Canadian Hotels Enjoy Record Average Daily Rates

The DJIA fell 374 while the Nasdaq was down 257, the S&P 500 fell 60 points, and the 10-year treasury yield was up .04 to 4.24%. Lodging stocks were lower, but the biggest mover was to the upside, with SOHO bouncing back 7%. VCSA traded down to yet another all-time low.

Deutsche Bank updated their models and price targets on some hotel REITs. They were clearly not updating them to the upside. Still, they did highlight Summit Hotel Properties as a stock that has an undemanding valuation and should perform well from a RevPAR perspective in most macroeconomic scenarios. The biggest cut to price target was Ashford Hospitality, with a drop to $9 from $26. They also slashed their target on Braemar Hotels to $12 from $15. DB switched back to an EV/EBITDA methodology for AHT from a per-room-based valuation because DB does not think AHT will be selling a large number of hotels. They also cut price targets on SHO, INN, and DRH, each to $10 from $11; RLJ to $14 from $15; and HT to $8 from $9.

STR’s global bubble chart update through August 12, 2023, shows 88% of markets experiencing growth in RevPAR compared to 2019, slightly lower than the 90% seen during the previous update. Among all countries with a total supply of more than 50,000 rooms, Israel, France, Greece, Singapore, and Croatia led in RevPAR on an actual basis. The countries that recorded occupancy above 80% were the same as the last update, including Greece, Singapore, and the U.K. At the same time, each of the three experienced a decline in the indicator, ranging between 2% and 9%. Notably, Irelandposted a 1% increase from 2019, comparable to 89%, marking the fourth consecutive 28-day period in which the country has recorded an occupancy rate above 80%. Greece, Italy, and Colombia retained the top spot