LODGING: REVPAR REVS UP

RevPAR growth has started to reaccelerate but not because of the economy.  Hotels look more attractive than gaming or leisure.

 

 

While the global markets experienced one of the most volatile months in stock market history, hotel performance—not that of hotel stocks—actually improved throughout the month of August.  Is this because hotels do better in tough and volatile economic times?  Certainly not.  It’s just the sequential math.  We estimate August Upper Upscale REVPAR will come in at $102 or 5.5% YoY growth.  This growth is impressive considering August included a hurricane-battered week and that the 1st half of August averaged a mere 4% growth.   If you look at the chart of 3-week rolling UUP REVPAR YoY change (shown below), REVPAR accelerated in the 2nd half of August, which our math predicted in our note, “IT’S NOT THE ECONOMY STUPID! (8/25/11)”. 

 

LODGING: REVPAR REVS UP - uup

 

So where do we go from here?  According to our model, which tracks sequential, seasonally-adjusted dollar RevPAR, we still expect a sustained pickup in REVPAR growth for the rest of the year—as long as the US economy continues to chug along at a snail’s pace or better but not double dip.  So far so good.  Last week’s RevPAR increased 8.6%. 

 

With the stocks down 40% year to date, a RevPAR reacceleration should help investor sentiment tremendously.  Hotel stocks almost across the board are looking attractive to us.  Of course, we would still need a stable or up stock market for hotel stocks to work.  Although MAR doesn’t have the same ownership leverage to RevPAR growth as the REITs or HOT and H, sentiment around MAR is as low as we’ve seen it.  Moreover, MAR has the least downside relative to its March 2009 trough valuation among the lodgers and some potential positive catalysts such as a very aggressive stock buyback and potentially higher than expected FCF growth.


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more