In three days, Las Vegas Sands Corporation reports fourth-quarter results and, in doing so, will start a month-long marathon of hotel earnings reports.
What specifically will Sands have to say Thursday? I haven’t the slightest. But it’s a safe bet the numbers Sands, and the rest of the industry, report won’t be the kind of numbers that drove investors away from the sector when the Great Recession began.
We saw what could be a sneak preview of the coming earnings season earlier this month when Accor said fourth-quarter revenue for hotels totaled €1.4 billion (US$1.9 billion), up 11.8%.
Smedes Rose, a hotel analyst with Keefe, Bruyette & Woods, pointed to increasing revenue per available room as one reason why fourth-quarter numbers should be positive.
“Companies should be coming in at, or slightly above, consensus,” he said.
Expect also to see a high degree of acquisition activity, especially from the real estate investment trusts, said Michael J. Salinsky, director of REIT equity research, United States apartments, lodging and self storage at RBC Capital Markets.
“The wind is in (hotel companies’) sails,” Salinsky said of the economic climate for hotels.
One potential headwind, Rose cautioned, is in hotels’ ability to push rates effectively. “If demand is not quite as deep as they think it is, there could be push-back on rate,” he said.
Keep up-to-date with the latest hotel earnings action through our “Hotel Earnings Tracker” that records all the numbers as they come in.