A key hotel-industry revenue metric is expected to come in “generally below guidance” in quarterly reports for the lodging sector, according to Barclays, which is seeing soft demand in business travel and geopolitical pressures as denting growth.
Hilton Worldwide (HLT), which releases third-quarter results early Wednesday and Marriott International (MAR), which rolls out results on Nov. 4, will probably guide 2020 revenue per available room growth of flat to up 2%, Barclays analysts Anthony Powell and Felicia Hendrix said.
RevPAR measures daily rooms rates against occupancy, and weaker results are outlooks are already priced into hotel-industry shares, given the “soft weekly and monthly data and modest stock price performance over the past several months,” the analysts said.
“We anticipate a heightened focus on China and Hong Kong during earnings season given geopolitical events and results from IHG and Accor,” they said. Last week, Holiday Inn parent InterContinental Hotels (IHG) said third-quarter RevPAR fell 0.8% while French chain Accor said RevPAR rose 0.7% but Asia-Pacific was down 1.1% “mainly due to the environment in China.”
Pro-democracy protestors have staged months of demonstrations in Hong Kong against what they see as growing bids for control by mainland China. The world’s second-biggest economy has also seen economic growth slow amid a protracted trade dispute between it and the US.
Barclays said it expects Hilton’s earnings before interest, tax, depreciation and amortization to be in line with or “slightly above” consensus while Marriott’s results “could be impacted by declines in incentive fees (particularly from Hong Kong).”
Lodging real-estate investment trusts are expected to report RevPAR growth below consensus as a result of softness in markets including San Francisco, New York, Chicago and San Diego, Barclays said. That projection includes Pebblebrook Hotel Trust (PEB), which releases results on Thursday, as well as Host Hotels & Resorts (HST), Hersha Hospitality Trust (HT) and Chatham Lodging Trust (CLDT), which all report over the next few weeks.
This post was originally published on Health Opinion