The Strong State of U.S. Hotels
Skift Take
- CBRE released its US Hotels State of the Union March 2023 Edition. Key takeaways include February marked nine consecutive months of easing inflation.
- Baird said that with industry wide March RevPAR being better than expected, it de-risked 1Q23 earnings a bit, and the trade is likely higher into the earnings prints.
- Jefferies said they continue to believe Host Hotels is best-positioned among peers to generate growth and expanding cash flows irrespective of macro challenges and has yet to receive valuation credit.
The DJIA fell 143 points on Friday while Nasdaq was down 43, the S&P 500 fell 9 points and the 10-year treasury yield was up .07 to 3.52%. Lodging stocks were modestly lower. VCSA and SOND both traded down to new all-time lows. AHT was down -5%.
Baird said that with industry wide March RevPAR being better than expected, it de-risked 1Q23 earnings a bit, and the trade is likely higher into the earnings prints as investors continue to price in less bad near-term outlooks. Growth rates are normalizing and Baird expects expense pressures to persist which keeps them selective. Baird said HST and SHO are the two that they believe risk/reward and the 1Q23 setup have become more attractive for.
Jefferies hosted investor meetings with senior management of Host Hotels which they said primarily confirmed their long-term thesis. Jefferies said they continue to believe HST is best-positioned among peer
