Article Summary: Q2 earnings are muted but do not point fully at a recession; and a “hotel” playlist designed for the Hotel Data Conference.
Q2 earnings are muted but do not point fully at a recession; and a “hotel” playlist designed for the Hotel Data Conference.
Primary Category: Opinions
The latest half-year and second-quarter earnings results are coming in thick and fast, and Hotel News Now is covering the developments with minute precision, as we hope we always do.
Revenue per available room in the U.S. and China has reached paltry levels, but the collective C Suite is not panicking just yet.
That, the industry hopes, is because of the lessons learned in 2008 and those other horrid years, but many new executives have not turned up to their desks without their computer screens emanating a warm glow of double-digit RevPAR numbers.
Some of the news of the past few weeks reflect these muted but not malodorous metrics, and I list some of the hotel firms we’ve covered in alphabetical order, not in order of alarm, or not as the case might be:
- Accor—posted a 30.1% increase to €375 million ($417.3 million) in earnings before interest, taxes, depreciation and amortization and a 2.9% year-on-year rise in global revenue per available room;
- Ashford Hospitality Trust—RevPAR grew 2.8% year over year in Q2 to $140.58;
- Choice Hotels International—Raised full-year guidance for adjusted earnings before interest, taxes, depreciation and amortization by $2 million at the midpoint range;
- Extended Stay America—President and CEO Jonathan Halkyard said he believes any downturn would probably see a 2% to 5% revenue-per-available-room decline instead of the 20% seen in the last recession;
- Host Hotels & Resorts—Revised its RevPAR guidance range for the full year from 0% to 2% to -1% to 0%;
- InterContinental Hotels & Resorts—CEO Keith Barr said the British firm saw muted RevPAR growth in Q2, but more revenue due to its increased supply;
- Marriott International—Comparable systemwide constant dollar RevPAR grew by 1.2% worldwide during Q2, although net income totaled $232 million, a 65% year-over-year decrease.
There are other firms covered in our recent pages, and the results and comments listed above are for each company one piece of the picture and incorporate portfolios that are different from each other geographically and in business model, among other ways.
It is the U.S. and China, the world’s two largest hotel markets, that are wobbling the most due to RevPAR declines or gross domestic product declines.
Newbies and students might do well to find a study of the mistakes of the Great Recession and another one showing what has been learned and what has been put in place to soften the blow dramatically if things get worse.
They might not, of course. Accor and Marriott seem happy, and some of the other firms above have strategies in place that will end in growth, maybe not so much in RevPAR, but in other metrics and goals.
Of the three companies I cover—Accor, IHG and Whitbread PLC—I heard at the earnings conference calls and events no analyst ready to leap off the window ledge.
No need to tear out the hair quite yet.
Off to HDC
This week, the annual Hotel Data Conference, organized by our parent company STR, takes place at the JW Marriott Nashville.
As usual, I am getting there the weekend before and taking a road trip.
I am not sure where yet, but I have a playlist ready, inspired when I randomly chose Mark Lanegan’s LP “Scraps at midnight” to listen to and seeing it has a song on it entitled “Hotel.”
It did not take too long to search my collection, turn the speaker up to 11 (tracks), and voilà …
- “Hotel Yorba”—The White Stripes
- “Chelsea Hotel#2”—Leonard Cohen
- “Hotel Blöedel”—The Fall
- “Memory motel”—The Rolling Stones
- “Fat chance hotel”—Public Image Limited
- “Sitting in my hotel”—The Kinks
- “Motel matches”—Elvis Costello and The Attractions
- “Hotel”—Mark Lanegan
- “Fugitive motel”—Elbow
- “Get a hotel”—The Fall
- “Hot Rod hotel”—Billy Bragg and Wilco
I very much like the fact that the selection from Public Image Limited is on its LP “Happy?,” while Elvis Costello’s is on his LP “Get happy.”
I also make no apologies for having two songs from one band when I have not given all the other bands and artists the same attention.
See you in Nashville.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.
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Headline: Hotel downturn to provide newbies with telling insight
Article Date: 8/12/2019
Article Time: 9:45:00 AM