RevPAR on the Rise Boosts Hospitality Sector

In a May 26th Wall Street Journal article by William Spain, he noted that hotel stocks were some of the biggest gainers on the S&P 500 following positive weekly data from the sector.  The article quoted analysts,  “Host should have significant operating leverage as revenue-per-available-room (RevPAR) growth shifts to be driven more by rate than occupancy–a trend we believe could last for years.”

Other selected quotes from the article:

“Shares of Host were up 3.2% while Starwood (HOT) added 2.8%, Marriott (MAR) gained 2.1% and Hyatt (H) gained fractionally. Intercontinental (IHG) was flat. “

“The sector was also getting a lift from news late Wednesday that total U.S. RevPAR rose 11.6% for week ended May 21, according to STR. That bump came from a combination of a 5.1% increase in average daily rates and a 6.2% rise in occupancy. “

“’The U.S.hotel industry reported its strongest weekly performance since early April,’ said Steve Hood, senior vice president at STR, in announcing the results.“

 

Springwood is bullish on the industry because we see this trend continuing for several years.  We continue with our plans to aggressively expand with Hilton and Marriott brands in the Mid-Atlantic region.

Dave Hogg

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