Tech Sector Weakness Contributes to Corp. Bookings Price Pressure
Skift Take
- Truist gave their observations on the latest forward-looking booking and pricing trends for US hotels and checks with contacts.
- STR’s global “bubble chart” update through November 19, 2022 showed the strongest performance of the year thus far.
- The U.S. Travel Association’s latest biannual travel forecast shows a downgrade in international inbound travel for the remainder of this year and for 2023.
The DJIA fell 195 points, Nasdaq was up 14, the S&P 500 fell 4 points and the 10 year treasury yield was down .17 to 3.53%. How is that for a weird market? Lodging stocks were mixed. VCSA was down -5% while SLNA traded down to another new low.
Truist gave their observations on the latest forward-looking booking and pricing trends for US hotels and checks with contacts. Truist said they have observed some modest pressure on corporate bookings and pricing power over the past 45 days. They believe the greatest degree of pressure is coming from additional weakness in the tech sector. Group demand and pricing remains relatively solid albeit with bookings very short term in nature. Growth rates for group 2023 will be significantly lower in 2023 but that is because of tough comps. Truist said forward looking domestic leisure RevPAR trends continue to be resilient, almost entirely driven by ADR at this point as new competitive supply from short term rentals and the reopening of international markets combine with favorable FX for American travelers and the return of cruising as a value-priced vacation alternative are putting some pressure on domestic hotel occupancy. Truist pointed out with Christmas and New Year’s on a Sunday versus Saturday last holiday season, some school vacations are being pushed into January. That has the RevPAR growth for the back half of December looking weak while the beginning of January looks strong given the easy y/y comp. Truist said their view on the lodging sector at the moment is one of relative optimism though more so for the global C-Corps and less so for the hotel REITs, a view more favorable than the bear case of relative pessimism. Their favorite name is Hyatt in the C-Corps and Ryman Hospitality for the REITs.
STR’s global “bubble chart” update through November 19, 2022 showed the strongest performance of the year thus far. Egypt, Argentina, Israel, Singapore and the United Arab Emirates were the top five performing countries in RevPAR on an actual basis. Europe saw less representation at the top of the leader board. Egypt benefited from hosting the UN Climate Change Conference COP27 in early November as its RevPAR reached $154. Twelve countries recorded growth in both occupancy and ADR during the 28 day period. While 37 countries grew RevPAR, 8 of the 11 countries still behind their 2019 comparables were in A
