In preparation for HOT's 3Q earnings release Thursday, we’ve put together the recent pertinent forward looking company commentary.
YOUTUBE FROM 2Q CONFERENCE CALL
- China: “We have seen a deceleration, but nothing precipitous. It appears to us that the slower growth has to do with upcoming government transition and excess supply in a few cities.”
- “You should also note that none of our 100 hotel projects has been put on hold”
- “On track to hit net rooms growth in excess of 4%”
- “Asia accounts for 65% of our pipeline, with China representing three-fourths of that.”
- “We've seen an increase in active members outside the U.S. of over 50%. As of today, non- U.S. members account for 44% of the SPG active base and around the world SPG drives over 50% of our occupancy. SPG provides benefits to our guests, but also to our business. SPG Members spend more, give us business in tough times and they're our best brand advocates.”
- “Bal Harbour …. sales momentum and pricing remain good. We now expect the complete sales of all Bal Harbour condos by the first quarter of 2014, if not earlier."
- “Our hotels in North China continue to grow in the double digits. Eastern and Central China are growing in the mid-single digits. The South has been hurt by the slowdown in exports. Selected cities like Tianjin, Guangzhou, Hunan, which have seen a lot of new capacity, have short-term supply/demand imbalances. Tier two and tier three cities, where we have the largest footprint among the major high-end hotel companies, are experiencing double digit growth with very strong F&B momentum... through the first half of the year, our total revenue in China is up over 25% in local currency.”
- “Our opening pace for new hotels is not slowing down. By the end of July, we expect to have opened 15 hotels and the rest of our openings this year remain on track. Year-to-date, we have signed 30 hotels versus 27 at the same time last year.”
- “As we look ahead to Q3, momentum remains good in Asian and Middle Eastern markets, as well as Sub-Saharan Africa. North Africa has tougher comparisons. We anticipate a slowdown in Latin America, driven by the worsening situation in Argentina, where we also benefited from a big soccer event last year.”
- “High occupancies are helping us remix our transient business, raise group rates and we anticipate an even better outcome from 2013 corporate rate negotiations than the rate increases realized this year.”
- “At this point, we have no indications global companies are either restricting or cutting travel and meeting plans. As such, our best estimate is that recent trend lines will continue through the rest of the year."
- "Given the issues in Canada and Argentina, we're lowering our owned-hotel REVPAR growth range at the high-end from 4% to 6% to 4% to 5% in local currencies and only 1% to 2% in dollars. Europe, Canada and Argentina account for over 33% of owned rooms and almost 40% of owned EBITDA.”
- “We remain committed to our asset sale program… We have several conversations underway, some at advanced stages. It is our practice to announce sales only when we close and when we have received the cash. We expect to close on several transactions before the end of the year. Our goal is to sell most of our owned assets over time and we have quite a few transactions in discussion at this point.”
- “What did help us in the second quarter, which won't help us as much in the third quarter, is the comparison in Japan. Japan was up quite a bit because it was lapping the earthquake/tsunami last year at this time that added, probably 100 basis points to REVPAR in Q2. It won't help as much in Q3. We're assuming the situation in China remains roughly where it is. You saw that some other parts of Asia were doing pretty well. So we would say that Asia still is a region that will be at the high-end, if not somewhat higher than our overall 6% to 8% range and that's our best view, at this point.”
- “On group pace, we've continued... our run of strong mid-single digit numbers for the pace in the rest of the year. It's been something that's actually allowed us to remix the corporate transient, or the transient side of the business, where we've seen revenue increases of sort of nearing 10% and, at the same time, we've reduced our opaque and lower-rated discounted business”
- “At this point, we have not put any hedges in for next year."