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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:  The quarter came in a little weaker in the core business than expected. However, we are impressed by the exceptionally strong balance sheet and what that can mean in terms of returning cash to shareholders over the next few years.


  • IN-LINE:  China REVPAR decelerated in Q4 as consumers were waiting to see if economy would recover. Chinese economy did pick up as soon as the leadership transitioned.  January REVPAR is trending +6%. 
    • "With a leadership change now slated for November 8, we do not expect any improvement in China for the rest of the year. In fact, the trend may get worse before it gets better. Our team on the ground is convinced that China will get back to business after the transition but probably not till early next year. We expect Asia REVPAR growth to be in the middle of our guidance range or lower...  we are optimistic at this point that growth in Asia will pick up as we enter the new year."


  • SLIGHTLY WORSE:  REVPAR only grew 1% in 4Q.  Demand environment continues to be weak. Management does not see much change in 2013.  Given the many challenges in Europe, HOT forecasts REVPAR growth at or below the low-end of +5-7% range.
    • "Europe REVPAR growth will be at the low end of our guidance range."


  • WORSE:  4Q NA revpar came in at 5.2% (low end of guidance and below STR UUP 4Q average of 6.8%), reflecting concern over the election and fiscal cliff.  January REVPAR is up 7%.  HOT sees 6-7% REVPAR growth in 2013.
  • PREVIOUSLY:  "Corporate America is cautious ahead of the elections and fiscal cliff discussions, so it's unlikely that we'll see any up tick in the fourth quarter. On the positive front, Canada is improving sequentially and will have REVPAR growth in Q4."


  • IN-LINE:  HOT sees encouraging signs in Africa.  ME results was led by the gulf area markets; Egypt remains unstable.  HOT expect these trends to continue in 2013.
  • PREVIOUSLY:  "In Africa and the Middle East, Saudi and the Gulf states continue to do well. Across the rest of the Middle East our business reflects what you read in the papers. Things are not improving in Egypt. Except for Algeria, the rest of North Africa remains unstable. Sub-Saharan Africa is doing well with Nigeria and South Africa leading the way. Easy comparisons helped report our results in this region in Q3, comparisons and are more normal as we enter Q4 and we expect REVPAR growth in the middle of our range."


  • BETTER:  Bal Harbour contributed $32 million of EBITDA in Q4.  For 2013,  HOT expects Bal Harbour contribution to total $50 million, higher than previous guidance of $30-40 million.
  • PREVIOUSLY:  "We expect to deliver another $10 million in EBITDA in Q4, bringing the full year total to $135 million.  By year end, we expect to have closed over 70% of the residential units available for sale. Demand for units remain strong and we continue to raise prices. We are on track to achieve our goal of $1 billion from condo sales revenue at sellout."


  • WORSE:  Group and corporate rates are tracking in the mid-single digits in 2013. 
  • PREVIOUSLY:  "We remain of the view that corporate rate negotiations should result at least in the high single-digit increase for 2013. We will describe the group business as steady, but not robust. The large group segment is an area of weakness. We expect that North America REVPAR growth in Q4 will be in the upper half of our 4% to 6% guidance range."


  • IN-LINE:  Capital spend on owned hotels will peak this year and decline as they complete renovations.
  • PREVIOUSLY:  "I think you should assume that next year, we'll be at or slightly above this year was because of some of those things being pushed into next year. And then after that, we should start to see it moderating."