Wells Fargo Expects Hotels Exposed to Group and Leisure to Thrive in 2024
Skift Take
- Wells Fargo predicts a stabilization in interest rates in 2024, benefiting hotel sector growth, with a focus on high-end leisure and Asia Pacific markets.
- Oppenheimer raised the target price for Host Hotels, and Driftwood Capital secured a significant refinancing loan for Hilton Cocoa Beach Oceanfront Hotel.
- There were key personnel changes in various hotel groups, such as Concord Hospitality and Great Wolf Resorts, indicating a focus on business development and wellness.
The DJIA ended Friday up 26 points, Nasdaq was up 14, the S&P 500 was up 9 points and the 10 year treasury yield was up .05 to 4.04%. Lodging stocks were mixed. The biggest movers were to the downside with VCSA down -6% and SOND down -5% on the day.
Wells Fargo said they expect macro uncertainty to ease in 2024 and interest rates to stabilize, something they expect should held new construction/unit growth and asset sales in the hotel sector. They are expecting US RevPAR to grow 3%-4% and prefer operators with exposure to group, high-end leisure and Asia Pacific. They are cautious on those with greater exposure to midscale/economy and mid/low-end leisure. WF said Hilton and Marriott’s premium valuations reflect the high quality business models and scarcity of compelling alternatives. They think Hyatt is the most interesting of the stocks.
Oppenheimer upped th
