The hotel industry’s third quarter earnings season kicks off this week with Marriott International scheduled to release its quarterly report on Thursday.
There was a lot of optimism in the industry three months ago when the industry’s public companies were disclosing third-quarter results. Marriott, like several other companies, predicted 2011 revenue-per-available-room growth in the neighborhood of 6% to 8%. But as we have seen during the past eight weeks, the world is a much different place today.
During this time, I’ve listened to and interviewed many hotel executives who have discussed a range of topics. But inevitably, the same question (or variation thereof) always comes up: “What are your predictions for hotel performance as we end 2011 and move into 2012?”
With the industry preparing to release fourth-quarter reports, now is an appropriate time to share several of the responses to this question I’ve gathered recently.
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Dan Weber, CEO, Value Place
“Seems to me the doom-and-gloom attitude is lifting. … I do think the hotel industry has had some very positive movement (when compared to 2009). People feel better about RevPAR (going forward.)”
Ryan Krauch, principal, Mesa West Capital
“We see a long, slow recovery, and that’s how we’re underwriting.”
Richard Bosworth, managing director, Canyon Capital Realty Advisors
“We’re seeing very solid RevPAR growth. I think you’re going to see a slower growth (for the industry) and more normalized growth of hotel values over the next three years.”
Mike Leven, president and COO, Las Vegas Sands Corporation
Speaking Tuesday about the Las Vegas market at the UBS and Deutsche Bank Gaming Investment Forum at the Global Gaming Expo 2011, Leven said rate in Las Vegas is gradually climbing. “I think we’re positive on Las Vegas. I wouldn’t say buoyant, but it’s better.”
Jim Henderson, GM, Radisson Hotel Rapid City/Mt. Rushmore (South Dakota)
“I really believe 2012 will outperform 2011. We believe we’ll see (at the Radisson Rapid City) 2% growth in RevPAR.”
Michael Salinsky, hotel real-estate investment trust analyst, RBC Capital Markets
“Most companies are expecting a pickup in Q4. We’re expecting RevPAR growth of 4% to 5%, but upper upscale will be better. … There have not been a lot of layoffs yet, which is good.”
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