In preparation for HOT’s Q4 earnings release tomorrow, we’ve put together the pertinent forward looking commentary from HOT’s Q3 earnings release/call and subsequent conferences.



  • “Both business and leisure travel continue to show strength in the quarter.”
  • “Trends in group business remain robust, particularly in-the-quarter, for-the-quarter bookings. In September, for example, bookings for 2010 were up 19%. As we have entered the back half of 2010, 2011 bookings are picking up nicely. Again, looking at September bookings, revenues for 2011 jumped almost 30%, driven by room-night volumes up 22% and rates up 7%.”
  • “2011 group pace has improved by almost 15 points over the last six months, and is now flat.”
  • “We’re also keeping a tight lid on corporate costs. Headcount is flat over 2009 and will remain flat through 2011. So despite adding new hotels, we expect SG&A spend in 2011 to be similar to 2010 levels.”
  • “We expect to see strong pricing power in the industry, particularly in the gateway cities”
  • 2011 commentary:
    • “We expect corporate rates to be up high single-digits”
    • “Group business in 2011 is also trending well, with strong volumes and steadily improving rate, and the overall trajectory of business appears to have stabilized at current levels”
    • “If the current trends continue, we would expect to deliver worldwide RevPAR growth of 7% to 9% in 2011. With our demonstrated ability to control costs, we expect that this RevPAR growth will result in an EBITDA within the range of 950 to 980 million.”
    • RevPAR composition: “Rate two-thirds, occupancy one-third”
    • “Most of our emerging markets will be lapping some hefty growth from 2010, and we will not have events like the World Expo in Shanghai that helped China. As such, it would be reasonable to expect that the rate of growth will slow down sequentially year over year, and the growth delta between emerging and developed markets will narrow."
    • “EPS range of $1.44 to $1.55"
    • “Owned margins to improve 150 to 200 basis points with a focus on revenue management and continued cost control.”
    • “Our vacation ownership business will be flattish, with a continued focus on cash generation.”
    • “Overhead will only grow 1% to 2%”
  • “I feel very comfortable that we will end the year with EBITDA of 840 to 845 million, which is at the high end of our prior guidance range of 815 to 845 million. We expect 2010 global RevPAR growth at company-operated hotels of 8% to 9% in constant dollars, also at the high end of our prior range… This implies a Q4 EBITDA range of 230 to 235 million.”
    • “I want to point out that our year-over-year comparisons are muddied by a variety of factors in Q4. In our vacation ownership business, we had a large gain from securitization last year, as well as the accounting change. In the owned hotel business, we had some asset sales as you know, and some one-time items that helped our Latin American business last year… we had a termination fee last year. In SG&A, we had higher incentive compensation this year. Also we had some items moving between Q3 and Q4 this year, helping Q3 to some extent and reducing Q4.”
    • “We expect global RevPAR growth at company-operated hotels in Q4 of 7% to 9% in constant dollars.”
    • “We still expect to receive a 200 million-plus tax refund before the end of the year. With the refund, we expect our excess cash balance to climb to 500 million by year-end, and our net debt to be under 2.3 billion.”

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