JP Morgan Is Cautious About Hotel Earnings Season
Skift Take
- Financial Markets: DJIA up 184 points, Nasdaq up 26, S&P 500 rose 18 points, and 10-year treasury yield up to 3.86%. Lodging stocks performed poorly despite overall market gains.
- JP Morgan anticipates unimpressive 2Q23 RevPAR results and mixed net rooms growth in the lodging sector. They remain cautious due to tougher year-over-year comparisons and potential effects from tightening credit conditions.
- Several hotels are being developed or opened, including a 100-room hotel in Northeast Philadelphia, a Marriott Residence Inn in West Vail, and a Fairfield Inn & Suites in Conway, South Carolina. Some projects are facing challenges, like the halted construction of a Homewood Suites in Skokie, Illinois, due to high-interest rates.
The DJIA was up 184 points while Nasdaq was up 26, the S&P 500 rose 18 points, and the 10-year treasury yield was up .02 to 3.86%. Lodging stocks were lower despite the indexes being higher. The biggest mover was to the downside, with SOND falling another -9%. SLNA was up 5%.
JP Morgan said they expect relatively unimpressive 2Q23 RevPAR results and a mixed net rooms growth (and pipelines) performance with a bifurcation between chain scale exposures when results are reported. They expect the full-year 2023 outlooks to be minimal as recent trends have been less than stellar, and the 2H23 (and visibility into 2024) remains uncertain. JPM remains cautious on the lodging sector as they feel the hotel companies face still tougher year-over-year comparisons with more consistent decelerating RevPAR growth and potentially lagging effects from tightening credit conditions since 1Q23. Net-net, they view the upside as less than robust r
