Analysts are curbing enthusiasm for hotel companies

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Analysts are becoming more cautious about leisure traveler demand for hotels. Plus other highlights from this week’s news on global hotel deals and developments.

Sean O’Neill

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Analysts are becoming slightly less optimistic

Last week we noticed that Morgan Stanley analysts slightly lowered their price targets on several lodging companies. This week, a number of other analysts at other companies took similar steps, largely out of concern that demand for leisure activities will be weaker than expected.

Barclays said with total revenue per available room (RevPAR), a key industry metric, below their previous growth expectationsThey expect some REITs (real estate investment trusts) to be disproportionately affected. Names that analysts are wary of include: Pebblebrook Hotel Trust And Diamond Rock.

Oppenheimer‘s analysts lowered their price targets on most of the real estate stocks they cover. They cut Chatham Lodging Trust price target from $14 to $12, RLJ Lodging Trust from $15 to $13, Braemar from $6 to $5 and Apple Hospitality from $21 to $19.

JP Morgan lowered estimates for 2024 Wyndham Hotels & Resorts to reflect that Weaker US economy and mid-market chains scale segment results. Wyndham estimated that revenue per available room fell 1% in the quarter to date. Wyndham’s hotels in these segments account for 96% of its domestic US room base and 56% of its global room portfolio.

The steps of the analysts must be kept in view. Barclays remained optimistic Apple Hospitality, which they said was doing better, as its segments (upper-upscale, limited service) are still growing year-over-year. Oppenheimer maintained its Outperform ratings for all of these companies. JP Morgan also continues to rate Wyndham relatively positively.

Our interpretation of these decisions is that analysts believe the hotel sector could be comparatively more resilient than other sectors during macro downturns.

Thailand attracts hotel investment

Thailand is an attractive investment area for hotel groups as the tourism sector recovers from the pandemic. The Association of Thai Travel Agencies predicts that the return of Chinese tourists will help the country meet its goal of reaching 30 million international visitors this year.

Radisson hotel group told the media they will do it Open more premium and luxury hotels In Thailand in the next five years. The Radisson RED Phuket Patong Beach, Radisson Resort Phuket Mai Khao Beach and Radisson Hotel Ploenchit Bangkok are slated to open early next year. In the last 12 months, RHG has added seven new hotels in Thailand with over 1,300 rooms.

Wyndham Hotels & Resorts said they expect to open more than 15 hotels with 5,000 additional rooms in Thailand across multiple brands. Wyndham currently has 22 properties in Thailand.

IHG Hotels & Resorts announced the signing Hotel Indigo Bangkok ThonglorIn a relationship with Recha Estate Co.Ltd. The 250-room property will be located in one of Thailand’s trendiest districts and is set to open in 2026.

India’s ITC could spin off hotels

Yes, we already reported on this in September. Indian The conglomerate ITC could spin off its company ITC Hotels unit.

I.T.C is currently examining the finalization of the long-standing proposal Hotel business spin-off. The Indian tobacco and hospitality group is considering a separate listing following a strong recovery in the industry. For the past 12 months, ITC has opened nearly one hotel each month for its recently launched brands memorabilia And Storii and its existing brands welcome hotel And wealth.

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