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Takeaway: Pre-announced so few surprises but a relief. Positive fwd commentary with the exception of "transient softness" that looks leisure related



  • Equity markets overeacting to lodging space, intend to take advantage of the overreaction by backing additional shares
  • Expected weaker results due to holiday shifts
  • In 3Q Group revenues were flat, 2% rate up, OCC negative 
  • 4.5% increase for transient demand in July and September but August lagged 
  • Arrivals from China still postive, but the average stays appear to be shorter which is a negative 
  • HST returned more than $1 billion of capital to stockholders in 2015 through stock repurchases and dividends, to increase stock repurchase program by an additional $500M
  • Domestic RevPAR led by Boston +5.3% YoY, Los Angeles +9.1% YoY, Seattle +9.8% YoY, and San Francisco +6.2% YoY
  • NY RevPAR +1.3% YoY
  • RevPAR decreased 3.4% at its Washington D.C. hotels due to a decline in convention activity and 9.7% at its Houston properties due to continued weakness in the energy market.
  • Difficult World Cup related comps hurt RevPAR in Brazil, renovations and oil weakness hurt performance at the Calgary Marriott.
  • Intl segment offset by Asia-Pacific market where RevPAR increased 6.2%YoY and 7.7% YoY for the quarter and YTD
  • The European JV comparable hotel RevPAR on a constant euro basis increased approx 9.1% YoY in 3Q
  • Increased 10.2% YoY on constant currency basis
  • 4Q RevPAR growth driven by several of the Company’s west coast properties, as well as Boston, Atlanta, Chicago, and Florida properties
  • F&B +6.5% YoY in 3Q
  • Will be exiting AUS and NZ. Proceeds of sales $104M, expecting to sell additional properties 
  • Currently marketing over $1 billion in assets worldwide.  Volatility in the marketplace seen temporary, and see attactive valuations. Will continue to market properties as long as the valuations are attractive. 
  • Asset sales could present opportunity for special dividends in the future
  • Booking activity in 4Q positive
  • Group demand should be +4%, mostly driven by rate in 4Q 
  • Transient activity moderating thus far in OCT - leisure
  • 1Q 2016 showing some shortfalls due to calendar shifts, but rest of 2016 looking strong and group demand is promising 
  • NY weakness to persist in 4Q and 2016 
  • DC weak as the city could not retain events they had last year over the same period 
  • Houston group business is accelerating sequentially but RevPAR will likely remain negative 
  • Leverage 2.5x-3.5x range but likely to stay at the high end due to the buyback but feel very comfortable at the higher end of the range. 


  • Confident in their ability to dispose assets at multiples richer than their traded equity muiltiple 
  • EBITDA impact on asset dispositions = +$20M in 2015, acquistion of Phoenician will add $6M of EBITDA for 2015
  • Overall there will be less disruption in the comp base in terms of rennovations and CapEx 
  • Also seeing some transient weakness in Q4. Group holding up very well in OCT. Group should be +6% in 2016
  • Intl travel weakness in OCT probably a reason for transient weakness, but very tough to pinpoint
  • Supply constrained in the segments where they operate. Houston, NY, and Miami are going to see strong levels of supply. Hawaii virtually no supply
  • Seeing very strong group demand next year, booking window lengthening. 2017 visibility for group is also strong
  • Fall off from Japanese travel and European outbound travel has lagged due to the strong dollar and has hurt growth in certain markets
  • 50% of asset sales going towards dividend - bullish on their ability to raise the dividend in 2016, or issue a special dividend by the end of 2016. Lots of flexibility with that. 
  • No interest to move into the select service space, becuase it is the only area seeing meaningful supply increase. Longer term it has potential, but not ready to commit capital to that space at present.
  • Implications of M&A among the C-Corps:  limited  
  • Despite selling assets, they don't see the cycle ending any time soon. Asset sales aren't meant to time the market top. 
  • Market stronger for individual assets vs. a portfolio of assets, and this is how they will proceed with asset sales. 
  • Best markets to focus on are still in the U.S., validates their plan to reduce exposure to Asia