26 Aug2015

Lodging: 2H15 and 2016 Industry Outlook Remains Positive; Review of 1H15 Results

Key Points

1. Our work continues to point to good mid-single digit RevPAR growth for the Brand Co’s through the 2H15 and into 2016 as industry participants note solid forward booking trends and ability to drive rates.  


2. We expect 3Q RevPAR growth to be modestly lower (50bps) than 2Q, followed by a step up in growth in 4Q, as a result of a push/pull of business from September to October. July and the 1H of August appears to be tracking higher than 2Q growth levels.


3. Feedback on both Group and Corporate remain positive, as many in the industry point to favorable Group pace for the next 18 months, increasing F&B spend per room, and good leverage going into corporate rate negotiations for next year.


We recently attended an industry conference and met with a variety of industry professionals. Feedback points to the positive trends seen in the 1H of the year continuing into the 2H and 2016. In this report, we a.) include feedback from a recent industry conference, b.) provide a recap of 2Q and updated 2015 outlook and estimates for RevPAR, room growth, and fee growth for the Brands, c.) run through the math of the current lodging cycle vs. prior cycles, and d.) include forward commentary/guidance from the Brand’s and REIT’s most recent earnings calls. Overall, we view the Lodging stocks and sector positively heading into the 2H of this year.



Vince Ciepiel, CFA                            Henry Gerlach, CPA       

(216) 649-7253                                   (216) 649-7206




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