• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

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


  • BETTER - Demand outlook similar to last quarter's but costs look a little lower resulting in a solid quarter and guidance.



2013/2014 COMMENTARY

  • SAME:  Industry fundamentals will remain solid due to strong group business and low supply growth
  • PREVIOUSLY:  "We believe this positive cycle will gain momentum through the remainder of this year and into 2013, an increase in demand combined with projected low supply growth in our markets of roughly 0.5% in 2013 and 2014, should support a solid and sustained recovery....we are also seeing positive group booking activity extend into 2013, indicating that our group hotels, which lag during the early stages of this recovery, are now benefiting from increased business spending.....We're hearing signs from our operators that the associations are thinking in terms of bigger events, both in days and attendance, as they look out into 2013 and 2014 and beyond." 


  • SLIGHTLY WORSE:  Group bookings for 3Q and 4Q are averaging +9% YoY   
  • PREVIOUSLY:  "Group bookings for the remainder of the year surge by more than 13% compared to the prior year and are now approximately 7.5% ahead of last year's pace for the remaining three quarters and meaningfully positive in every quarter. The average rate for these bookings is up approximately 2% and our recent bookings have exceeded last year's rates by more than 8%. Both trends bode well for the future."


  • SAME:  Rate growth continues to drive HST's transient segment.  As expected, government transient business was weak as demand declined by less than 3%.  The strong increase in group business did result in a slight decline in transient room volume as midweek availability was constrained.
  • PREVIOUSLY:  "Our transient bookings also continue to run well ahead of last year's levels and suggest strong rate growth. The combination of these trends suggests that we should continue to see improvements in occupancy in 2012, which will ultimately drive higher rates and additional mix shift. We are also seeing positive group booking activity extend into 2013, indicating that our group hotels, which lag during the early stages of this recovery, are now benefiting from increased business spending."


  • BETTER:  On a revenue basis, HST is trending at 10% for 2H 2012
  • PREVIOUSLY:  "Overall booking pace for the full year is up actually about 8.5% on a revenue basis for the full year. But that is much stronger for the last three quarters of the year than it was for the first part. So actually if you look at the last three quarters of the year, we are running – on the revenue basis, we're running in the 9.5% to 10% area."


  • SAME:  Expectations for the transaction market have moderated a bit.  HST will remain active and be a net acquirer by the end of 2012.
  • PREVIOUSLY:  "We would expect to be a net buyer this year, but we intend to remain disciplined. If pricing levels move too high, we will look to take advantage by accelerating our sale activities. Given the unpredictability of the timing of these transactions, our guidance does not assume any additional acquisitions or dispositions this year beyond what we have already announced."


  • SAME:  Philly is still the top market. REVPAR was up 23% YoY in 2Q
  • PREVIOUSLY:  "We expect Philadelphia to be a top-performing market in the second quarter due to strong group demand, which should allow us to drive pricing."


  • SAME:  REVPAR rose 11% in 2Q
  • PREVIOUSLY:  "We expect our Chicago hotels to continue to perform very well in the second quarter due to strong group and transient demand."


  • WORSE:  Less transient/group demand drove a negative REVPAR print
  • PREVIOUSLY:  "We expect our Miami and Fort Lauderdale hotels to continue to perform well in the second quarter."


  • WORSE:  RevPAR +4.8% YoY.  Rooms renovations at the NY Marriott Marquis, Sheraton NY, and W Union Square affected performance.
  • PREVIOUSLY:  "We expect our New York hotels to have a good second quarter."


  • SAME:  REVPAR declined 4.6% in 2Q
  • PREVIOUSLY:  Lastly, our worst performing market for the quarter was San Antonio. RevPAR declined 8% due to a slight drop in occupancy and a decrease in ADR of over 7%. City-wide and group demand were weak. We do expect our San Antonio hotels to perform better in the second quarter but to continue to underperform our portfolio.


  • SAME:  REVPAR gained 8.3% YoY in 2Q
  • PREVIOUSLY:  "Atlanta was actually up 4.9%. Very good group, city-wide demand. We actually expect an even better second quarter. We've got really good group and transient pace on the books. And then for the rest of the year it will basically end up about where it was in the first quarter."


  • BETTER:   HST mentioned that the JV continues to exceed their expectations.  Inbound travel to the Eurozone continues to be robust. 
  • PREVIOUSLY:  "Inbound travel to the euro zone from the U.S., U.K., Asia and the Middle East continues to be strong and is a major source of euro lodging demand. The Westin Europa & Regina in Venice, the Sheraton Warsaw, the Sheraton Skyline in London and the Paris Versailles, all had double digit RevPAR increases for the quarter."        


  • SAME:  G&A, Sales/Marketing, Repairs, and Maintenance increased 3.5% in 2Q, primarily driven by variable expenses e.g. credit card commissions, guest reward programs, clustered, and shared service allocations
  • PREVIOUSLY: "We expect unallocated cost to increase more than inflation particularly for rewards in sales and marketing where higher revenues will increase cost. "


  • BETTER:  Q2 property taxes ended up 6.6%
  • PREVIOUSLY:  "We also expect property taxes to increase roughly 8%."


  • BETTER:  utility costs declined 3.5% in Q2
  • PREVIOUSLY:  "Utilities to increase between 1% and 2% for the year."