Fitch: What Investors Want to Know: U.S. Lodging

NEW YORK--(BUSINESS WIRE)-- In a new report, Fitch Ratings answers the questions it is most often asked regarding the U.S. Lodging C-Corps and REITs.

Fitch believes that U.S. lodging fundamentals remain healthy given continued, solid U.S. economic growth and measured new lodging supply, notwithstanding choppy and generally weak RevPAR results for the industry as reported by STR Global in late August/early September.

The latest monthly data available from STR Global show August RevPAR increased by only 2.2% year-over-year, which is well below the mid-single-digit pace of growth for most of this year. Comparisons in August and September have been especially challenging due to the timing of the Labor Day and Jewish holidays. The two- and three-year CAGRs in RevPAR growth have generally remained more consistent. Again, the August calendar comparisons are likely weighing down the latest readings. Notably, the three-year RevPAR CAGR in August was slightly better than in June and November.

Some deceleration in RevPAR growth was inevitable, in our view. Indeed, RevPAR was up 8% for the TTM ended July, which is roughly 200 bps to 300 bps stronger than the pace at similar points during the prior two recoveries.

The inclusion of August's weak results dragged year-to-date RevPAR down to 6.7% from 7.4% at the end of July. Our 7% RevPAR forecast for 2015 assumes that fourth quarter (4Q) results to recover some of the 3Q weakness caused by holiday timing this year.

In addition to providing our thoughts on the recent weak industry RevPAR results, topics addressed in the report include:

--What keeps us up at night? (Event risk)

--What does the strong U.S. dollar mean for the U.S. lodging industry?

--Will lower oil prices mitigate the impact from the strong U.S. dollar?

--C-Corps or REITs: who is better positioned at this point in the cycle?

--Do we expect more M&A in the space?

--How serious of a threat is Airbnb to the lodging industry?

--What is Fitch's view on hotel REIT share repurchases?

--How is Fitch analyzing hotel cash flows in U.S. CMBS transactions?

The report, entitled 'What Investors Want to Know: U.S. Lodging' is available at www.fitchratings.com or by clicking the link above.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: Gulf Coast Casino Tour Takeaways

What Investors Want to Know: U.S. Lodging (Growth to Slow, but Remain Solid; Event Risk Rising)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=871367

Related Research

Gulf Coast Casino Tour Takeaways

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=865922

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150922006388/en/

Fitch Ratings
Stephen Boyd, CFA, +1-212 908-9153
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Michael Paladino, CFA, +1-212-908-9113
Managing Director
or
Media Relations
Alyssa Castelli, +1-212-908-0540 (New York)
[email protected]

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Next Crypto To Explode: AI Is Stealing Money From Bitcoin, Could AlphaPepe’s AI-Meme Setup Be the Rotation Retail Misses?
• Global Real Assets Trust Reports Q2 2026 Results
• Aton Closes CAD$4 Million Private Placement