In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance.

OVERALL:  BETTER - HOT's results came in above the high of company guidance. The outperformance was driven by better results across all segments of their business: owned, leased, and consolidated JV, fees and higher contribution from Bal Harbour. 

Here is the report card evaluating actual results against management's previous assertions. 

  • FY 2012 OUTLOOK
    • SLIGHTLY BETTER:  HOT raised RevPAR by 1% and lowered some below the EBITDA line items, however, the raise on Adjusted EBITDA and EPS for the year was basically a carry-through of the beat in 1Q
  • SUPPLY OUTLOOK
    • SAME:  Supply continues to be tight and will remain so in the near future.
  • SG&A GROWTH:
    • WORSE:  SG&A growth was taken up by 1% on the low end of HOT’s guidance range.  In the quarter SG&A was up 20% YoY or 11% excluding the $3-4MM of non-recurring items  and a $3-4MM reversal the company guided to in 4Q. 11% is a lot higher than prior guidance of +3-5%.
  • RENOVATION IMPACT:
    • SAME:  About $5MM in the Q
  • EUROPE
    • BETTER:  2Q12 will be better than 1Q12.  Booking windows are returning back to normal.  REVPAR is tracking at +4% in April they expect it to come in at +4% in 2Q
  • CANADA
    • SAME:  Canada remains sluggish as it dragged North America REVPAR by almost 200 bps.  The strong Canadian dollar has had a negative effect on their big box hotels in Toronto.
  • MEXICAN RESORT RECOVERY
    • BETTER:  HOT's earlier optimism played out well in 1Q as their Mexican resorts 1Q REVPAR grew 17% as US travelers returned    
  • CORPORATE RATE NEGOTIATIONS
    • LITTLE WORSE:  Corporate rates are trending up 6%, on the low end of previously given "mid to high single digit" guidance. 
  • GROUP TRENDS
    • SAME:  Group was up 5% in 1Q.  Management had indicated previously that the group pace was going to be in the mid-single digits in 2012.
  • TRANSIENT TRENDS
    • SAME:  "Transient rates continue to climb as momentum remains robust" 

  • REVPAR OUTLOOK BY REGION
    • SAME:  Latin America is still expected to be the strongest RevPAR growth region followed by Asia, NA, Europe and ME&A in last place
  • FX IMPACT
    • SAME:  HOT still expects the dollar will be a headwind to pull down REVPAR by 200bps 
  • NORTH AFRICA AND JAPAN RECOVERY
    • SAME:  HOT saw big jumps in March RevPAR as the region started to lap some easy comps. 
  • VACATION OWNERSHIP TRENDS
    • SAME:  Business remains stable with interval sales and revenues up. HOT reaffirmed its 2012 cash flow target of $125 million
  • BAL HARBOUR:
    • BETTER: Raised EBITDA forecast by $20MM, which mostly reflects $18MM of higher than expected EBITDA in 1Q12.  The company also increased the project’s cash flow expectation by $50MM to $300MM for 2012
  • CASH TAXES
    • SAME:  “Cash taxes in 2012 will be approximately $100 million."
  • CAPEX GUIDANCE:
    • SAME:  “$575 million in 2012, $200 million in maintenance and IT capital, and $375 million in ROI projects.” 
  • COST GROWTH:
    • SAME:  "Holding the line on costs" remains HOT's mottoo