.