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Below is an excerpt from a complimentary research note by our Gaming, Lodging & Leisure analyst Todd Jordan. For more GLL research, check out Gaming, Lodging & Leisure Pro. |
Robust and stable realized demand + elevated but stable bookings + accelerating ADRs (price) = accelerating revenue growth. That’s the formula on tap for the alternative accommodation (AA) industry here in the US looking into the summer ’22.
Indeed, bookings for the summer months (June – August) are pacing up 23% per AirDNA which represents a slight moderation from the most recent months of realized demand (April was +25%). However, per AirDNA and our own data, room rates globally and domestically should be up considerably vs ’19 levels.
Last year summer ADRs were up 10-15% on ’19 levels, and this year they’re pacing up another 8% on top of that, thus yielding ADR gains of high teens to low 20%’s over ’19 levels.
We get the consternation on the consumer and skepticism around leisure travel, but the AA industry in the US could be looking at a 40-50% revenue growth this summer (vs ’19).
As discussed in our OTA deck yesterday, we remain bullish on the AA space and believe EXPE (best idea Long) offers investors the most upside leverage to this trend – current estimates for 2H’22 suggest analysts have not baked in this kind of growth for EXPE’s Vrbo platform.
ABNB should remain the market leader, but in the US, Vrbo is a not-too-distant second per our data.
